January 2009 Archives

January 30, 2009

Divorce, Billing, Hourly Charges, and a Favorable Result...

Today's New York Times' front page has a front page article "Billable Hours Giving Ground at Law Firms."  The premise of the story is that the practice of billing by the hour is coming into question.  Not that client's should pay for the hours their lawyer works, but that the practice may encourage lawyers to do unnecessary work, or prolong a client's problem rather than resolving it.

Part of the problem is not that a lawyer is actually billed for his or her time, it's whether the time was actually spent and whether it was a productive use of the time.  Historically, a lawyer was considered productive if he could bill clients for 25 hours a week - an associate without management and business generating responsibilities might bill closer to 35 to 40.  These people were not working normal work weeks, often coming in early, staying late, working on weekends, and skipping lunch - but there are too many interruptions in the typical day to be able to bill all your time, education, business development, and administrative duties.

Things have changed as the law practice has gone from a profession to a business:  Many now view their law licenses as an umbrella for managing "profit centers" from the copy machine through the receptionist, and on to every conceivable expense that used to be factored into the hourly rate.  Somehow, the number of billable hours per week has climbed do to different billing methods.

As Family Law lawyers in California, we are in a unique position to know what our our opponents are charging their clients in our cases - we are usually required to file declarations setting out our hourly rates, amounts billed, and funds paid, any time one party requests that the other contribute to their fees.  This gives us an unusual perspective into the problem.  

Here are some of my observations over the years as the problem has worsened: 

Continue reading "Divorce, Billing, Hourly Charges, and a Favorable Result..." »

January 29, 2009

Your 401K Starbuck's Card, a Latte, and Divorce...

In mid-December, I was minding my own business when I heard a news story that some 401K plans come with debit cards.  The cards allow an employee to borrow against his retirement plan just like using a MasterCard - of course, eventually you must pay the 401K back for the "loan" you are taking, even if it's your money. [I do hate to point this out, but you have to pay back the MasterCard too.]

I was stunned that someone could easily finance a vente latte at Starbuck's by borrowing against his or her retirement account.  What a potential for disaster.

In divorce cases, we often see parties whose only retirement [aside from Social Security some day] is in the form of a 401K plan.  Often, that plan is the only source of funds the parties had when they wanted to make a down payment on a truck, condo in the mountains, or to pay excess credit card debt, and the balance has been reduced by the loan.  They foolishly think their lives [and bad spending habits] will change and they will be able to repay the loan within a reasonable period of time.  Unfortunately, that one latte may be added to the movie tickets, a tank of gas, dinner and a bottle of wine, repeated over and over again, until much of it is gone.

Compounding the problem is the forgotten provision in the plan that may require the loan be repaid, or be treated as a withdrawal.  What happens with a withdrawal?  Taxes, penalties, and loss of retirement resources.

Ask some questions. If your job is eliminated, does the plan require the loan to be repaid within a short period of time?  Does the plan require any loan be repaid within a certain period even if you stay employed?  If you leave the job and want to transfer your 401K to a new employer, you probably can't transfer the loan.  If you get a divorce, for the same reason, the employee-spouse may be stuck with a loan that cannot be transferred to the spouse - will the loan then exceed the allowable loan percentage once the other spouse takes his or her share of the equity in the plan - that could trigger repayment provisions.

And remember, if you can't repay the loan when required to do so, that may trigger penalties plus income tax on the amount of the loan.  If you are in a higher bracket, taxes and penalties may be more than one-half of the amount of the loan.  And you thought you only had to worry about the stock market and Ponzi schemes!

In summary, don't do it except in an absolute emergency.  Use your parking change and order a tall drip, add lots of cream, and forego the latte.  Maybe check out a video from the library instead of going to a movie.  Read a book. Go for a walk. Mend your ways.  Sure, it doesn't stimulate the economy, but your household's economy must fix itself first.


January 28, 2009

Divorce and Health Insurance - the Effect on Woman...

One of the important issues family law lawyers think of in divorce cases is the cost and availability of health insurance for our clients once their marriages end, when their coverage is through their spouse's employer.  With pre-existing problems, lower income, and lack of health insurance, they may be unable to pay for decent medical care, or chose between taking medication and paying the mortage.  

While COBRA rights may allow coverage for a period of time after divorce, eventually even that will lapse.  How to keep insurance longer and what it will cost are things you should discuss with a certified specialist in family law.  If you live in Northern San Diego County, consider calling one of the specialists at www.divorceandmediation.com, with offices in Carlsbad, Escondido and Rancho Santa Fe. [COBRA is an acronym or shorthand for legislation that may provide the right to keep your group policy for a limited period after divorce or termination of employment]

The problem is magnified for woman, who may have pre-existing conditions and higher insurance costs even if they can get coverage.  In my practice, the wife is far more likely to face this issue than the husband.  Options may include buying a policy while you qualify before COBRA expires, seeking employment with benefits, or negotiating a delay in obtaining a divorce so the wife can remain covered longer.

Many insurers justify higher premiums for woman based on studies they are more accident prone, and more likely to break bones or be ill.  Although COBRA may give you the right to coverage for some time, cost may be the first limitation.

In a recent lawsuit filed by the City of San Francisco against the California Insurance Commissioner, the city is seeking to narrow the cost for women.  State legislation allows insurance companies to discriminate between woman and men.  According to the city, the difference can be almost 40%.  State law permits the use of gender to determine rates - the legislature, seemingly allowing different premiums based on the customer's gender, has probably made the lawsuit moot.  If any change is to come, it will probably require a political solution.  This type of case is often designed to bring public attention to a problem, even where the chance of success in court is not high.

Ten states prohibit this discrimination.  This is an issue of social policy:  Should everyone be entitled to coverage at the same cost irrespective of factors such as geography, gender, education?  What about age?  Health?

This is not a situation unique to woman and health insurance.  If you live in a crowded urban county, should you be charged higher car insurance premiums than someone who lives in a remote, rural county?  What if the insurer can show that much higher accident rates occur in urban areas, so the risks are higher?  What is urban drivers are more likely to sue after an accident?  If the premiums are not adjusted geographically, would the rural driver be subsidizing the urban driver?  Is that good public policy, or bad?  Some people believe the only justification for differences in car rates is the individual conduct of the insured - is he a safe driver for example?

Should social policy require uniform car insurance rates, or require they be adjusted based on the risk caused by the individual policy holder?  Is your answer influenced by where you live or your car is garaged?  For health insurance, is your answer different dependent on your gender?

There are no clear cut answers to these questions, but the problems of health insurance may be dealt with on a Federal level, as Congress tries to wrestle with our national medical care and insurance problems.  From my standpoint, divorce would be much less traumatic if there were a uniform system with guaranteed coverage irrespective of prior medical history or age - it would be nice if there were a solution to these problems.  



January 27, 2009

Divorce - things Certified Specialists must know....

Every week, I get a summary of new appellate cases that affect my area of practice:  Family Law, which includes everything from Divorce to Custody to Property Divisions, etc.  The initial blurb is just a snippet so that I can decide whether I want to go look at the appellate court's decision in full.

Today, the report of a decision called In re Corinne W. , from last week, says that the law doesn't require a County Bureau of Children and Family Services to pay for a foster child's car insurance.  I don't even want to think about the legal arguments suggesting otherwise, so I'll pretend I didn't read this - maybe it should go to my Nutz and Screws Blog when I start it.  

I suppose next we'll see a court tell us that the taxpayer doesn't have to pay for iPods for children in foster care.
January 26, 2009

Divorce in San Diego may get ugly....Charge!

A recent blog stated "LaDainian Tomlinson's time with the San Diego Chargers may be growing short, and if things keep going the way they are, it will be an ugly divorce."

So that we don't have to hear about this for the next two years as it winds it's way through the courts, let's hope that both sides hire competent, certified specialists in Family Law.  I'm glad my dad gave up his Charger tickets, so I don't have to watch the consequences every Sunday.
January 25, 2009

More Words about Divorce from Rumpole....

Today, the AP had an obituary for Rumpole of the Bailey's creator John Mortimer [more about him in a prior post].  It pointed out that the barrister had handled some family law cases, something I had not read before.

According to the AP, when asked Mortimer said he preferred murder cases to matrimonial clients.  His theory was that "Matrimonial clients hate each other so much and use their children to hurt each other in beastly ways.  Murderers have usually killed the one person in the world that was bugging them and they're usually quite peaceful and agreeable."

In the one divorce case Rumpole handled, the parties' child was using their typewriter to write fake messages from one to the other to feed discord, so they would each bribe him for his loyalty.   
January 23, 2009

Darth Vader and Snow White - San Diego Divorce Lawyer Wisdom:

The wife of the doctor with the missing kidney has surfaced, and of course she has a different story from that of her husband.  In her version, HE was the one who had the affair [at least the first affair], not she.  Who knows, who cares?  For the purpose of this story, I care.

In San Diego County, when we hear stories like that of Dr. and Mrs. Batista [of kidney swap fame], we have a saying:  "Darth Vader doesn't marry Snow White."

Not that there aren't many marriages where one party is evil and the other a victim, it's just that its pretty likely that neither party is perfect - they found one another after all.  Whether true or not, judges are jaded by that aphorism - they tend to stop listening to the charges after the first sentence or two.  After awhile, it always gets a little ding-dong, as in "For every Ding, there's a Dong", another Divorce lawyer adage. 

The consequence of that reasoning is a lessening of interest in the details of the case.  Judges, in part because of the crunch of time, and in part by the repetitive nature of the work, tend to pigeon hole cases which makes decisions easier.  Unfortunataly, that often puts the parties on an equal footing even though one is trying his or her best to be cooperative, and the other trying to make as much mischief as possible.

Clients often fail to understand why it is important to be on their absolute best behavior during their divorce case - if the judge believe one side is acting improperly, he or she tends to assume there is misconduct on the other side, so it is important that they not be given a reason to believe their assumption is correct - you don't want to give the judge any reason to believe you aren't Snow White.

If, for no other reason, that is why we recommend some type of alternate dispute resolution, from mediation, collaborative practice, and on to private judging where you need someone with authority to pay attention and make hard decisions.  In these forums there is a greater chance the differences between the parties will be more apparent, and dealt with appropriately.

 

 

 

 

January 22, 2009

Rumpole of the Bailey, Mortimer, and Lawyer Literature...

In a seminar all weekend, and spinning at work for 2 days, I had to hear on a podcast that England's John Mortimer died this week.  Rising to the very top of the legal profession, Mortimer is best known in the USA as the creator of Rumpole of the Bailey, an aging barrister with long years in the trenches of criminal defense.  

Despite a career as one of his country's leading lawyers, Mortimer made it clear he understood the life and travails of the small practitioner, including problem clients, problem office mates, problem opponents, incompetent or biased judges, and office politics.  

As a Family Law lawyer, I particularly enjoyed one episode where Horace Rumpole was a little light in his case load when "crime was down", and felt compelled to take on a divorce [something that is happening more and more recently].  From a beginning lawyer, he learned divorces were now "no fault", something that they'd apparently snuck in on him when he was down at the Old Bailey a few decades before.  Briefly stumbling over that minor error, Rumpole adroitly launched into the case without embarrassment.

He also learned that family law clients [unlike criminal defendants who never wanted to hear about their cases again] were free to wander about willy nilly, able to call their lawyers at will.

Horace was a lot like Greg House, M.D., but without the mean spirit, although he loved his glass of Claret nightly.  Neither suffered fools kindly, but Horace manipulated and took advantage of them as he suffered through, always focused on the welfare of his clients.  

Sitting on my shelf are aging VHS tapes of all the episodes of Rumpole. Every few years I take them down and watch a few episodes when I need a laugh.   I need to convert them to digital so they won't be lost to me.  Now if only someone had the foresight to put them on Blu-Ray.  In the meantime, 13 hours of the short stories are available on Audible.com, unfortunately without Leo McKern as the voice of Rumpole, the only person who could have played the part.
January 21, 2009

Suing to Get Your Kidney Back - What's the Point?

You've all heard about the doctor who donated a kidney to his wife, who years later had an affair - he wanted the kidney back or $1,500,000.

Why do so many people treat this story as though the doctor thought he might get one or the other?  As a divorce lawyer in North San Diego County, I have a different perspective. 

The doctor wanted to embarrass his ex-wife, wanted to get sympathy or become a celebrity, got tired of the agonizingly slow divorce process, or something else.  But there's no way he [or his lawyer] thought he'd get the money, and no way he'd get the kidney. He wanted the publicity, nothing else.  Obviously, the story was treated as though it was real news.

Come to my world and see the stupid, offensive, self-destructive, or hilarious things people do for attention during their divorces.
January 18, 2009

Sitting in a Seminar for California Divorce Lawyers....

One of the fun things about being a lawyer is going to seminars.  That is where I'm typing this.

The presenters today are good, the facility great, the food more than adequate, including macadamia nut and chocolate chip copies and individual bottles of imported sparkling water.

Yet, this is only Day Two, and there is another day to go thanks to the MLK weekend.  To renew your license in California, a lawyer needs some of this - not a lot, however.  As a certified specialist in family law, I'm required to have about 12 hours a year of high end family law seminars, on average.  Because this is an average spaced out over 5 years, and we don't tend to keep track on a regular basis, it's important to have extra hours.

Right now, I'm learning a well prepared divorce lawyer needs a $5000 large capacity scanner to turn paper into electronic files [hope my $3500 scanner is sufficient], Adobe Acrobat Pro 9 [$300+, but I have that], and an Extranet [$1-5000 for your IT guy to set up IF you already have Small Business Server 2003 or later - fortunately I have that too].  Early in the presentation, they suggested an 11" x 17" color printer for charts and exhibits and a 42" color plotter to make blow ups for court, as well as a video projector.

I'll be back tomorrow, for Day Three.  Hope they don't spend any time telling me how much more money I need to spend.  At least I'd be boosting the economy if I upgraded everything I own.  I'm glad they didn't tell me I had to have an "S-series" Mercedes, or I'd be really depressed.  

January 16, 2009

Guideline Child Support in San Diego Divorces....

As a result of Federal law, states are required to have guidelines for child support that are uniform from county to county.  California devised a complicated formula based on the net income of the parties and their time shares with the children.  

To determine net income, the court must calculate income taxes, then take out allowed deductions - this step requires a computer to do the calculations.  The next step in the process is to determine how much of each party's income is allocated to children, then transfer the money so that it is divided according to the percentage of time each parent has the child or children - the amount to be transferred is child support.

Theoretically, these steps can be calculated manually, but it isn't worth the effort.  Virtually all judges and many lawyers have expensive computer programs that do these calculations for them.  The most widely used in San Diego County is DissoMaster, followed by SupportTax.  The algorithms and assumptions of both programs were designed by the same person - the main difference is the way the data is input and the way it is displayed.  The judges all seem to use DissoMaster, but the results should be the same.

Determining correct child support, however, is not that simple.  While the calculated amount is virtually mandatory [rather than just a guideline], what numbers go into the calculations are within the judge's discretion in most instances.  This is particularly complicated where there are wide income fluctuations and self-employment income.  Bonuses and overtime will usually be included, even though they are not predictable.

There is an art to determining what income figures to use, how time share is calculated, and what deductions are allowed.  These are things that should be discussed with a certified family law specialist before you make a commitment to pay or accept a certain amount.  In addition, there are add-ons, such as child care, uncovered medical expenses, and other child-related expenses which are purely discretionary.

For more detailed information, see www.divorceandmediation.com, or contact a certified specialist in your community.

January 12, 2009

Community Property - Identification and Division May Not Be Easy...

California is a community property [c/p] state.  In general terms, that means that anything of value generated by the parties' efforts during a marriage will be divided equally between them on divorce or legal separation.  Debts are generally viewed simply as negative assets.  Exact equality has been the rule since it became a no-fault state in 1970.

That may sound easy, and in concept it is.  Litigation between spouses generally revolves valuing the asset, determining whether it is community or separate, and determining what reimbursements, if any, should be granted for the use of non-community property or efforts to buy, pay for, or improve the asset.

There are many misconceptions about c/p that should be discussed with a certified specialist in family law.  Among these misconceptions are the following:



Continue reading "Community Property - Identification and Division May Not Be Easy..." »

January 3, 2009

North County Divorce Lawyer Retired?

A old friend of mine, and I mean old :), hadn't been around the Vista courthouse for quite some time.  He'd been an active Divorce lawyer around North San Diego County for many decades, and slowed down his practice considerably.  I'd been told he had closed his office after a few years of mediating disputes and acting as a settlement judge when lawyers wanted a fresh view of their cases.

He showed up in court one day, helping a family friend with a matter.  Not having seen him around for months, I asked "I thought you'd retired."  

His response, which made perfect sense when I thought about it, was "My wife told me she married me for better or for worse, but not for lunch. Get out of the house."

Maybe that's why most divorce lawyers never seem to retire in these parts.
January 1, 2009

Death or Divorce - Options?

Statistically, one-half of all marriages end in divorce.  The other half end in death.

You could get lucky.