Many people are surprised by the high cost of legal services when they go through separation and divorce. It is not unusual to spend tens of thousands of dollars to have issues resolved even in an “amicable divorce”. Here are some of the reasons.
First, in most cases, people have many issues to resolve:
1) The children:
a) What is the parenting plan going to look like? Is he or she entitled to see the children as often as they wish? Why?
b) What about the fact that the children don’t want to see their mother/father?
c) What about that new partner? How can the children be seeing him or her?
d) What if things change over time?
e) What happens if we don’t agree on the parenting plan and what it should look like?
2) Child support:
a) What is the income of the paying parent?
b) What is the income of the recipient parent?
c) What are Section 7 expenses?
d) What if we share the children 50% of the time? What how do I calculate 50% of the time?
3) Property division:
a) What do you mean I don’t get half?
b) Equalization, how does that work?
c) Why do I have to get assets like my pension or my small business valued?
d) Do I need other experts to value by property?
4) Spousal support:
a) The Spousal Support Advisory Guidelines – how do they work?
b) Income determination – same problem as in child support – what’s the income?
So even in relatively “simple cases”, figuring out what you are entitled to or are obligated to pay is not a simple task. Financial issues can take a lot of time to resolve.
Figuring out what to do with children is probably the toughest issue facing most people. In some cases, parents are able to come to a quick agreement. But if the emotions are running high due to the way in which the separation occurred, judgment is often clouded and it is very difficult for spouses to focus on the needs of their children, because their own needs are coming first. Conflicts over the children are the most time intensive and therefore costly part of a lawyer’s job. Facts are always in conflict – each parent tries to paint the other as a “poor parent” who does not have the ability to address the needs of the children. When facts are in conflict, it is always necessary to conduct lengthy interviews of third parties who are potentially neutral third party witnesses to historic events that need to be proven in court. It is also often necessary to retain an expert in child development to assist either by mediating or by assessing the family. Courts insist on neutral evidence like this in order to make a proper decision about the best interests of the children if a trial is necessary to resolve the parenting issues. Child custody cases typically cost well over $50,000 just in legal fees if they go to trial. While this is perhaps more than the cost of your automobile (depending on the make), it is certainly a lot of money to spend which often the family coming out of a separation simply does not have.
Determining income in this day and age is difficult. Many people are self employed “contractors” who earn their money through their own businesses. Income determines how much child and spousal support you need to pay or receive. Many people work over time or are entitled to bonuses. Figuring all of this out is never an easy cut and dried task, primarily because people are frightened about their financial future and need to be careful about how much income they declare or how much money they can get from their spouse. Often the trauma of the separation and the emotion make people behave in ways they would normally not – hiding their assets or understating their income. The lawyer’s job is to figure out what the real numbers are and make recommendations on facts. Discovering the facts about income often takes a great deal of time. It also usually involves hiring another expert, like a chartered accountant who is skilled in family law issues. This necessarily adds to the cost of the case. But it is necessary in order to present the case properly and to arrive at a proper result.
Determining your property rights can also create a myriad of issues. Each side needs to establish their “net family property” (please see previous blogs for what that entails). In general terms, married couples who separate are entitled to share all of the wealth that the couple generated themselves during the marriage. Figuring out what that is takes time, and often involves valuation experts at additional cost.
Added to the complexity of the legal issues is the process itself. If you have ever been in Family Court, you know that there are The Family Law Rules which must be followed. Just completing the paperwork is a time consuming and therefore expensive process. The financial statement which must be filed must be accurate and it must be supported by documents or valuation opinions. Properly completing this form so that it is satisfactory to the court and in compliance with the rules can all by itself cost several thousands of dollars, depending on the complexity of the property issues.
The rules require that procedure must be followed. For sound philosophical reasons, each case that is in court is supposed to be managed by one Judge. Nothing can happen in a case until you have had a case conference. You must also have a settlement conference and then a Trial Management Conference. The purpose of all these conferences is to encourage a settlement of the case without a trial. However, they all add to the cost of your case because the lawyer has to prepare paperwork for each and your financial statement has to be updated as well if it is more than 30 days old. Nothing ‘substantive’ happens at these conferences unless the spouses come to an agreement. Often agreements are reached with the assistance of the presiding judge but these agreements are usually not a complete resolution of the entire case. If the case has to go to a trial, it usually goes on a list with many other cases and you have to wait your turn as the case moves up the list. You really can never be guaranteed a trial date in our court system. But your lawyer has to be ready for trial just in case it does get reached when it’s on a list. Marshaling the evidence properly so it can be readily and easily presented to the trial Judge is a very time consuming and therefore expensive task. Most family law trials take at a minimum three days to try often taking much longer if there are many issues. By the time all of the steps are taken to get through the family court system and by the time the trial is over, the cost is usually close to or exceeding $100,000 for the normal middle class family with children and the usual income and assets. In other words, the ‘system’ adds to the cost but it is a ‘necessary system’.
If both parties can keep their emotions under control, retain a lawyer who is experienced in family law matters and then listen to their lawyer’s advice, use mediation or arbitration to resolve those difficult issues that can’t be agreed upon, or, in other words, if they can stay out of court, a much less expensive resolution can be obtained. Both sides have to
a) be honest with each other about their parenting roles and what’s best for their children,
b) keep the focus on a resolution of the parenting issues, not a “win in court” at the expense of the children,
c) fully disclose their financial information without having to be repeatedly asked,
d) want to get their matter resolved in accordance with the law or accept financial responsibility for the breakdown of the relationship,
e) be prepared to compromise, and
f) be willing to do a lot of the work themselves.
There are no easy answers to the question of why legal fees are so high. There are many factors outlined above – the complexity of the law itself, the system in place to resolve the issues, the time it takes to organize and understand those issues and to prepare for a trial.
On the other hand, a lot has to do with the manner in which the parties themselves want to get their issues resolved. A lawyer has no choice but to follow their client’s proper instructions, and if the client wants to take a matter to trial that should be settled in some other manner, then the lawyer really has no choice but to take the matter to trial. A good lawyer will make the client well aware of the potential outcome, the risks involved and the cost of taking that kind of approach to their case. But even good lawyers have to take a case to trial when it is against their better judgment to do so. The client has a lot to do with keeping his or her legal costs down. A good lawyer will encourage this strategy and not encourage the client to take an adversarial approach. A good lawyer only goes to trial when the other side presents no alternative. Two good lawyers acting in the best interests of their clients only go to trial when there is some very honest difference of opinion on the potential outcome of the case. Most good family law lawyers settle their cases without a trial.