The Wall Street Journal’s Smart Money on line edition featured an article about how to manage the divorce process. It is both short and well written as it captures many of the issues that concern both lawyers and clients but often seem overlooked in terms of actual discussion.
1. It’s costs more than you think.
This discussion addresses the part of the legal profession that offers fixed fee representation. If you have been married just a couple years, have no money and no kids, these quickie services may produce a satisfactory result. But if you have assets of any kind or any kind of dispute about your kids, go meet with someone who claims to specialize in divorce work just to make certain that nothing is left on the table. For example, clients typically assume that they have no right to their spouse’s retirement. That’s not the case.
2. Lots of divorce lawyers get sued.
Perhaps true. There are bad apples in the bunch; both corrupt and merely negligent. But if you sense that you are not getting the representation you deserve, go get a second opinion. There is a high dissatisfaction rate in this business but a lot of that has to do with unrealistic expectations on the part of the client. Today we had a client tell us he would rather give all his money to us than any to his spouse. That client is a ticket to a big fee and equally grand unhappiness when he finds out the system does not work that way.
3. The less you know about your own finances, the more the divorce will cost.
Amen. It is not uncommon to have clients who cannot explain their paystub let alone their 401(k) loan. The level of financial knowledge that exists even among well educated people is pretty frightening. You are paying lawyers to educate themselves about your finances. How does that make sense? Clients also seem to love the idea of hiring “forensic accountants” to ferret out “hidden assets”. This can be a useful enterprise but unless the client knows where to point the accountant, you are telling the dog to hunt without any scent of where to go. That’s an expensive way to look for something.
4. Promises, promises.
The article discuss lawyers who promise more than they can deliver. Our view is even stronger. Anyone who promises you anything in the world of litigation is probably leading you on. Lawyers, at their best provide judgment and experience. Life has no guarantees. The article references someone who paid their lawyer $70,000 and “got nothing to show for it.” That’s a loaded comment. Beauty is in the eye of the beholder. A certain prominent South Carolina trial attorney and former vice-presidential candidate just completed a trial where he probably spent $500,000 to $1,000,000 on his defense. He could say that he got nothing for his money because he was innocent anyway. Well, my friends, he could always have kept his budget thin and defended himself.
5. Get someone with experience.
This is just No. 1 repeated. Buy as much lawyer as you need. If you have a house and a pension you don’t need Clarence Darrow. But if you manage a hedge fund or your home is located over top of a natural gas deposit, don’t believe that any lawyer will do. Ask questions about how these assets get valued and divided in divorce. If you get an unclear answer, it’s time to move on to a better lawyer.
6. Prepare for plummeting income.
In our spend now, save later society, we have seen a sea change in the past five years. Professionals and other well educated folks are finding themselves without work for months or years at a time. Others are taking jobs that pay 30-40% less than before. This is sad but this is also capitalism. You can no longer assume you can make it up later. We were all raised in a world where cost of living and a raise came to be the expected minimum. This is a Brave, New World. Be prepared.
7. Cry elsewhere.
This is sage advice to a point. Lawyers have no psychological training and charge 2-3x what a mental health professional does. But, lawyers also deal with folks going through this process every day and typically will have a feel for where you are in that process emotionally. Psychologists often permit themselves to become pseudo-friends for their patients, a state that is unhealthy at best and destructive at worst. At their low point, they will tell a patient to call their lawyer and tell the lawyer the patient needs more alimony or some other benefit. That’s when the lawyer wants to call the shrink and tell them; look I need a new car and a date with Bridget Bardot. Can you help me? Be wary of lawyers who want to be your psychologist and just as wary of psychologists who think they can give legal advice.
8. Lawyers may be unnecessary.
True. So are car mechanics, accountants and window washers. In the end, we can do almost anything by ourselves. The question is: is that smart? Divorce is a transaction that has deep and permanent effects on your family and your money. If family and money don’t matter to you, perhaps you should save money and do it yourself. But we met with a prospective client this week who put it best: “I’m here because I watched my business partner lowball her legal expenses in her own divorce. We’re breaking up our business but she will continue to pay her ex for years because never got any representation.” Too much lawyer may be a waste. Too little lawyer is a disaster.
9. The inattentive lawyer.
There is one lawyer for every 265 Americans, the highest lawyer to population ratio in the world. If your lawyer has no time for you go meet with that person; express your unhappiness and, if it happens a second time, move on. Just be aware of a couple things when you do. The transition is going to cost you a fair amount of money while the next lawyer learns what the first lawyer was busy forgetting. Second, don’t expect instant lawyer. Any lawyer with a busy practice is fielding 100 or more emails a day in addition to court time, prep time, phone time and, yes, actual meeting with the client time. An unreturned email or call is an oversight, not an insult. But when a pattern emerges or your lawyer starts bullying you, get that second opinion. Don’t ever fire a lawyer until you have a substitute lined up.
10. Foot dragging.
The Smart Money article focuses on lawyers dragging out litigation to earn more fees. It does happen and that’s wrong. But just as common, if not more so, is the new phenomenon we shall call client dragging. We have divorces going on for years in situations where the clients are telling us there is no hurry. We have other clients who come into meeting professing to want things resolved but then devoting no energy to collection and exchanging the data required to make the process work. We will see folks who came into investigate their rights when their kids are in elementary school only to return with the kids now in high school. The reasons are as varied as the client. But a common theme is that people own and owe to lots of different things. When they are asked to compile and digest all of that data, they can become depressed and weary of doing anything. Realize that old data is typically useless data and the longer the case languishes the more expensive it becomes.