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Mediation: Two Views

This month I worked with two very different couples in two very different mediations, and it occurred to me that if you are in the divorce process, you know nothing of other clients’ experiences, which might be helpful in making a decision about mediation. Here’s the back story:  Couple A (let’s call them Anne and Arturo) and Couple B (Ben and Barb) have more than a few things in common.  They are all working professionals, but at different levels of pay.  Both couples have one young child (Abby and Boris).  They both have moderate debt and assets.  They are all smart and capable, and they all want a divorce that preserves their sanity, resources, and relationship as co-parents of their children.  And both couples chose mediation as the vehicle for settling their divorce. Anne and Arturo have a very communicative relationship, even now, in the midst of divorce.  They share equal time with Abby and talk about her to each other all the time.  Anne tends to be more outgoing and decisive, while Arturo is more quiet and contemplative.  They have been working through their issues in mediation two hours at a time for several months.  We are almost at resolution, with only a few details left to hammer out, and Anne and Arturo both needed this time to fully process and absorb the agreements they were making.  They have thoroughly reviewed their settlement documents at least three times, and are giving them a final review before signing.  Anne and Arturo have repeatedly told me how much they appreciate the fact that we never rush or pressure them to agree to anything they don’t understand or...

How to Choose A Divorce Attorney

My cousin (who is also an attorney, but not in Arizona and not in family law) sent me a message a few days ago, on behalf of her friend who is getting divorced.  Jana’s question was, “how does Amy choose a divorce attorney and what questions should she be asking?”   By the time I was finished with the email, I realized that there are probably lots of “Amy” people in the world (both men and women) who are bewildered, confused, scared, and stressed, but still need to make a smart decision.  Here’s what I told Amy ~ First, you should decide what kind of divorce you want: do-it-yourself with legal consulting and/or drafting of documents, mediation, arbitration, Collaborative Divorce, negotiated settlement, or litigation. Those are listed in order of expense from under $2,000 to $50,000 and up.  There’s more information on our Services page that describes these options.  This is probably the most critical step in the process, because not all attorneys are suited to all types of divorce. Then, when you have decided what kind of divorce you want, you should call several therapists and NON-family law firms and ask for a referral to a family law attorney for (i.e.) mediation. If you get the same name twice, you’ll know that the person is at least somewhat respected by their peers. I don’t recommend asking friends for a referral because most people who get a divorce either think their attorney was the best or worst that ever lived with no frame of reference other than their own divorce. Now that you have an idea of what kind of divorce you want and have a list of attorneys to call, you should get...

Sell, Hold, Short Sell, Foreclose?

Oh my, we are in a pickle here in Arizona.  Our real estate bubble burst with a bang and left many homeowners under water and holding real estate — and debt — without equity.  We’re not alone in that dilemma, but we are one of the hardest hit areas of the country and are regularly featured in national news stories about the mortgage lending and foreclosure crisis. If you are living in an upside down house, love it beyond reason, and intend to stay there the rest of your life, then it’s probably a good idea to hang onto it.  However, if you’re in the midst of a divorce or break up and one salary won’t cover the carrying costs, you are probably having a very different conversation.  And that conversation can be making you anxious, stressed, depressed, sad, angry, resentful, or all of the above!  While there are many opinions and theories about what you “should” do or “should not” do regarding underwater real estate, in the final analysis, it is a very personal financial decision.  It is not (or should not be) an emotional decision.  Houses are investments, in the form of real property, that you and/or your marital community made.  The investment is neither good nor bad.  The return on investment, however, has made millionaires of some and bankrupted many thousands more. Clients ask me all the time, “Should we sell, hold, short sell, or foreclose?”  While I don’t pretend to have all the answers to every issue that one simple question implies, I do have two answers.  One, please call on a professional to assist you in evaluating the issue.  I recommend...

Flat Fees Are Finally Here!

Billable Hours Lawyers are taught at the outset of our careers that the Billable Hour rules the world.  Coming from the business community, I always found the billing practices of law firms to be rather odd.  In most other service industries, the customer obtains a quote or bid or scope of work that outlines what you will pay for the work you want done.  Law firms (as well as accounting, and some other professions), on the other hand, almost always operate on an open-ended contract that often brings a frightful surprise to clients at the end of the month.  A common analogy is taking your car to the garage for repair and the mechanic informs you that he might be able to fix your car, but he’s not sure how long it will take and can only tell you what it will cost when he’s finished fixing it.  Another good comparison is hiring someone to paint your house by the hour.  Either way, an open-ended hourly system of billing invites inefficiencies and does not serve our clients as well as we should. Variable Costs of Litigation Legal fees can vary greatly from firm to firm and can increase exponentially with even a little bit of conflict between the parties.  It’s been very difficult for the Family Law bar to adopt flat fees because of the moving target of litigation.  For example, given two cases that have almost identical fact patterns, assets, and liabilities, Case A’s litigated divorce will cost around $30,000 each and Case B”s litigated divorce will cost in excess of $150,000 each.   And it’s hard to know, in advance, which case an attorney might...

Are You Above Average?

Are you Above Average?  You might think so, but you’re probably not when it comes to divorce. Becoming Above Average is not nearly as hard as it sounds.  When it comes to family law matters, you don’t have to have a low percent of body fat, high IQ, big bank account or a lot of letters behind your name to be Above Average.  All you need is a little bit of knowledge and the will to use it.  In this blog series, I’ve introduced you to Tim and Kathy, a fictional couple who represent the Average Divorce.  They spent more than half their net worth and two and a half years of their lives litigating their divorce.  They depleted their savings, their available credit, and their health.  Their kids went through a traumatic custody evaluation and the family business is facing bankruptcy.  They are the poster couple for the Average Divorce.  If you don’t believe me, just ask around! So how do you avoid falling into the Average Divorce trap?  How do you become Above Average?  Here are a few ideas: Know Yourself:  Investing in some therapy will help you know yourself better, learn what your weaknesses are, and understand how to  communicate with your spouse around issues of co-parenting and finances. Know Your Money:  Engaging an independent divorce financial planner can save you and your spouse hundreds (even thousands) of dollars in legal fees, lost opportunity, and taxes. Know Your Kids:  Hiring a child specialist to help you understand your children’s developmental needs is less expensive and invasive than a custody evaluation, but can provide valuable insight into what’s best for the...

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...