By Teri Morrison

If you believe your children will be unaffected by your divorce, you’ll be surprised to learn that all children of divorce suffer emotional injuries. So the question is not whether they’ll be hurt, but how badly they’ll be hurt. Here’s how to minimize the damage.


When Linda and Steve (names have been changed to protect the identities of individuals quoted in this article) decided to divorce, they worried about how their eight-year-old daughter Shannon would react to the news. They quickly and amicably finalized the divorce to avoid dragging Shannon through an emotional battleground. To keep Shannon’s life from having too many major upheavals at one time, they decided that she and Linda would remain in the family home while Steve moved to an apartment across town. Steve and Linda hoped that if Shannon’s school routine and social connections weren’t disrupted, the transition to a new family situation would be easier on her emotionally.

Eight months later, Linda is breathing a sigh of relief. Shannon seems to have adjusted well to the divorce. “Sometimes, I think Shannon is coping with our new living arrangements better than I am,” says Linda. “She never causes a problem for either me or her father. In fact, she seems more helpful around the house than before the divorce — I never have to remind her to clean her room anymore, for example, or that it’s her turn with the dishes.”

Jennifer wishes she were half as lucky with her eight-year-old son, Sammy. She and her ex-husband’s divorce proceedings mirror those of Linda and Steve, yet Sammy’s reaction to the divorce is almost the exact opposite of Shannon’s. “I can’t seem to reach Sammy,” says Jennifer. “His grades are slipping in school, he lashes out at both me and his father over the smallest things, and he often refuses to do his chores. The hardest part for me is watching my bright, happy-go-lucky son transform into a moody, angry little boy.”

Most people reading this would agree that Sammy — and probably his parents — need some counseling to help him adjust to his parents’ divorce. Many would also agree that Shannon is every divorcing parent’s dream: a child who seems to accept his or her parents’ divorce with little or no fuss. However, while Sammy might seem as if he’s headed to detention hall for life, Shannon may be the one who’s more in need of counselling.

Michael Cochrane, an author and lawyer specializing in family law, sums up the three basic categories children fall into when coping with divorce: “There are two extremes of behavior that divorcing parents often see: the super-good children, who believe that if they’re on their best behavior, their parents will patch things up; and the complete opposite, where children use negative behavior to draw attention to themselves. The worse they act, they reason, the more likely their parents will become united in a common cause to handle the problem.”

The third category, Cochrane points out, is the one most parents overlook because they want to believe that their kids are coping just fine with the divorce. “Shannon is a good example of the kind of child who doesn’t ask a lot of questions, get upset, or act up during and immediately after the divorce,” says Cochrane. “However, children like Shannon are probably in shock or denial: they don’t know what to say, so they don’t say anything. These kids have a longer, slower-burning fuse than kids who act up, and eventually — whether it’s a year or five years — their fuse will blow.”

Warning signs

Okay, so it’s obvious that 99.9% of children will somehow be affected by their parents’ divorce. Could anyone — parent or child — be expected to exhibit “normal” behavior when going through something as traumatic as the breakup of their family?

Today, enough children have gone through their parents’ divorce to allow psychiatrists, therapists, family counselors, and other related experts to determine what might be considered “normal” under the circumstances. It should only take about a year for children to come to terms with a divorce, and while they may still have feelings of sadness or anger, they should be coping well with those feelings. Ideally, by the end of the first year after the divorce, your children should have:

• dealt with their feelings of loss due to the divorce
• dealt with any feelings that they were rejected or deserted by one of their parents
• accepted that the family will no longer be living together
• accepted that you will not be reuniting with their other parent
• removed themselves from adult conflicts
• returned to a normal interest in themselves and their activities
• stopped blaming themselves for the divorce. If you moved as a result of the divorce, they should have:
• adjusted to your new home and their new school, and have made some new friends.

When to seek help

One bad grade on a school test doesn’t mean you need to make an appointment with a family counselor. Remember that not all of your kid’s problems are going to be a result of your divorce: one fight at school, an incident of bedwetting, or one bad school grade isn’t necessarily linked directly to the divorce. These kinds of things happen to any child in any family situation. So before you start panicking that your child has become psychologically damaged for life, check your local bookstore or library for books explaining the development of children (See Recommended Reading on page 26 for some good examples). These resources will help you understand the difference between normal and problematic behaviors.

Discipline problems are usually what spur parents to seek professional help for their kids. Discipline problems can stem from your child’s inability to sort out his/her feelings or to adjust to the divorce — or it might just mean that your child is lacking good coping skills. A child’s bad behavior can result from fear, hostility, or insecurity, and it’s a sign that your child needs more positive attention. Children who don’t receive positive parental attention try for any kind of attention, even if it’s negative: they would rather misbehave and get yelled at than not get any attention at all.

Some therapists assert that any extreme deviation from a child’s normal course of behavior is a sign that he or she has been affected by the divorce. “A parent should look for extremes in any direction: wild behavior in a quiet child, or if a sociable child won’t come out of his or her room, for example,” says Dr. Robert Galatzer-Levy, a Chicago-based child and adolescent psychiatrist.

“Changes is a child’s social behavior are often the best indicators that something is wrong,” says Barbara Anderson, a Toronto therapist and mediator. “For instance, you should be concerned if your child is suddenly acting out violently; regressing to an earlier stage such as bedwetting; having problems playing with friends; developing academic problems; or even experiencing physical problems such as developing stomach or head aches, sleep problems, or eating disorders.”

While you shouldn’t wait forever to seek professional help, you should give your kids six months to a year to get over the divorce — if their adjustment problems aren’t too severe. Consider seeking outside help if your child is:

• doing uncharacteristically badly in school for three or four months, even after you’ve consulted his or her teachers and/or school counselors
• losing friends because he or she is acting in an unusually aggressive manner
• showing uncharacteristic, intense anger towards others; this could be anything from temper tantrums to overreacting in minor situations
• developing prolonged mood swings that range from extreme hostility to extreme affection
• showing unrestrained grieving for his or her absent parent and/or for your former family life
  showing other radical changes in behavior, such as continuous problems in school (truancy or fighting, for example), cheating, lying, stealing, eating disorders, or alcohol or drug abuse.

If a child internalizes his or her feelings about the divorce, then it’s much more difficult to know if he or she is having problems coping. In fact, a child in this situation may not show any outward signs of trouble until years later. This is more often the case for girls than boys, as Cochrane points out. “A seven-year-old boy is more likely to act up and give his parents a hard time than a seven-year-old girl,” he says. “Boys tend to act up while the divorce is under way. Girls tends to be ‘peacemakers,’ and don’t cause a problem until early adolescence.”

“Parents want to believe that their kid is okay, but they don’t realize that their child has learned to cope in an harmful way,” says Jayne A. Major of the Parent Connection in Los Angeles. “But if a child is ‘fine’ with the divorce he or she is probably disguising feelings of despair, pain, and fear, which can be very hurtful to his/her psychological development.”

In cases like this, a school teacher, guidance counselor, family doctor — someone your child likes and trusts — may have more luck than you in trying to discern what’s really going on with your child. “Many children hide their feelings from their parents because they feel they’ll be hurting and overburdening them with their emotions,” says Joan E. Massaquoi, a divorce mediator and psychotherapist in private practice in Chicago. “They feel that if they open up to their parents, they will be putting more stress on them. They keep everything locked inside because they feel the need to protect their parent.”

In the meantime

While some children make it through their parents’ divorce relatively easily, others can feel the after-effects of a divorce for months and even years later, suffering socially, emotionally, and academically. The reasons some children cope better than others are as varied as the children themselves. However, research indicates that the lasting effects of divorce on children usually occur when a divorce is particularly difficult. If parents are fighting and are filled with anger and hurt, they generally don’t supply their kids with the kind of consistent care they need — especially at emotionally trying times. Experts agree that the best way parents can help their children cope with a divorce is to plan from the outset to keep the hostility and bitterness to a minimum before, during, and after the actual divorce proceedings. “Try to reassure them that although there are going to be changes in their lives, the changes won’t all be bad,” says Anderson. “Take their concerns seriously and provide them with lots of reassurance of your love for them.”

Above all, remember that you can’t make your children happy, or speed up their grieving process. Provided with support, love, and consistent care, most children eventually adjust to divorce by themselves.

By Jeffrey Cottrill

Negotiation skills will help you achieve some of your needs and wants without alienating or angering the other parties involved. Here’s how to use negotiation to resolve disputes and to build better interpersonal relationships.

We’ve all heard about those nightmarish divorces that drag on in court for months or years because one or both parties is determined to get his or her way in the final outcome no matter the cost. There are also cases in which one party gets “cleaned out” by the other because of a failure to communicate or inability to stand against the more powerful personality’s demands. Truly adversarial litigation is a costly, damaging process that often results in at least one party getting shafted: the adversarial “win-lose” contest inevitably results in bitterness and dissatisfaction for somebody. That’s one reason why mediation and collaborative law have become more popular as cooperative “win-win” methods of settling divorce. Rather than ducking it out until one party wins, it’s far more constructive for both parties to work out an agreement together — through the art of negotiation.

Negotiation is an important personal-relations skill — one that enables you to get what you want without running roughshod over those around you. Whether you’re dealing with your ex-spouse, friends, relatives, neighbors, co-workers and supervisors, professionals, or even your children, you have to be able to put everybody’s point of view in clear perspective, so that you can create a solution that works for both of you.

Be fair to the other party

You know what you want, of course. That’s the easy part. It’s when you show respect for what the other person wants that you move towards fair negotiation. Sometimes a solution that addresses both parties’ goals is possible, and sometimes both parties’ goals directly conflict with each other — but once both parties understand and empathize with each other’s point of view, the situation can change from an adversarial deadlock to a resolvable dispute.

One of the most difficult barriers to successful bargaining is when at least one party chooses a fixed position or “bottom line” and stubbornly sticks to it without considering its fairness to the other. For example, if both spouses in a divorce want full custody of the children and completely refuse to compromise, the process won’t go anywhere. But if one spouse yields to the other — or better yet, if both agree on joint custody — the process can move towards resolution. Smart negotiators know that they will have to compromise on some issues to a certain extent and that they’re highly unlikely to get everything they want.

Sometimes, however, a party will be immovable not because of needs or wants but out of a personal desire to “get back” at the other party. This only leads to escalated conflict and the kind of expensive, draining, adversarial mudslinging that you’re trying to avoid. Don’t give in to anger or hate. Even if you’re still carrying hostility towards the other person over past issues, keep it out of the negotiation process. Remember that the goal is to reach a fair agreement, not revenge or “teaching a lesson.”

Negotiation is about working together, not competing or contesting against each other. So if you want the other party to understand your needs and make a few compromises in your favor, you will have to do the same for him or her. So listen to the other person. Give the other party the space and time to make his or her needs clear. Try honestly to understand how the situation looks from the other side’s point of view; this may be the most valuable skill you can master in bargaining with others, be it in a divorce or any other dispute situation. Listen to the other side in the way you would like them to listen to you. The more respect and attention you show to the other person, the more likely the other person will be to let down his or her defensive guard and show you the same respect.

Even if you know that something the other side wants is impossible or unfair to you, don’t immediately criticize or judge the person for it. Saying, “You can’t do that!” “Do I look stupid?” or “Over my dead body!” are all good ways to start an argument and burn down the bridge of understanding you’re trying to build. Instead, hear the other party out first and then deal with how to reconcile your conflicting wants. Is there a solution to this that leaves both of you satisfied, as opposed to having one happy and the other unhappy? Also ask yourself if this particular issue is as important to you as you think it is. Would it really be that much of a loss if you made a sacrifice in this area, or just gave way a little? Or maybe there’s a way both of you can “share” the benefits?

This will require you to “take the high road” and leave the past in the past. You can’t drag old hurts and resentments into your negotiation and expect it to succeed. Find somewhere else to vent your anger and frustration — with a counselor or a support group, for instance — so that you can be as calm and cooperative as possible under the circumstances.

A complete understanding of the other person’s perspective as well as your own is essential to negotiating a fair resolution to any problem.

Be fair to yourself

Negotiation is about give-and-take. While it’s important to let the other party feel that his or her needs are being addressed, be sure that you’re being heard equally. As admirable as it is to be generous and give way on issues, a deal can’t be truly fair unless you’re receiving the same generosity and respect in return. Remember, the saying isn’t “do unto others better than you would have them do unto you.”

There are instances in which one party of a negotiation may give in too much to the other because of a power imbalance: the former may feel threatened or simply be too much in the habit of giving in. For example, this may happen in a divorce mediation for a marriage in which one spouse has always been dominant over the other; sadly, this pattern often continues even when the couple breaks up. There are also instances in which one party may want to give away the farm to ease his or her guilt — particularly if the other party has been very vocal about supposed wrongs or injustices done by the former. But the object is not to right past wrongs or to keep the other person quiet: it’s to achieve a fair resolution for both. This is where a neutral third party (such as a mediator) may be helpful in assuring that all get their say in a negotiation; he or she would be able to spot when one person is getting the short end of the stick or just isn’t being heard.

If no neutral third party is available, you may have to stand up for yourself when dealing with somebody who tries to take advantage of your guilt or generosity. Listen to the other party’s needs and concerns, but don’t let them completely override your own. Be firm if you know for sure that you’re not being treated fairly; don’t give in to guilt or feelings of inferiority. If the person you’re trying to negotiate with continues to be unreasonable, a fair final agreement may be impossible without the assistance of a trained mediator or collaborative lawyers. Sometimes, a more firm, confident attitude in bargaining can work wonders. A normally domineering or stubborn person may be baffled by your refusal to back down and eventually find no other alternative than to give in on the issue.

When the other party is being reasonable and agrees to let you have something your way, don’t be ashamed to take it. In exchange, of course, assure the other person that some other issue will go his or her way. Accepting the other party’s concessions is just as important to negotiation as offering concessions: both reinforce the fact that you are aiming at a “win-win” solution rather than either of you being short-changed.

As important as it is for you to understand the other party’s viewpoint and needs, he or she has a duty to do the same for you. Negotiation is a cooperative process: it won’t work if either of you is still trying to get the better of the other.

A better outcome

There are many benefits to bargaining with somebody instead of arguing or fighting to the bitter end over an issue. Negotiation turns your opponent into a partner — even, potentially, an enemy into a friend — because you’re working together to benefit both of you. You can avoid the increased resentment, hostility, and awkwardness that result from continued antagonism; you can avoid the wasted energy, stress, and emotional strain that are involved in clinging to your position and pursuing your wants at all costs; you can wind up with an outcome that’s fair, pleasing, and the result of your own empowerment.

Master the art of negotiation, and you will be assured success in human relations in many situations. Follow the tips above, and you can reap benefits without having to risk being defeated in any “battles.”

Negotiating Dos and Don’ts

Here are some things to do — and not to do — when negotiating with someone:

• Do listen attentively.
• Do demonstrate respect for the other person’s point of view.
• Do make your own point of view clear — without blaming or whining.
• Do separate your “non-negotiables” from areas where you’re willing to compromise.
• Do look for “happy medium” solutions that satisfy both parties.
• Don’t drag past disputes into this one.
• Don’t be rude to, interrupt, blame, or patronize the other party.
• Don’t back the other party into a corner with absolute demands; these inflexible statements usually begin with phrases such as “You must…” or “You will never…”
• Don’t give in to demands out of intimidation or guilt.
• Don’t expect to get everything you want.

By Nancy Kurn, CPA, JD, LLM, MBA, CDFA

If you’re thinking of taking the plunge for a second time, you should seriously consider having a prenuptial agreement or marriage contract in place before you walk down the aisle.

A prenuptial agreement is a contract that two parties enter into in contemplation of marriage. It can also be referred to as a “premarital agreement,” “antenuptial agreement,” or simply a “prenup”; in Canada, it is called a “marriage contract.”

In most states, until the 1980s, prenuptial agreements were deemed against public policy and not valid to the extent they pertained to divorce or separation. They were considered against public policy, because it was thought that they encouraged divorce and allowed the husband to thwart his legal obligation to support his wife. Prior to that time, they were valid to the extent that they pertained to the death of one spouse.

A postnuptial agreement (a marriage contract in Canada) is similar to a prenuptial agreement except that it is entered into after the parties have married. In some states, postnuptial agreements are not valid if either spouse is contemplating divorce or separation.

Canadian law also recognizes cohabitation agreements for couples of the same or opposite sex that currently, or intend to, live together.

First, a brief overview of U.S. law. In community-property states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin), any assets that are acquired during the marriage are marital assets and divided equally between the spouses upon divorce. In equitable-distribution states, any assets acquired during the marriage are divided between the spouses in a fair and equitable manner. In many states, the appreciation in value of a separate asset during the marriage is a marital asset.

Generally, a prenuptial agreement sets forth how the marital assets will be divided in the event of divorce or either spouse’s death. It can also address what assets remain the separate assets of each spouse and what happens to the appreciation in value of the separate assets. For example: Joe has an IRA worth $200,000 at the time he marries Barb. When they divorce, six years later, the IRA is worth $500,000. In some states, $200,000 would be considered Joe’s separate property and $300,000 would be considered a marital asset to be divided between Joe and Barb.

Barb has a home worth $250,000. Joe moves in after they marry, and they use the home as their marital home. When they divorce, the home is worth $400,000. The court is very likely to decide that Barb made a gift to the family, classify Barb’s home as a marital asset, and split the entire asset. If Joe and Barb created a prenuptial agreement, they could have agreed that Joe’s IRA — including any appreciation during the marriage — would have remained his separate property and that Barb’s home — including any appreciation — would have remained her separate property.

Although there are limitations in many areas, prenuptial agreements may also cover issues of spousal and child support. The spouses can agree not to contest any estate-planning documents prepared by the other spouse and to give up certain statutory rights upon the death of one spouse. They can also agree to file joint or individual tax returns during the marriage.

Some couples also cover issues that arise during the marriage, such as their children’s religious upbringing, how household duties will be divided, how finances will be handled, and sometimes even how often the couple will have sex. These provisions are best left out of the agreement, because a judge has no mechanism to enforce them. In addition, you have to be very careful with these provisions, because if they are too unusual, the entire agreement may be deemed invalid by a judge.

In addition to addressing how the assets will be divided, it is also important to decide how debts, particularly those acquired before the marriage, will be divided.

Limitations

Generally, two parties can agree to anything that does not violate any law or oppose public policy (interest). For example, contractually encouraging someone to divorce would be against public policy and invalidate the agreement. A prenuptial agreement has several limitations; some are unique to prenuptial agreements:

1. The parties must fully disclose their assets to the other party. Otherwise, one spouse is giving up rights to assets that he or she knows nothing about.
2. Some states do not allow prenuptial agreements to limit or eliminate spousal support. In addition, the agreement may be deemed invalid if the spousal support is very high, because the agreement then encourages divorce and is against public policy. In Canada, spousal support provisions are valid.
3. Child support cannot be limited pursuant to a prenuptial agreement. In some states, child-support provisions will be upheld as long as the support is not less than the statutory guidelines. In other states and in Canada, provisions regarding child support are invalid. Anything limiting child support to less than statutory amounts cannot be enforced. Child support is governed by state guidelines in all 50 states.
4. In both the U.S. and Canada, any agreement regarding child custody or visitation in a prenuptial agreement is invalid.
5. A judge could deem the agreement void based on typical contractual theories such as fraud, misrepresentation, duress or coercion. A unique circumstance with the prenuptial agreement is the timing of the signing of the agreement. If the groom takes the agreement to the bride the night before their wedding, then she could certainly argue that she signed the agreement under duress, or that she was coerced into signing it. To avoid the argument that the agreement was signed under duress, it should be signed long before the wedding takes place. Some would argue at least 30 days and others recommend before the wedding invitations are sent to the guests.
6. The prenuptial agreement cannot be unconscionable. If one spouse is left destitute, the court may decide that the agreement is not valid, because it is unconscionable.
7. In Canada, any provision in the prenuptial agreement regarding the right to live in the matrimonial home, or the right to sell or transfer the matrimonial home, will be invalid.

Benefits

Prenuptial agreements are not just for the wealthy. They are particularly useful in second marriages, where one or both spouses have children from a previous marriage.

Mike and Carol are going to be married. Mike is a widower and has three sons. Carol is a widow with three daughters. Both of them have assets that they are bringing to the marriage, including the death benefits they received upon the death of their first spouses. Mike and Carol are contemplating hiring attorneys to prepare a prenuptial agreement to ensure that the assets they received from their deceased spouses will go to their respective children.

A prenuptial agreement has numerous benefits. Some of these benefits include:

1. The certainty it provides as to what happens in the event of a divorce or the death of either spouse.
2. Protecting children from a prior marriage.
3. It is prepared, in theory, when there is harmony instead of at a point when the relationship is very contentious.
4. The parties can negotiate the terms of the agreement; instead of having a third party (a judge) and state and provincial laws decide how to divide the couple’s assets.

Challenging a Prenuptial Agreement

If you’re going to have a prenuptial agreement, you should each hire a lawyer to ensure that it is valid and will hold up in court. Do not try to prepare one yourselves! Steven Spielberg and Amy Irving allegedly drafted their prenuptial agreement on the back of a napkin; the court did not recognize it as a valid contract, and it has been reported that Irving received over $100 million in assets after their four-year marriage ended.

A prenuptial agreement can be successfully challenged in the following ways:

1. If it has not been signed. Most states require the prenuptial agreement to be signed by the party to be charged with the agreement.
2. By proving the other party did not fully disclose their assets.
3. By proving that you were not represented by independent counsel. Each party should be represented by his or her own attorney. Generally, this alone will not be sufficient to invalidate the agreement.
4. By proving that the agreement was unconscionable when it was signed.
5. By proving that the agreement is now unconscionable based on today’s circumstances.
6. The agreement can be challenged based on duress, due to the timing of the signing.
7. It can be challenged on any other typical contractual theory such as fraud, misrepresentation, or coercion.

Additional Issues to Consider

Each spouse should draft their estate plans so that they conform to the terms in the prenuptial agreement. You do not want to force your children and surviving spouse to get involved in litigation involving your estate. The costs could result in everyone getting significantly less.

You may also want to consider using life insurance to replace assets that go to either your children or your spouse. For example: Mike and Carol purchased a new home with the proceeds from the sale of Mike’s previous home. Mike wants Carol to have the home upon his death. He can purchase insurance, naming his sons as beneficiaries, to replace the proceeds from the sale of his previous home.

Prenuptial agreements can be amended or revoked at any time. Some couples add a sunset provision terminating the agreement after a certain period of time, such as ten years.

Case Study: Sarah and Brad

Sarah has a technology business that she thinks is worth approximately $1,000,000. In 2003, it had gross sales of approximately $750,000 with profits of approximately $300,000 (including Sarah’s compensation). The income has steadily increased at about 20% annually. She is about to marry Brad. This will be the first marriage for both of them, and neither of them have children. Brad’s net worth is approximately $50,000 and his annual income is approximately $40,000 and increases at about 3% per year. Should Sarah have Brad sign a prenuptial agreement to protect her business?

If Sarah wants to protect her business and its future growth, then she should have Brad sign a prenuptial agreement. Otherwise, any future increase in the value of the business during the marriage would likely be split between both parties. Without a prenup in place, if Brad sometimes helped Sarah with the business, then a judge may find that the business is a marital asset and split the business. Sarah must hire an expert to perform a business valuation; better still, she and Brad could jointly decide on the expert that will perform the valuation, or each of them could hire their own expert and then average the two valuations. If this is done, then Brad would have a difficult time challenging the value of the business.

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Nancy Kurn (CPA, JD, LLM, MBA, CDFA) is the director of Educational Services for the Institute for Divorce Financial Analysts.

by Joseph Warren Kniskern

Regardless of which attorney you select, you must understand fee arrangements and be aware of how to keep your legal costs reasonable.

Negotiating Fee Arrangements

How fees are set. Attorneys’ fees are often negotiable, although most experienced lawyers do not want to lower their fees. Most lawyers set their rates based upon these factors: time, labor, novelty, the difficulty of the legal issues involved, and the legal skills necessary to work the case properly; the likelihood that acceptance of the case will prevent other employment, either because of time or conflicts of interest; the customary fees usually charged in the area for similar legal services; the amount involved and results obtained; the time limitations imposed by the client or circumstances; the nature and length of the professional relationship with the client; the experience, reputation, and ability of the lawyer performing the services; and overhead (library costs, secretarial help, office rent, and costs of equipment, etc.). The lawyer will be very familiar with what can and cannot be done in setting a reasonable fee for your case. Even so, negotiate for lower fees. Above all, make sure fees are in line with what other local lawyers charge for doing the same type of work.

Most attorneys realize that the practice of law is no longer just a service profession but is also a business. No one can ignore business considerations and practice for very long. Therefore, many attorneys are diligent in advising their clients up-front what they charge. You should expect regular bills during the case, as well as a collection system for late payments.

Types of fee arrangements. There are three traditional methods for setting fees: fixed fees; hourly rates for work of uncertain duration; and contingency fees (a percentage of whatever a lawyer wins for the client).

Fixed fees are unusual in litigation cases because no one can reasonably foresee when and how the case will end. Although fixed fee arrangements may force the lawyer to work more efficiently and prevent misunderstandings about the final bill, lawyers know that clients can take advantage of them by excessive calls and conferences. Consequently, the lawyer may lose interest in the case and assign it a low priority.

Contingency fee arrangements in dissolution of marriage cases are illegal in most states. Such arrangements create many conflicts of interest at the expense of shattered marriages and broken lives. Therefore, you should expect your lawyer to charge a negotiated hourly rate for your case.

Retainers. Many lawyers want an advance retainer or deposit against your fees and costs. You should receive full credit for this retainer against your legal expenses. Negotiate now for a refund of all unearned portions of the retainer when your lawyer’s representation ends.

Legal representation agreements. Fee and representation requirements are usually written into an agreement or letter signed by you and your lawyer. Carefully read this agreement. It will control how you and your attorney work together in handling your case. If you have any questions or concerns about the lawyer or the work involved, have your understanding written into your agreement. These agreements help avoid misunderstandings and assure effective communication about mutual expectations.

Billing statements. You have a right to know about work completed on your behalf in enough detail to be sure that fees are reasonable and comply with your fee agreement. If you do not ask for a detailed bill, many attorneys will simply send a short, one-page statement that states “For Services Rendered” and list a lump sum fee due. This saves time for the attorney, but even the most honest of lawyers can make mistakes in figuring fees. Without a detailed bill, you cannot correct those errors. Therefore, always ask for a statement with a daily accounting of tasks performed, hours per task, individuals who did the work, and the hourly rate for each.

In examining your fee statement, be aware of a few overbilling problems like these: overuse of conferences among lawyers in the same office about your case; repeatedly passing your file on to new lawyers who will bill you for reviewing your case; overstaffing your case by having more than one person attend hearings and depositions; over-researching issues and padding legal research hours; charging a high hourly rate for existing computerized form documents usable in many cases; charging for services at improper rates such as billing secretaries as paralegals, paralegals as lawyers, and lawyers not yet admitted to the bar as admitted lawyers; billing for work product that cannot be produced to you; markups on fixed costs such as computerized legal research, photocopying and facsimile charges, meals, and airline tickets; and summarizing depositions to an unwarranted degree. If you prohibit these matters in your fee agreement, you avoid many expensive misunderstandings during your case.

Billing frequency. Most lawyers bill on a monthly cycle under the theory that regular billing helps assure regular payment. It also reduces your shock in receiving one enormous bill at the end of your case. However, billing at the end makes it easier to talk to your lawyer about adjusting the bill if the result is worse than expected due to decisions he or she made.

Payment of fees. Most lawyers have a precise system for collection of fees. After 30 days, the lawyer may send out a second statement. A letter follows after 45 days, with a personal telephone call after 60 days. Slow-paying accounts receive low priority for the lawyer’s time if other clients pay promptly. Also, although lawyers do not like to arbitrate or litigate fees with clients, they will do so if the potential loss is large enough to warrant it. Be wise and promptly pay your bills within 30 days. Your lawyer will appreciate you as a client and work harder for you.

How to Cut Your Legal Fees and Costs

Developing a strategy and budget. Many variables are difficult to control in a divorce, such as whether your spouse and opposing attorney will settle, fight discovery, or use delay tactics. Developing a strategy and budget for your case — and updating it before major hearings or conferences — will provide you and your attorney with a clear understanding of the proper level and limits of the work.

Try to set a maximum fee cap on the case that should not be exceeded without prior written approval. This helps you monitor expenses and avoid surprises in your final bills.

Your lawyer should watch fees and expenses to make sure you are billed fairly under your fee agreement. Before your budget for legal expenses in any phase is exceeded, you should be notified promptly so that you can decide whether to revise your budget or modify the strategy. Then you can give your prior written approval of the excess amount.

Encourage your lawyer always to be alert for a creative or less expensive way to proceed — even if the work is within your budget — and to discuss these matters with you promptly. Above all, in developing a strategy and budget, use a laser rather than a shotgun in addressing your issues and problems. Be precise and efficient.

Cost limitations. Ask your lawyer to be sensitive to the costs of multiple representation at meetings and hearings, high staffing levels, rotating persons onto matters with which they are unfamiliar, and training young lawyers on your case.

Since your lawyer can handle most of your case in the office, the need for overnight travel is slight. However, if out-of-town travel is necessary, have your lawyer agree that only one attorney should travel; expenses for lodging, restaurants, or transportation should not be extravagant; and charges for airfare should be at the coach rate only.

If you require extra or unnecessary legal work, such as excessive telephone calls or conferences or filing unwarranted court pleadings, you should expect to pay for these. Similarly, your lawyer should agree that if work completed is not budgeted or approved, is not properly done, or requires correction, you will not be billed. Find out what your lawyer’s minimum billing increment is. Lawyers often charge in tenths or quarters of an hour. If you are charged a quarter-hour for a two-minute phone call, prepare for this call and use the full fifteen minutes to your benefit.

Does your attorney double-bill you and other clients for work benefiting everyone? If so, object to this and work out a fair fee allocation.

Assist your lawyer in finding documents or information to lower your legal expense. Offer to locate witnesses, secure property appraisals, and copy lengthy documents at discount copy centers.

Develop a friendly working relationship with your lawyer’s secretary. You will receive information about your case at no additional cost, since time for secretaries is not usually billed to clients and they are quite familiar with cases. Happy secretaries will also work to keep your case a priority.

Hourly rates almost always include your lawyer’s overhead, which should not be added separately onto your bill. Reimbursement of expenses to third-party suppliers should be at documented, actual cost.

Unless agreed upon in advance and in writing with your lawyer, try to avoid or limit paying for these costs:

• Administrative time by the attorney;
• Secretarial overtime, unless it is a legitimate emergency for your case alone;
• Time spent preparing bills and discussing billing matters with you;
• Photocopies made internally in excess of a good faith estimate of actual cost;
• Internal office messenger expense in excess of the cost of comparable outside services;
• Meal costs, except for a reasonable cost if a matter necessary to advance your case must be discussed with an outside party during the meal;
• Auto mileage in excess of a reasonable cost per mile (AAA rates or IRS allowances).

Communication. When you meet or talk with your lawyer, be prompt. Organize papers and have information ready with a list of carefully thought-out matters you need to discuss. Avoid deluging your lawyer with information unless it is requested. Always listen carefully to your lawyer’s advice. Promptly follow the instructions carefully.

Tell your lawyer you do not want “surprises”. As the expert, your attorney should expect and warn you in advance of matters that may affect you or your case so that you can properly prepare yourself.

Make sure your lawyer does not negotiate away any of your rights or give away any personal information without your prior written approval.

Tell your lawyer that you will not call unless you have an important legal concern. (Remember, you are not your lawyer’s only client.) Your attorney should return telephone calls within 24 hours unless he or she is out of town or reasonably indisposed.

Keep your case files up-to-date. Ask your lawyer to copy for you significant memoranda or pleadings prepared on your behalf so that you can monitor your case progress. This also allows you to stop any activities that may be too expensive or overly combative with the other side.

Encourage your lawyer to alert you to anything you do that interferes with your case. Similarly, advise your lawyer that you want to discuss any of your concerns directly with him or her as well.

If your questions cannot be answered within 15 minutes by telephone, write your attorney a letter. This will give him or her time to focus on your needs and give you a more thoughtful response. Letters allow you to share more information with your lawyer in a shorter period of time while also documenting your concerns. Always keep a copy of your letter for your files. Use it as a checklist when your lawyer responds.

Disagreements and termination of representation. If you have any disagreements with your lawyer, discuss problems directly without delay.

If you and your lawyer cannot agree on a fair settlement of the dispute, your attorney should agree to promptly secure court approval to withdraw so you can secure alternate counsel without jeopardizing your case.

Pay your first lawyer a reasonable fee to the date you change lawyers. To avoid disputes about fees in this instance, have your lawyer agree in advance to arbitration or mediation of the dispute. If this is not available, then you and your attorney can pursue whatever legal remedies are available.

If your lawyer has violated rules of professional conduct (such as missing filing deadlines or misappropriating trust account funds), you should consider filing a formal complaint with your state bar association. This association also may have a client security fund to reimburse you if your funds or property have been embezzled by your lawyer.

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Joseph Warren Kniskern is an attorney in Raleigh, North Carolina with more than 32 years of experience, who has been cited in Who’s Who in American Law. This article has been edited and excerpted with permission from When the Vow Breaks: A Survival and Recovery Guide for Christians Facing Divorce (B&H Publishing Group, revised edition copyright @ 2008).

The Law Offices of Donald Schweitzer provides a full spectrum of family law services ranging from the uncontested to the complex. We are dedicated to providing an unparalleled combination of depth of experience and quality of service. We represent our clients aggressively within the framework of the highest level of integrity, professionalism and ethics.