Yes, a sensitive topic for us, as divorce fees likely make your blood run cold, but they are also how I earn my living. Let’s see if we can find some common ground…
How Can You Fund Your Divorce?
During almost every initial consultation the biggest elephant in the room is cost. Clients know that getting divorced can be expensive–sometimes prohibitively so. They also know that divorce lawyers generally bill by the hour at the rate of hundreds of dollars per hour.
When people say they are concerned they cannot afford their divorce they are often referring to paying their divorce lawyer’s fees just as much as they are expressing concern about carrying two households, paying child support, or paying alimony.
When I first started practicing law we were in the early stages of the “Great Recession.” Clients could no longer rely upon equity in their home to take care of legal fees at the end of the divorce. Although unemployment is at near all-time lows and the stock and housing markets have rebounded (at the time of this writing), most Americans do not have $5,000.00 or more laying around for an initial retainer deposit. Likewise, a divorce cannot be financed directly by a law firm and interest cannot be charged, so lawyers loathe playing banker (this writer most heartily being included in that camp). This may create tension in the relationship and concerns that a lawyer is:
• “Nickel and diming” their clients (only it’s a lot of nickels);
• Is dragging out the case and/or “over-lawyering”;
• Is working through the retainer quickly and then withdrawing if the client cannot replenish in accordance with the retainer agreement.
• Is charging not just for every tiny expense but also every communication.
These are all legitimate concerns and both attorney and client should discuss the particulars of what is expected and how the case will be handled. In my own practice I attempt to look to studies and surveys about what clients find most dissatisfying about their lawyers and then attempt to implement policies that address such concerns or take the opposite tact. Regardless, there is sometimes miscommunication on both sides… it cannot be assumed that clients read the retainer agreement or fully understand its terms.
Another potential problem is that the biggest issue in any divorce is often not a legal issue or a complicated financial analysis, but rather the raw emotion that may interfere with settlement. That means that the cost for the divorce of a modest household may not be all that different than the divorce of those with substantially more assets. In most divorces there is at least one party that does not even want to be getting divorced, which may further complicate the emotions of the situation.
Paying for a divorce and particularly the initial retainer is thus sometimes difficult (to say the least). Although I cannot speak for any other firms, I have attempted to make it easy for clients to meet this obligation. For instance we’ll accept payments in the following manner:
• Check;
• Cash (with receipt given);
• Credit Card;
• Money Order
I suspect this is similar to most other practices, although some firms will not take credit cards.
Like many firms, I expect the retainer amount to be replenished. I encourage clients to call me if they question any portion of their bill to discuss as I would rather know if a client is dissatisfied. I also attempt to minimize minor pass-through costs such as for telephone calls, faxes, or the like. Moreover, I attempt not to fully bill for attorney-client communications in divorce matters such as simple calls or emails as I want to keep the lines of communication open as much as possible.
In some cases I obtain counsel fees from the other party. Nevertheless, I expect payment from my clients who must then seek reimbursement from their ex. This too is standard in most New Jersey divorce retainer agreements. I do not like to extend payment plans as I am not a bank and believe there are more appropriate ways for clients to obtain credit.
Communication between attorney and client is paramount in limiting counsel fees and ensuring a positive outcome in the case.
A mentor of mine once said it’s difficult to make a living as a “necessary evil.” Even us divorce lawyers will admit that clients would have much more fun spending money on a cruise, piece of artwork, new car, or home improvements. Few people want to get divorced and paying for the sometimes “necessary evil” of dueling lawyers can exacerbate an already difficult situation. The added benefit of fully understanding the process and your risks, responsibilities and obligations is the divorce lawyer’s stock and trade. If you want to retain my firm but are uncertain if you can afford it, I hope this section will assist you in understanding the potential payment methods and some of the philosophy behind the divorce attorney-client relationship.
Who Pays Counsel Fees in a New Jersey Divorce?
Given the above, you may be concerned regarding how you will pay for the attorney and counsel fees. If your spouse attempts to cut you off from the marital funds, then you may need to pursue court action, but may be involved in a “Catch-22” situation where you can’t retain an attorney due to not having funds. Likewise, you may be in a marriage where your spouse earns substantially more than you or has access to greater assets than you with which to fund litigation.
New Jersey generally operates under what is known to lawyers as “the American system.” In general, this means that each party to a litigation is responsible for their own legal fees. In addition, absent a “fee-shifting” statute, even if you win it is difficult to get reimbursed for the costs of litigation. (The other primary system is known as “The English System,” wherein the loser pays both sides counsel fees).
But divorces are different–they generally involve a pot of communal monies. So in the divorce setting, who pays?
Which Party is Responsible for Divorce Counsel Fees?
Subject to the provisions of Court Rule 4:42-9(b), (c), and (d), the court in its discretion may make an allowance, both pendente lite (i.e. during the pendency of the divorce) and on final determination, to be paid by any party to the action [in the family part]. R. 5:3-5(c) for the award of counsel fees.
In determining the amount of the fee award, the court should consider, in addition to the information required to be submitted pursuant to R. 4:42-9, the following factors:
(1) The financial circumstances of the parties; (2) the ability of the parties to pay their own fees or to contribute to the fees of the other party; (3) the reasonableness and good faith of the positions advanced by the parties; (4) the extent of the fees incurred by both parties; (5) any fees previously awarded; (6) the amount of fees previously paid to counsel by each party; (7) the results obtained: (8) the degree to which fees were incurred to enforce existing orders or to compel discovery; and (9) any other factor bearing on the fairness of an award.
Statute N.J.S.A. 2A:34-23 also authorizes an award of counsel fees in a matrimonial action and further requires the judge to “consider the factors set forth in the court rule on counsel fees, the financial circumstances of the parties and the good faith or bad faith of either party.” An application for an allowance of counsel fees must be supported by an affidavit of services addressing the factors enumerated by the Rules of Professional Conduct 1.5(a) ((RPC 1.5(a)). R. 5:3-5(c).
Issues such as acting in bad faith or refusing to act in a reasonable manner may inure to the imposition of counsel fees against a spouse. The Court will also look to the financial circumstances of each party to determine whether counsel fees should be awarded or advanced. Courts will particularly emphasize any financial disparity between the divorcing parties.
Most counsel fee awards are without prejudice, meaning that the Court reserves the right to address the final award of counsel fees at the time the divorce is finalized.
If you do not have the funds to seek a divorce but your spouse does, you should discuss this issue during an initial consultation with your attorney to determine if appropriate action may be taken to ensure you can afford to keep up with the divorce litigation expenses.
Partner with Carl Taylor, Esq.
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