Saving money on the legal costs of your divorce is something most people would love to do. Not spending money on legal advice is one way to do that but as the British would say, that’s being penny wise, pound foolish. Most people would benefit from at least some legal help even if it’s one-time consultation on a specific issue.
If you have any sort of complication such as an inheritance that’s been mixed up with marital assets, a chronic health condition or a family owned business, chances are you are going to need more legal help.
Regardless of what approach you take, whether it’s traditional, collaborative or unbundled, then the good news is that there are some very practical steps you can take to reduce and manage your legal expense. The great news is that these things are simple and not complicated.
Joining me for this episode of Conversations About Divorce is attorney and author Larry Sarezky from Fairfield, Connecticut. Listen in to discover all the factors you should be considering or keep reading …
Learn The Legal Process
Before you have any conversations with attorneys, before you have an initial consult, even if it’s free, do what you can to learn about the legal process for getting divorced where you live. Almost all states in the U.S. have materials posted online and since these are targeted to the people who are working without attorneys, they are written in plain English. Colorado, for example, has flowcharts and instructions for getting divorced or separated when there are children, when there are no children and also when it’s a civil union as opposed to a marriage.
Reviewing these materials will get you started and give you a basic understanding. This could easily save you an hour with an attorney.
One tip, if you try searching for “divorce in XYZ” and that doesn’t produce helpful results, try using “dissolution of marriage in XYZ.”
Ask The Attorney
Sarezky says that good matrimonial lawyers don’t lack for clients. “Those that take pride in their work, look for an efficient divorce and will welcome questions about how to save legal fees.” So ask an attorney during your initial consult and before you’ve committed to working with them, their recommendations for how you can manage your legal fees.
If an attorney reacts negatively to the question, doesn’t give you a straight answer, doesn’t offer suggestions, then this could be a sign that working with them is not a good fit for you.
Use Your Attorney For Legal Matters
This seems obvious but many people fall into this trap. Since attorneys charge by the hour then every minute of every conversation you have with them could be billed, whether it has to do with the legal process or not.
Saresky says, “It’s been a tough balance sometimes. I’ve had clients come in visibly upset by something. I want to be empathetic because that helps the relationship but on the other hand I don’t want a client paying me my hourly rate to do what a therapist should do.”
This is about recognizing that divorce is a complex transition and no one person is likely to have all the answers. Fortunately, these days there are a number of different divorce professionals that can help you – real estate divorce specialists, divorce lending professionals, divorce financial analysts, divorce coaches. Assembling your professional support team and knowing who to turn to on which issues is going to make a significant difference to your legal fees.
Don’t Share Your Life Story
When your attorney (or other divorce professional) asks you an open-ended question like, “So what’s going on?” Or, “Tell me about your situation?” they are not asking you to tell your story beginning with your first date 22 years ago. What they really are asking for is for you to tell them your key concerns and fears. So you might say, “I’m worried that my STBX is hiding assets” or “I think my marriage is over and I need to get divorced.” Then when the attorney, asks why, the response is to share two or three of the most recent incidents that support your concern. Again, resist the temptation to start back years ago and work forward.
What Is Incremental Billing?
Most attorneys charge by an hourly rate, such as $180 per hour or $220 per hour. Most people compare these and stop there. But it’s not enough. There’s another element and that’s incremental billing or a minimum charge regardless of the actual time spent.
If you have a phone call with your attorney and it lasts six minutes, if their minimum charge is 15 minutes, then you will be billed for 15 minutes of time. If their minimum charge is six minutes, then you’ll be charged for six minutes. So, if the attorney who charges$220 an hour bills in six minute increments, then that phone call will cost you $22. If the attorney who charges $180 an hour bills in 15 minute increments, then the phone call is going to cost you $45. So the lower hourly rate doesn’t necessarily mean lower charges.
The incremental billing rate should be detailed in the lawyer’s retainer agreement so do review the agreement carefully.
Does The Attorney Have An Associate?
Some attorneys have associates working with them. They’re usually younger attorneys with less experience. They are billed at a lower rate and it can be cost effective to have an associate do specific tasks provided the work is being supervised by the more experienced attorney and the more experienced attorney is the one doing the work that requires specialist knowledge.
Be Your Own Paralegal
Most attorneys have a paralegal working for them and will delegate tasks to the paralegal. That’s smart and the work that a paralegal does will be charged at a lower rate than the attorney. Again, that will be detailed in the fee agreement with the attorney.
However, Sarezky says, “You’ll be paying for work that most people can do themselves. That’s scanning and gathering documents and data, organizing documents in chronological order.”
Sarezky recommends asking the attorney during the initial consult, what work would be performed by a paralegal and if they would be willing to let you do that work yourself.
Lock In The Fees
No one likes surprises and especially if you’ve committed to an attorney after doing careful research and a month into the process you get notified that your attorney is increasing their fees. The way to avoid this is to ask upfront if your attorney’s fees will stay the same for the duration of your case or for some fixed period.
“It’s not unreasonable to ask and don’t be shy about asking. It’s one of those things, if you don’t ask, you won’t get it,” says Sarezky.
Read Your Retainer Agreement
… before you sign it. If you do hire an attorney to represent you, mostly likely they will ask for lump sum payment upfront, known as a retainer. They will draw from the retainer as they work on your case. The retainer agreement will detail the hourly rate for the attorney, associate and paralegal and incremental billing rates. It will also say what happens to any unused portion of the retainer. Don’t assume the unused portion will be returned to you.
Avoid Lawyer Basketball
Sarezky says lawyer basketball “has nothing to do with paying basketball but you will feel slam-dunked at the end of the month when you get your lawyer’s bill.” Here’s why.
If your attorney is with a firm, they may consult with other attorneys in the firm on specialist issues such as bankruptcy or trusts. When that happens, you’ll be billed for the time of both attorneys. To avoid this happening without your prior knowledge make sure the agreement you have with your attorney specifies that they must request your permission prior to making such consults.
Get Organized
Sarezky recommends creating a divorce binder regardless of whether you’re doing your divorce yourself or using attorneys. Go to the office supply store and buy a 1½ – 2 inch binder and a set of dividers. Then keep all your divorce related papers in the binder organized by category such as financial affidavits, attorney correspondence, settlement proposals, marriage timeline, recent tax returns. While you could also do this electronically, Sarezky says the binder is good in court or at depositions. Having the documents at the ready may save you money if you save your attorney from searching for a document. Do, however, keep the binder safe, maybe at a friend’s house or at work. This is not the sort of information your teenager should be reading and nor would you want your spouse to take possession of it.
Don’t Put Your Attorney On Hold
Last tip … time really is money and when your attorney calls and you need to look something up or find a document, remember the incremental billing. It may be more cost effective for you to return their call than put them on hold.
Larry Sarezky is a family law attorney from Fairfield, Connecticut. His book, “Divorce Simply Stated: How To Achieve More, Worry Less and Save Money In Your Divorce is available on Amazon.