I read a piece in the Huffington Post this week written by Jim Halfens of Divorce Hotel, who argued that it was about time that divorce lawyers charged a fixed fee for the legal work they perform, instead of sticking to the "old way" of hourly billing.
It will never happen and for good reason. If Mr. Halfen knew the frailties of the family court system and the opportunities for abuse and delay, he would understand. But let me paint you a picture of regular occurrences in the practice of family law.
A client asks you to draw up a comprehensive separation agreement or prenuptial agreement, which without complications will cost in the range of $3,000. The problem is that often clients will request the agreement, expend the funds, all without having any idea whether their spouse will agree or sign the agreement.
Of course, it is an utter waste of time to present an agreement to your spouse, the terms of which have never been discussed with him or her. My practice is to warn clients that they may be wasting money, if they haven't bothered to determine if their spouse is "on side".
Once the client believes their spouse will cooperate, it is a "go" for the agreement and usually clients want to know exactly how much it will cost and want you to guarantee that fee estimate.
But it can't be done... because every agreement and spouse is different and you can never rely on a client's advice that their situation is straight forward. For example, it is commonplace to ask your client to provide you with a list of all their assets, their estimated values, and also their debts and the amounts owing. You also need the same information from their partner.
Of course, you can't forget to request their recent personal and corporate tax returns, and in the case of companies, the financial statements as well. While the client may imagine their financial situation is simple, usually it is not, particularly where there are more sophisticated assets, like trusts, annuities and off-shore assets. But you don't know any of that until you receive all the documents and my experience is that you never get everything you need or it trickles in over a lengthy period of time.
Lawyers bill for their expertise and the time it takes them to complete a task for their client. In this agreement scenario, it would be foolish to quote a fixed fee for ten hours of time, when it may take you twenty hours, or more. Another difficulty is that once the agreement is complete, your client's partner will take it to her or his lawyer to review and negotiate. That could take two hours or ten hours, because initially you don't often know who your client's spouse will retain. One thing lawyers know is the negotiation styles of their colleagues, some lawyers are known to be reasonable, but others are not.
However, the agreement scenario is a piece of cake compared to the living nightmare if you must enter the family justice system, once negotiation and mediation have failed.(Unless of course, you are smart enough to agree to a private arbitration, but that's another article) If you thought your lawyer was expensive before, this calamity will cost you not only heaps of money but also your emotional and psychological sanity. Where to begin?
After all the negotiations and mediations are at an end, the first thing you'll have to do is attend a mandatory mediation with a judge, who may or may not be capable of facilitating a settlement. But it's not like you haven't already been there, done that. This first step will cost you several thousand dollars and it is not optional in most cases.
Once that has been a complete bust, you enter the nightmare called family law litigation, an experience that frightens even those who are courtroom addicts. The first shock is that you must produce every single piece of paper that has anything to do with the issues in your case, and I mean everything: your kid's report cards, your kid's medical records, all paper that is related to your assets and debts, including statements for long-lost bank accounts, credit card statements for the past five years, business records and financial statements, tax returns, and all the damning emails your spouse has sent to you, but that's just the beginning.
Speaking of emails, most lawyers spend a lot of time reading lengthy email missives from their clients, and also multiple strings of nasty emails between client and his or her spouse, many of which will be producible for court. Hard to predict in advance whether you'll need to read a hundred emails or several thousand. And don't forget your lawyer will regularly scour the internet for damaging posts and pictures.
You'll need to hire appraisers: lots of them, to value your home, your summer cottage, your cars, your boat and trailer, your wine collection, art collection, antique furniture, and your pension. But none of those appraisals will be definitive because your partner will do the same, and if you have a business, you need to set aside $30,000 or more to pay a business valuator. Welcome to the battle of the experts!
Worse than all of that is that when you finally prepare to go to court, you'll get there and sit in a courtroom all day, only to learn that you have to come back another day, because the judge ran out of time. More delay and more costs because all that work your lawyer did to prepare, must be redone to prepare again, after all, your lawyer has dozens of clients and with even a delay of one week will not remember all the details without another review. You finally get a judge and you learn that you won't get a decision for weeks, even months.
Tell me honestly, how do you provide your client with an infallible estimate of what it all will cost? That's right, you don't, because you can't.
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