Meredith Cohen, Certified Mediator
Divorce by Mediation
605 East Robinson Street
Orlando, FL 32801
Phone: 407-977-0021
FAX: 407-641-8390
The following is an excerpt from the book “Divorce by Mediation, See a Mediator Before Seeing Attorneys - Save Thousands” by Meredith J. Cohen copyright © 2000 by Meredith J. Cohen.
CHAPTER 1
THE HIGH COST OF DIVORCE
LAWYERS AND THEIR FEES
Practicing law for over 30 years, representing husbands and wives in contested divorce cases against many different lawyers, has taught me why attorney fees in divorce cases can be so high. Basing fees on hourly rates for time worked is the culprit. If you consult a lawyer to represent you in your divorce, and he or she quotes you a retainer of $2,000 to apply to the lawyer’s time at the rate of $150 per hour, you may think that the total fee will be $2,000 or very close to it. But that retainer of $2,000 will cover 13.33 hours of the lawyer’s time at $150 per hour. If the case through trial uses up 30 hours of your lawyer’s time (not uncommon in a contested case), the total fee goes up to $4,500.
When you deal with others providing services, such as an auto mechanic, you normally receive a written estimate of the cost before the work is done. If you decide to go ahead with the work, you expect the final bill to be at least very close to the estimate. Many people dealing with divorce lawyers look on the retainer as an accurate estimate of what the job will cost. But a careful reading of most attorney–client agreements in divorce cases will reveal that the retainer is really nothing more than a down payment on a total fee that will be determined at the end of the case by the number of hours the attorney worked. That total fee can be double the retainer or more. You will usually see nothing in the attorney–client agreement that puts any limit on the total fee. As an example, I represented a professional person who paid a retainer of $5,000. His final total fee based on my hourly rate of $250 per hour was $130,000. That case lasted two years, including appeals, and was bitterly contested every step of the way by my client’s spouse and her lawyer. Her lawyer was an expert in “running the clock,” which means using every possible tactic to increase his time working on the case and thus increase the total fee. It also meant much higher fees for my client, because of the tactics of the other lawyer. Despite my efforts to expedite a settlement of the case and end it sooner to keep my client's fee lower, the other attorney's conduct made it impossible. Even though the marital assets in that case were substantial, too much was needlessly wasted on attorney fees.
I saw the same thing happen in a contested divorce involving a middle-class family with assets of $100,000 who paid out $50,000 in attorney fees. Gone were the retirement fund for the parents and the college money for the kids. The Florida Appeal Courts have angrily denounced the outrageously high attorney fees being charged in divorce cases that ultimately cause a substantial portion of the family assets to end up in the pockets of the attorneys.
HOURLY RATE FEES AND SOME ALTERNATIVES
As noted, one cause of excessive fees in divorce cases is hourly rate billing. Why do attorneys charge that way? One reason is that it is easier for an attorney to sign up a divorce client with a low retainer. Many businesses sell high-priced products with a low down payment and the balance due later to make it easier for the consumer to buy. For example, a builder can sell many more houses more quickly with a 10% down payment than he can if he requires payment in full. Likewise, it is easier for an attorney to sign up a divorce client for a retainer of $2,000 rather than specify a total fee of $10,000 at the beginning. As the public becomes aware of the misleading nature of small retainers and large hourly rate balances that divorce lawyers now favor, there will be more and more clients who will insist on knowing at the beginning of the case what the total fee will be. Then the total fee will replace the hourly rate fee in divorce cases. An experienced attorney after a thorough interview of a prospective client should be able to accurately estimate the number of hours of work it will take to complete the case. Knowing that, the attorney can quote a total fee. Once an attorney agrees at the beginning to complete the case for a flat total fee, his motivation from then on will be to end the case as soon as possible, not to litigate it as long as possible. When flat total fees are the rule, clients, depending on the complexity of their case, might see attorney–client agreements in contested divorce cases with flat total fees of $1,000, $2,000, $5,000, $7,500, $10,000 and so on.
One risk the flat total fee attorney will still face is the client who decides to fight to punish or “get even” with the other party and insists that his attorney fight on beyond a reasonable point for the total flat fee. Some attorneys today are using a two-stage flat total fee to motivate such a client to settle the case rather than go to trial, with a fee of, say, $5,000 if the case is settled before preparation for trial begins and $10,000 if preparations for trial begin. By settling and not going to trial, the client saves a substantial amount. Both the attorney and client are then motivated to conclude the case as soon as possible. The only defense of the attorney who accepts a flat fee against the client who wants to fight as long as possible is to prepare the case so efficiently that the trial will take place as at the earliest possible time, which will conclude the attorney’s obligation.
It will soon become clear why mediation costs so much less than the fees of two battling attorneys in divorce cases.
ETHICAL CONSIDERATIONS
One attorney cannot represent two clients who have conflicting interests. This ethical rule prevents one attorney from representing a husband and wife in a divorce case, even if both parties want the same attorney to help them work out their settlement agreement to save the expense of two separate attorneys. An example of such a conflict of interest is a case where permanent alimony is an issue. An attorney representing the wife might advise her to claim permanent alimony because she needs it, the husband can afford to pay it, and the marriage was long enough to justify it. But the attorney representing the husband might advise him not to pay permanent alimony because the marriage was not long enough or the wife can support herself. In such a case the Judge might or might not award permanent alimony. Here one attorney trying to represent both parties for the preparation of a settlement agreement would clearly have a conflict of interest. He’s expected to advise the wife whether she is legally entitled to alimony and is expected to advise the husband where he is legally obligated to pay it. The interest of the wife is to get alimony; the interest of the husband is not to pay it.
A mediator who is an attorney cannot and does not represent either party as an attorney during the mediation, and cannot give either party legal advice on what to do about alimony or any other issue. Therefore, such a mediator is ethically permitted to explain the law on alimony and help the parties work out an agreement on alimony even though they still have a conflict of interest on that point. A competent mediator would advise each party to take the mediated agreement to separate attorneys for legal advice before signing for an estimated fee of $150 for an hour of the attorney’s time.
We have been discussing attorney fees in contested divorce cases. In the next chapter we will take a closer look at a contested divorce and find additional reasons to consider mediation as an alternative method of resolving a divorce dispute.
©2009 Meredith J. Cohen, PA