The first step to controlling costs is to understand the process and your role in it. A divorce is like a fingerprint. The curve of the lines identifies the pattern as a fingerprint, but every fingerprint is unique. Each divorce, too, has its own unique set of facts, emotional issues, and cast of characters—including the parties, their attorneys, the judge, and perhaps mediators among others.
It is impossible to know in advance how your divorce will play out. Your attorney should offer a blueprint of the process and a frank discussion of the costs. Together you will decide how to proceed and what “frills and options” you can afford.
The cost of a divorce can range from less than $1,000 to more than $1 million, depending on the income of the parties, the value of the assets, the issues in dispute, the area of the country in which the divorce is occurring, the level of hostilities between the parties, what the parties want to accomplish, and how much they are willing to spend.
Every divorce has some predictable costs. These account for necessary expenses during the five stages of the divorce. In the first stage, one lawyer drafts the initial “pleadings” or documents and serves them on the other spouse. Some cases also require an initial hearing, (temporary or pendente lite motions to address support issues, occupancy of the home and other issues which require attention while the case is pending). These hearings can cost several thousand dollars, depending on the amount of information to be presented to the court. Included in this is the expense of preparing several pleadings.
Next is the information-gathering second stage called “discovery.” During this phase, marital and nonmarital (premarital) assets and debts are identified and valued. The discovery phase may involve several pleadings and, sometimes, depositions. Information gathering can be costly, especially if the other side is uncooperative. For example, bank officials may have to be deposed to gain access to records and financial statements the other party refuses to provide.
The third stage of a divorce is settlement and/or alternative dispute resolution such as mediation. Settlement discussions can be time-consuming. Your attorney must assemble the case and then advise and discuss with you your options and rights. The longer it takes for you to understand what is presented and reach a decision, the more costly the divorce will be.
Settlement discussions can occur between attorneys, with or without the parties present. The settlement process can include an exchange of written offers that may be modified by each side until both parties are willing to agree to what is written.
Settlement-focused processes include collaborative law practice and cooperative law practice. The collaborative law practice assumes many different forms, depending on the area of the country in which you live. In some areas, it is a process in which the parties sign a contract to settle the case in the collaborative process. If one or both parties are unable or unwilling to settle in the collaborative process, then the matter is referred to other lawyers who will assume responsibility for litigating the case to conclusion. The original attorneys only work on settlement. The practice is designed to use “neutral experts” who will evaluate custody, businesses, homes, etc., in an effort to keep the cost of divorce lower.
The cooperative law practice is a growing area of practice that is designed to operate in a manner similar to the collaborative law practice–with one major exception. In the cooperative practice if, after neutral evaluations and appraisals have been provided, the parties cannot reach agreement the attorneys remain on the case and proceed to trial. The neutral reports are generally used as joint exhibits to the court to keep the cost of litigation to a minimum. Cooperative attorneys believe that sometimes even reasonable parties cannot reach agreement on things, such as the amount and duration of alimony, child support, division of assets, and other matters. Although they are committed to the settlement process, they also believe that when issues need to be submitted to a judge the parties should not have to do so with new legal counsel.
The similarities between the collaborative and cooperative practice of law are that both practices are settlement-oriented and both seek to keep costs down through use of neutral experts and an informal exchange of information and documents. The difference between the collaborative and cooperative practice of law is that the collaborative practice model is attorney-focused, whereas the cooperative practice is client-focused. In the collaborative practice, the attorneys leave the case if settlement is not reached, irrespective of the wishes of the client. This is because the contractual agreement between the parties and attorneys is that the attorneys and parties would only work to settle the case, not litigate the case.
In the cooperative practice model, the goal is settlement and keeping costs down. However, if the best efforts of all involved do not result in settlement, the clients can then determine whether to go to trial with the attorneys who worked with them on settlement or hire new legal counsel. Most clients elect to continue with their attorneys because the current attorneys know the case, whereas new counsel would need to spend billable time learning the case. The costs of trial are controlled because neutral evaluations and appraisals, which were undertaken as part of the settlement process, can be stipulated into evidence as part of the trial process.
Another settlement process, one that has become very fashionable over the last 15 years, is Alternative Dispute Resolution also known as ADR. Its popularity has grown in part due to the devastating impact of the economy on income and the value of assets. Alternative Dispute Resolution encompasses processes such as mediation, arbitration, parenting coordinators/consultants, etc. In some states, it also involves processes such as Early Neutral Evaluation (ENE) in which qualified attorneys, financial experts and custody professionals work with parties and attorneys to resolve disputes regarding custody, alimony and financial assets. If settlement is not possible, they will offer an opinion as to what a court might do, given the particular facts of the case, i.e., they evaluate the facts as to possible outcomes. The ENE process requires the commitment of the experts to generally work at a rate lower than their hourly private-practice rate. The process, pioneered in Minnesota, gives the financially strapped courts assistance from skilled professionals with the experience and ability to help settle cases.
If the case settles, pleadings embodying the settlement are drafted and signed by the parties and sometimes by the attorneys. The document signed by the parties is a contract between the parties setting forth the terms of the settlement. In some states, including Minnesota, one document called Stipulated Findings of Fact, Conclusions of Law, Order for Judgment and Judgment and Decree is drafted and signed, expediting the drafting and eliminating the possibility of error that is often found when there is a separate marital contract and divorce decree. The final documents are submitted to the Court for entry, often by mailing the document to the Court.
The fourth stage is trial. If a judge must resolve the matter, then a formal trial begins and testimony and evidence are presented to the court. Information discovered about the parties’ assets and liabilities, as well as custody and support issues, must be presented formally to the court, unless both parties submit evidence by agreement, i.e., stipulate it into evidence. Stipulated evidence can include a joint statement of assets and debts, vocational evaluations for alimony, asset appraisals, custody evaluations, etc. In some states, following federal practice, the expert report is considered the witnesses’ direct testimony, subject to cross-examination, re-direct, and re-cross. This requires thorough reports that fully set forth the opinion of the expert.
Trial preparation is time-consuming and expensive. During a trial, attorneys often work 10- to 14-hour days. In a complex case, he or she may have an associate or paralegal assist in court. After trial, there may be verbal or written closing arguments and, if one or both parties are dissatisfied with the judge’s decision, post-trial motions may be necessary.
To help with your case and keep costs under control, consider the following.
- Find a therapist. If you need help coping with emotional issues about the divorce or your grief, talk to your lawyer about finding a therapist. Your lawyer needs to know about your therapy because in some states, a therapist’s records can be subpoenaed and may be relevant in a contested custody or alimony case. Don’t expect your attorney to help you resolve emotional issues. Your lawyer is trained to handle your legal problems.
- Find a support group. If you need to download your feelings about the case and the legal process, investigate a support group. Using your attorney as a sounding board for your feelings will only inflate the cost of your divorce. Support group conversation is not subject to attorney-client privilege but most participants adhere to the notion that what is said in group stays in group. I have never found that involvement in a support group has created any negative impact on a case.
- Stay calm. When you call your attorney to discuss a legal matter, make sure you are calm and collected. The clearer you communicate with your lawyer, the less expensive it will be for him or her to address your needs.
- Make a list. When preparing to speak with your attorney (or send an email), make a list of questions to ask. Be task-oriented. Don’t spend time—which you will be charged for—complaining about your spouse. Discuss your grievances with your therapist or your support group.
- Speak with an assistant. Whenever possible, rather than asking to speak with your lawyer, pose routine questions to his or her support staff or paralegal. You will be charged less for their time, and often they can answer your questions. If a paralegal or associate attorney cannot answer the question, ask for a conference call with your attorney. Make sure the paralegal or associate communicates your question before the call so that your attorney can give a thoughtful, concise response.
- Ask to help. Tell your attorney that you want to contain costs by helping with the case. Ask about collecting information about assets and debts. Remember, if your attorney or his or her support staff must acquire information on your behalf, it will cost you money. Clients can often help collect information about living expenses, documents that will help identify the value of certain assets, such as 401(k) or other retirement accounts, investment accounts, and other assets. This is particularly true given the availability of online account documents. Likewise, many employers make benefit information available online for their employees.
- Inquire about cost-saving processes. Ask your attorney if he or she works with dispute resolution processes such as early neutral evaluations, mediation, parenting coordinators/consultants, etc. Ask if your attorney works with legal processes such as cooperative law or collaborative law. If your attorney does not use settlement-oriented processes, you may want to ask yourself whether this is the right attorney for you.
- Work quickly. When asked to help, gather the requested information or documents promptly and keep everyone informed of your progress.
- Ask before signing. Your attorney should give you a contract or retainer agreement.
- This agreement should outline charges for the lawyer’s time as well as that of an associate attorney, paralegal, or other staffperson. It should cover miscellaneous charges for fax, photocopy, postage, outside vendors, and experts. Read the retainer agreement carefully and ask questions before signing it.
- Billing questions. When you receive a bill, review it carefully and call your attorney’s office administrator with any questions. Do not wait until the end of the case to question the fee.
- Set financial limits. Decide at the beginning of your divorce how much you can afford to spend and set a financial limit. Ask your attorney to be aware of this amount throughout the case. Request a conference if your fee limit appears to be unrealistic. Ask specifically what you can do to keep costs down.
Generally divorce lawyers charge for their services based on time spent on the case. The time required will vary depending on factors of the case, including the:
- Impact of grief,
- Emotional needs of the client,
- Issues of the case,
- Experience and expertise of the attorney,
- County in which the case is filed,
- Judge before whom the case is being litigated,
- The other spouse and his or her state of mind, and
- Opposing counsel.
Grieving the loss of a marriage is similar to grieving the death of a loved one. The grieving process has five distinct stages: denial, anger, bargaining, depression, and acceptance. You and your spouse will grieve the loss of this relationship, but not everyone will experience each grieving stage or the same sequence.
Getting stuck in any one stage (denial, anger, bargaining or depression) can have a significant impact on the cost of your divorce. Anger can significantly increase costs, too. Divorce costs will be more reasonable if at the beginning of the case both spouses are at the acceptance stage of grieving. When a client is not yet at the acceptance stage, the attorney’s job becomes more complicated. He or she must keep the client involved in the process while at the same time doing everything possible to minimize costs. If the other spouse is not yet at the acceptance stage, the attorney must do what he or she can to prod the case along while keeping a lid on fees.
Clients who cope with their grief outside the legal forum and accept the inevitability of the divorce usually have less expensive divorces. Attorneys can present the law and offer options to a client who is able to “hear” what is being said. This client participates in the process, makes the necessary choices, asks appropriate questions, and thus plays a part in resolving the conflict. Such interaction makes the work of the attorney easier and results in lower overall costs to the client. Such a client can be an abundant source of information and insight on many difficult issues, including custody and spousal maintenance, and can provide detailed histories and a perspective on issues that might otherwise not be available.
A client who is devastated by or anxious about the divorce presents a difficult challenge for the attorney. Consoling the client is time-consuming and expensive. A devastated or anxious client often makes daily telephone calls to the lawyer and repeatedly needs to hear the same information, even if it has been provided in writing. This client is unlikely to read and/or comprehend e-mails, letters, or brochures, and thus requires personal contact for every detail of the case.
Over the last 10 years, mediation has blossomed as a means by which spouses can effect a kinder, gentler conclusion to their divorce. Mediation is a process by which a facilitator or mediator will guide the parties to an agreement by stimulating a conversation between the parties that allows the parties to reach a settlement through compromise and negotiation. In most states mediation is protected by confidentiality, i.e. discussions cannot later be used in court against the other spouse.
Some mediators will offer not merely facilitative mediation, but also evaluative mediation. In evaluative mediation, the mediator works to assist the parties in reaching agreement on as many issues as possible. If the parties cannot settle some issues, the evaluative mediator will have the parties and their attorneys, if present, go to separate rooms. The evaluative mediator shuttles back and forth between the two rooms to see if a deal can be brokered. In an effort to stimulate conversation that will get the matter resolved, the mediator will offer opinions and perspectives to each side as to what might occur if the matter goes to trial.
Mediation differs from litigation in that during litigation attorneys guide clients through the process. Because attorneys are advocates for their respective clients, they approach mediation with a built-in bias that a mediator does not have. Although it may seem more expensive to enter into mediation accompanied by your attorney, it may be the wisest course. An experienced attorney may be able to provide the parties and the mediator with additional innovative options or alternatives. However, even when attorneys participate in mediation sessions, the mediator runs the show.
Mediation can be started at any time before entry of a decree. Sometimes parties enter mediation immediately after the divorce is started or just before trial to resolve one or two complex issues. As long as the divorce has not been finalized, it is not too late to consider mediation as a cost-saving option. If undertaken with a competent and experienced mediator, the parties can save a lot of money and emotional damage.
The litigated case
A divorce case involving complex issues relating, for example, to custody or the valuation of a family-owned business requires more time and money than the average case. A litigated custody case is among the most expensive because usually it stems from anger on the part of one or both spouses. Two parents who can accept the inevitability of the divorce are better able to understand the child’s needs.
A custody case that goes to trial with a court-appointed expert could cost more than $50,000. A custody trial with two or more private experts can cost each client more than $100,000. The cost of a custody evaluation alone can be $15,000 to $30,000 or more, depending on the part of the country in which the divorce occurs.
Before embarking on a custody fight, consider what it will cost, whether you are prepared to pay for it, and what your lawyer thinks about your chances of success. If you decide to proceed, be sure that your attorney has the expertise, stamina, and willingness to handle the case within the limits of your budget. Also consider the impact of a custody evaluation on the children. Getting a custody evaluation may be a good use of your financial resources.
Other potentially expensive divorce cases involve closely held corporations or small businesses. In a case involving a business valuation, an attorney is required to examine many documents, books, and records. A forensic accountant may be needed to testify as an expert and assist with the case. Retaining the expert, examining records, and deposing witnesses can add from $10,000 to $100,000 (or more) to the overall cost of the case, depending on the size of the business and the area of the country in which the case will be handled.
Simple and relatively inexpensive-to-resolve issues include valuing pensions, 401(k) plans, and IRAs. Generally, monthly statements show the value of the asset and whether it has been liquidated. The value of a house can be ascertained through its valuation or sale. Simple tax issues can be identified by a forensic accountant and can usually be resolved without a great deal of expense (e.g. value of children as dependency exemptions, cash flow impact of spousal maintenance/alimony payments).
The division of household goods and furnishings can be more complicated, especially when encumbered by emotional attachments. When vehicles, real estate, jewelry, or special collections must be valued or vocational experts are needed to assess future earnings potential, the cost of the case may increase by a few thousand dollars.
Every time you think about taking action on your case, whether through a letter, a motion or trial ask yourself will the value of what you obtain be more or less than what you will pay your attorney to seek it. For example if it costs $50 to write a letter about a bill that your spouse incurred for $30 do you really need your attorney to send the letter, or if it will cost you $5,000 to argue about an asset that is worth between $8-10,000 when you will ultimately be given one-half of the value of the asset is the fight worth the expense. Sometimes it will be but many times it will not.
The other side
Although you control your own behavior and the lawyer you select to represent you, you cannot control your spouse’s behavior or their choice of an attorney. If your spouse is locked into one of the grieving stages or is merely intent on fighting, fees will increase, even though you and your attorney are doing everything you can to keep costs low. Your spouse’s attorney also can contribute to the expense of the divorce through tactics or postures that are not settlement-oriented. Two good attorneys who are committed to getting the case resolved with a minimum of cost will keep fees low and define any issues for trial so that the presentation to the court is clear, concise, and void of any behavior likely to increase fees.
Many clients mistakenly believe that an attorney’s hourly rate indicates how expensive the divorce will be. An attorney’s hourly rate is, however, only one factor in the final fee. An attorney who charges a somewhat higher hourly rate may actually be more efficient and cost-effective than a less experienced lawyer. Likewise, the work product of a more experienced attorney may be more thoughtful and better protect your needs. Expensive attorneys usually work with support staff, including associate attorneys and paralegals, both of whom charge less than the primary attorney.
Clients generally seek an attorney whose professional demeanor best reflects their needs. If you genuinely want your case to be resolved fairly and with minimum expense, choose an attorney who is courteous and capable, not the local junkyard dog or recent graduate who does not take the time to understand family law. Many attorneys think that family law is easy and they do not read the statutes or rules that govern family law. These attorneys may appear less expensive in the short run, but may cost you more in the long term because issues are missed or bills reflect more “learning” time.
The county in which a case is heard can have an impact on divorce costs. For example, some counties require that all cases with a motion scheduled appear at the same time (usually first thing in the morning or afternoon). There may be two cases scheduled for motion hearings or there may be ten cases. The attorneys and their clients then wait until their case is called, a process that can take several hours. While waiting, your lawyer may not be able to work on other matters, despite having a smart phone. You will likely be charged for the total time at the hearing, perhaps including travel time.
Some judges do not have a thorough understanding of family law issues. The complexity of family law issues makes it difficult for judges to acquire the necessary expertise, unless he or she handles such cases routinely over a long period of time. The judge’s expertise will have an impact on his or her ability to understand the issues presented in hearings and at trial. If your lawyer must spend time educating the judge, your fees will increase.
Most courts are experiencing financial cuts that give judges much larger caseloads and less support staff. Judges are struggling to find sufficient time for each case. All judges are overworked, and even the best judges cannot keep up with expanding caseloads. This impacts the outcome and cost of a divorce.
One of the most important facts to remember when looking as the legal fees and costs that you are incurring, regardless of whether you are leaving the relationship or being left, is that your divorce is not a normal time in your life. It is a transitional time, characterized by loss. You have a role in managing and minimizing both the emotional and financial losses. Follow the tips set forth here, breathe deeply, and when the time comes, thank your attorney for a job well done.