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Are You Average?

How much is your case expected to contribute to a firm’s cash flow?  In a previous blog, Financial Bedlam, I introduced you to Tim and Kathy, an average couple with ordinary problems, who got an ordinary divorce.  It was just “average.” It wasn’t the best divorce or the worst, not the cheapest nor most expensive, not the longest or shortest — just average.  And that “average” divorce cost them over half of their net worth.  They were “average” consumers of legal services.  They went blindly into a lawyer’s office, wearing their emotional divorce on their sleeve and with no financial strategy in mind. Tim prided himself on being a good business man, but his impatience got the better of him and he hired his attorney based on the advice of a friend of a friend.  Tim didn’t find out until later that the attorney had no actual business experience and he failed to provide her with incentives to resolve the divorce quickly.  Tim’s attorney provided a list of the recent trials she had participated in, but didn’t give Tim any information about alternative dispute resolution.  The attorney proudly walked Tim around the law firm, pointing out original works of art, beautifully decorated offices and conference rooms with “million dollar views” of the city, state of the art technology, staff lounge, and an army of legal assistants.  The question Tim might have well asked is, “How much of this overhead cost do you want from me?” Kathy was an emotional wreck when she first met with her attorney, a man reputed to be a real “junk yard dog”  who could bring Tim into line.   They didn’t discuss fees except in abstract terms, but...

Avoiding Financial Bedlam

In my last blog, I asked you to think about a question: Am I willing to turn over a significant percentage of my net worth in order to be divorced? Since you’re back to read more, I’m guessing you answered NO to that question and you’re ready to Avoid Financial Bedlam.  Here are a few ways to keep more of your cash when you’re getting divorced. Avoid litigation.  In my last blog, I introduced you to Tim and Kathy.  Even though they eventually reached settlement in their divorce, the path they took was pure litigation.  Their attorneys wrote rough letters and held long blustery phone conferences where nothing much was accomplished other than defending their clients’ polarized positions.  They filed motions and went to hearings, they argued over dishes and debts, they over-involved the children in their fights, and they both did so with the conviction that they were “right” and would have their “day in Court.”  They didn’t sit down at the settlement table until they were over a year into the process.  This is a sure path to Financial Bedlam. Reduce conflict.  Remember, Conflict = $$$.  The more conflict your attorney can create, the more money he/she will earn.  The more conflict you or your spouse create, the more money you will each pay to your attorneys to “resolve” your conflict.  If you solve your own problems, like responsible adults should, then you will reduce conflict and save money.  Make no mistake, even if it’s “the other side” causing the conflict, you’ll still be paying to put out the fires. Create a budget.  Tim and Kathy never budgeted their...

Financial Bedlam

Financial Bedlam.  That’s how one client described his divorce. Like many people seeking a divorce, “Tim” just wanted a short and simple divorce without a lot of fighting over “things.”  (No, it’s not really Tim. See Disclaimer.)  Tim, a small business owner, has the “entrepreneurial temperament,” which means that he is used to getting what he wants, when he wants it.  Divorce was no different, so Tim did a lot of pushing.  After all, he was being “fair” and his wife just needed to see his side of things. For “Kathy” (see Disclaimer), Tim’s wife of 17 years, divorce was not at all simple or easy.  At first, Kathy was devastated and in denial.  She was terrified of being on her own, grief-stricken that Tim would break up their family, and outraged that Tim had announced the divorce to her “out of the blue.”  Kathy felt that she was at battle with an unseen force (maybe another woman?), so she gathered the “troops” — her girlfriends, family, teachers at the children’s school, hair stylist, and anyone else who would listen — to let them know how Tim had failed the family.  Kathy got the validation she was seeking and many of those “troops” advised her to take Tim to the cleaners to teach him a lesson.  Their advice was well-intentioned, but the worst possible thing they could have said. So Kathy and Tim engaged the “best” lawyers they could afford.  Tim’s attorney made settlement offers, demands, threats, and filed motions, pushing Kathy and her lawyer to accept Tim’s offers “within 24 hours or else.”  Kathy dug in her heels and her attorney,...