Recently in Attorneys Fees Category

February 21, 2011

Cost of Litigation in Divorce Cases: Millions for Defense....

Here's a question: Would you spend upwards of $300,000 in attorneys fees trying to get your spouse from collecting what he or she is probably going to get anyway? Does the answer change when the dollars change? Does the answer change if the person is in a tax bracket close to 50%, and has to earn close to $600,000 to pay those fees.

Let's say, hypothetically, there is a very long term marriage. The high earner makes about $1,000,000 per year. The low earner wants support to maintain the marital standard of living. In this hypothetical, the low earner worked throughout the marraige and still works, full time, earning about $80,000 per year. Hypothetically, the temporary support ends up being around $30,000 per month. In gross terms, that leaves the high earner with about $640,000 a year, and the spouse about $440,000 per year. Sounds like a lot of money, doesn't it, but hardly unfair to the high earner after 30 years of marriage.

Temporary support in my county, San Diego, is almost always computer and formula driven: Pretty predictable once you agree on the amount for the parties' earnings and tax deductions. Our computer programs calculate net incomes and divides them on about a 60-40 ratio, although it is adjusted for the recipient-spouse's earnings and often ends up closer to 55-45 if the low earner makes a good living.

Long term support [also called permanent or judgment support] is what a judge would order after trial and the division of assets - the court must then consider a bunch of factors, and is not permitted to use guidelines. Notwithstanding that rule, long term support tends to be close to temporary support for long term marriages: Those twenty plus years, especially if a career was built during the marriage.

Knowing all of that, why would anyone spend that kind of money avoiding the inevitable? I don't have an answer, but it's a question that I ask a lot. Especially after watching it happen time and time again. Personally, I'd rather give the money to my ex-spouse than to the lawyers. The lawyer isn't going to walk my daughter down the aisle or come to my son's graduation, and at least I'm keeping the money in the family.

March 26, 2010

Getting Your "Divorce in a Day": No Way....

There is one local lawyer in San Diego County who specializes in bashing the legal profession, and bragging about the ability to handle a complete divorce in a day: Mediating a settlement, gathering the financial records, drafting all the documents, having an agreement signed, and the case ready for filing with the court. Sounds attractive - especially if you are rushing to get an agreement signed.

That attorney brags of a 100% success record. Unfortunately, the claims are not justified by experience. While that attorney may be able to claim to have talked the parties into a settlement and signed most of the documents in that day, not counted in those bragging rights are the many cases that have later been set aside by a judge or by stipulation because they were unfair, or entered into without sufficient understanding of the law or facts. The same person instills fear in potential clients by telling them that letting some other lawyer near their case will end up costing them tens of thousands of dollars, making outrageous claims of the cost of the average divorce.

And the saddest part is that the work is of low quality, and often could have been handled more competently at lower cost. Two mature, reasonable people, can mediate with a competent mediator inexpensively, and do it right: They don't need to pretend they can or should wrap it all up in a few hours. Typically in my practice, we meet 2 or 3 times over several months; by the time we are done, each knows his or her rights and feels comfortable with the agreement. And we strongly suggest they at least consult with an attorney before signing.

As a concept, it sounds nice that two reasonable people who know what they are doing can go to an attorney, polish the rough edges off their agreement, and have all the paperwork completed quickly, efficiently, and cheaply. Unfortunately, that isn't what happens in practice when they try to do it in a day. One of the things I complain about in this blog is people with insufficient education and training performing mediation in the guise of protecting people from the legal profession and their own inability to reach agreements on their own.

Continue reading "Getting Your "Divorce in a Day": No Way...." »

November 29, 2009

Divorce Mediation, Costs, Lack of Training & Scare Tactics....

Today, courtesy of Google, I received a link to a webpage titled something like "Free Divorce Help in San Diego", followed by an advertisement looking like an article touting a private mediator with a law degree, but apparently someone who never passed the bar examine to become a lawyer. Aside from the irony of starting by offering free help, then charging, the page contained a lot of misinformation.

As with much mediator advertising, it was peppered with misstatements about the cost of the legal process. It reported that lawyers charge "at least $500 per hour" and many charge non-refundable retainers as much as $7500, and "total fees of $100,000 are not unheard of for a divorce."

Although legal services are expensive, let's set the record straight. In San Diego, the number of competent lawyers consistently charging $500 or more per hour is probably well under a dozen. Yes, a divorce can cost $100,000 or more, but that's because the parties are unreasonable and lousy candidates for mediation in the first place - and few lawyers have done cases that have gotten that expensive.

Retainers of $7500? Again a small number of lawyers, or those where the attorney knows going in that there is going to be a large amount of work to do, or there are other issues [a lot of property to keep track of, custody disputes, prior lawyers, a particularly obnoxious attorney on the other side] - and non-refundable retainers are generally prohibited in California, so you are only going to pay for the actual work needed.

And, this person bragged that most cases are mediated for less that $5,000: Now that's still a fine fee to charge if you are a lawyer, and in my experience far more than having a competent family law lawyer mediate your divorce and process it through the courts, as long as the people are reasonable and mature. Yes, most of us charge on an hourly basis for the work, so there is no limit, but you can have it done competently for less, in most cases.

One regular warning I make here is that you need to examine the credentials of the mediator: In my mind, it is more than taking a short class in how to help people reach agreements, and knowing some basics about the law. You want accurate information about your legal rights and responsibilities and knowing the mediator's thought processes have been honed by litigation, where biases and assumptions are tested daily. A J.D. degree means the person went to law school - it does not mean or imply the person knows the law, or ever competently practiced. Masters and Bachelor degrees are meaningless in choosing a mediator.

There is no substitute for education and experience as a family law specialist with years of litigation experience. Scare tactics to draw you in should be viewed with suspicion. If you can hire a true expert for the same price, why go to someone with a good sales pitch that lures you in with a promise of free or cheap resolution of your divorce? Someone who badmouths competitors on the basis that they are educated, knowledgeable, and experienced. There are a few, money hungry lawyers, whom you can't trust, but the vast majority know what they are doing and went into the legal profession because they wanted to be able to help people.

May 22, 2009

Intense Competition, Need to Litigate, Part Two:

April 19th, I posted about problems with an overly competitive lawyer.  This week, the latest episode had the lawyer attempting to skulk off after biting off more than he could chew - even whining in court didn't offer any daylight for his motion.  The story is illustrative of the need to win and the inability to find solutions for a problem, ultimately leading to far more costs to the clients, his own as well as mine.

My client had a support obligation - he paid support in chunks as he got paid by his employer, primarily by transferring money into a joint bank account from which his wife made withdrawals - admittedly, he didn't keep a log of what he'd paid, but he thought he was current.  Along the way, his wife made a couple of transfers out of some joint assets for which he thought he should get credit.  Overall, he thought he was current, especially since she had taken money out of their joint accounts.

The outcome?  Keep reading....

Rather than try to discuss his claims so we could find out who was right, this lawyer ignored by letters setting forth the husband's claims, and simply filed a motion with the court to have his arrearages set.  I filed my client's story, and it appeared he had actually overpaid, even if we didn't count the money his wife had taken.  

At the very last minute, the lawyer then set forth a lengthy declaration trying to explain his client's response to the husband's assertions.  The judge looked at the mess, and concluded there was too much disagreement - a lawyer was appointed as a special master to review all the documents and claims, and make a recommendation to the court - a special master would have more time than the judge could devote to a complicated dispute involving a lot of paperwork.


Continue reading "Intense Competition, Need to Litigate, Part Two:" »

March 16, 2009

Dogs, Pets, Attorneys Fees, and the Divorce Lawyer...

Somehow, I stumbled across this article about people fighting over custody of their dogs in divorce cases.  Written in 2006, it discusses appellate court decisions from across the country on the subject, and the author's opinion of changing standards.  I know of no reported California cases on the subject.

Historically, dogs were personal property.  As I recall, there used to be California cases saying that cats weren't property, because no one could actually own a cat, but for this purpose I'm not going to research the subject since it's not intended as a treatise on the law.  [As i recall, these cat cases dealt with issues such as whether a neighbor could steal your cat or dog, or be responsible for injuring one.]

When lawyers in North County [San Diego], where I practice, talk about old time practitioners, they often tell about a major trial over ownership of a parrot some decades ago.  It involved two very litigious attorneys who have since probably joined the bird in the hereafter.  [One billed himself as "The Prince of Darkness."]

We all laugh at the absurdity of people spending 10's of thousands of dollars over custody of a pet - now, I appreciate their attachments to an animal, but essentially they are gambling that the judge will see it their way.  It's one thing to fight over a child and how many hours of time share might swing one way or the other depending on how the judge sees things, but with rare exception the dog is going to one or the other [please don't get me started on judges who try to set visitation rights for pets].

In a website that attacks judges and lawyers in San Diego [that will go unnamed], there are tales about courtroom fights in our county over dogs and cats, including a lengthy trial over Fifi - one-half of the 3-day trial was allegedly devoted to the animal.  Now I understand an attachment to pets, but the Wife's fees ran about $150,000.  The website and that article is critical of lawyers charging outrageous fees over such issues.  I won't list the website, as it's largely run by a disgruntled litigant, who is occasionally right, but often wrong - he [or she] is anonymous, from Beverly Hills.

That site portrays the fights as a way for lawyers to gain fees at the expense of their clients - now that happens a lot.  But, the clients allow it to happen by making the issue over which they are fighting more important than their financial and emotional futures.  In our parrot case, the lawyers were just argumentative and overly competitive - this was in the day before divorce cases often ran to days or weeks, so the arguments and testimony took only a few hours.  Our lawyers weren't fighting to gain a few bucks, but over principle and their client's desires - the cost wasn't a major factor in those days, but winning was.  I wish I could say the same today. 

Over the decades I have practiced, I have seen many people fight to the death over absurd issues, spending endless dollars on issues they can't win or as to which there is going to be no winner. 

Fighting over a child has a certain biological imperative about it - you can't go to a kid show and pick up another kid bred for the same look and temperament.  But you can probably find a dog that gives you as much love and affection as the one you give away in the divorce - especially if you have $150,000 to spend since you aren't buying your lawyer a new Corvette or a few dozen St. John suits.

Friday, some friends brought home a playful, loving chocolate Labradoodle puppy to replace the Golden Retriever they had lost a few months ago to illness.  It is amazing how, in one day, the new member of the family has taken over as the focus of their lives.  And, they have $149,000 left to spend on something worthwhile.  It's not Fifi, but they don't seem to notice as they never knew Fifi.

Sometimes cases just need to be decided on the flip of a coin, and the parties move on.

February 11, 2009

Lawyer Ads, Freakonomics, and Unequal Information....

A friend sent me an e-mail in response to a post about misleading ads by lawyers.  Along with it was a link to a San Diego lawyer who brags on his website that he's the recipient of "a prestigious award."  I know the award, and there is no prestige associated with it - in fact, it's like a movie getting "four tomatoes;" you probably don't want to go see it, and you don't see it in the movie posters.

One premise of the best seller Freakonomics the disparity of information between experts and their customers makes it impossible for the latter to determine how to do the expert's job, how to know if the expert is making things up, or whether the expert truly has any expertise.  As a result, the expert gets paid a lot of money because he knows the secret information.  There is a huge information gap, resulting in the expert getting paid a lot for access.

This is changing rapidly as the world turns toward the Internet, where there is actual information you can use if you dig deeply enough, available free to everyone.  While I can't recommend that most clients use the Internet to do their divorces or other legal work, they can use it as a way of confirming what they are told or providing a list of questions to ask their attorney. 

There is still no substitute for the knowledge of the lawyer about how court's work, what particular judges do, how certain opponents approach their cases, and the nuances of the law.  But there are many websites providing limited information on calculating guideline support [assuming you know what to input into the program], and case law is available from many sources.  You just need to be careful applying what you read, because the facts of your case may be different from those of your friend, or from the examples you find online.  And, there are wide variances from state to state, and even from county to county.

It is impossible in a blog to discuss where and when you should seek out a lawyer, but I can state from experience in representing lawyers and their spouses in divorce cases that even lawyers who practice in other fields don't understand family law when they read it.

Now, back to the ad.  The award is named after a California Code section, and is given periodically by a local association.  Sounds impressive, until you read the code section itself:

Continue reading "Lawyer Ads, Freakonomics, and Unequal Information...." »

February 1, 2009

Divorce and the Hourly Rate, a San Diego Lawyer's Perspective...

In a prior post, I wrote about a New York Times' article on the problems of lawyers charging hourly rates.  At the end, I said the hourly rate is a legitimate basis for a lawyer's time in divorce and other family law matters, and generally there isn't another good choice.

In these cases, no one can predict how difficult the case or parties will be.  Emotions often drive the litigants, and no matter what happens in their case it will result in a big change in their lives so there is an incentive to fight.  The lawyer often has no control over how difficult the case will be, and there are no limits to the amount of work that would be required.  Under the best of circumstances, the lawyer can usually not predict how much work will be involved.   In some types of legal work, taking a case on contingency changes the equation.  However, [at least in most states] a lawyer can't take on a divorce case for a percentage of the outcome he gets for his client.

No matter how good the lawyer, he cannot predict how much time it will take to handle almost any family law case, whether custody, division of property, modifying support, collection, etc.

Maybe a lawyer can charge a flat fee for handling a default divorce where everyone is in agreement.  But what happens if one party to the agreement decides to change his or her mind, repeatedly - what if you can't get their cooperation to produce the documents required - what if the court wants the lawyers to keep coming in and explaining why the case is taking so long to resolve?  How can the lawyer work for other clients when dealing with these problems on a few cases for which he can't charge for the extra time?  Is it fair to the lawyer?


Continue reading "Divorce and the Hourly Rate, a San Diego Lawyer's Perspective..." »

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..." »