Attorney Costs in a Separation Agreement Case
It’s scary to hire an attorney. It’s especially scary because you don’t know what to expect. You know it’ll be expensive, but what does that mean? You want to call an attorney to find out what your options are—but you’re also kind of scared. Attorneys don’t really post their rates on their websites, so how do you make sure that you’re not calling a firm that you couldn’t afford? How are attorney costs determined?
I feel the same way sometimes. A good example that jumps to mind, to me, is photographers. One of my biggest pet peeves is when they don’t post their prices online. (Because, let’s face it, they know how much it costs, and I shouldn’t have to call to get information!)
Lawyers aren’t really like that, though. For us, there’s really not a fixed fee—unless, of course, you consider our hourly rates. Most family law attorneys, though, work on retainers, and bill hourly, so the total cost of a case can vary dramatically—and what the retainer fee is doesn’t really have that much to do with how much the case costs overall.
What’s the best way to gauge overall attorney costs in a divorce case?
The best way to compare attorney costs across the board is by looking at their hourly rates. An hourly rate is the amount of money each attorney charges per hour for the work that they do; hourly rates often vary pretty dramatically across law firms, depending on the experience of the attorney in question (and, of course, how pricy they are). In our areas, attorney’s hourly rates vary from about $200 an hour to more than $500; in bigger urban areas, the costs can be even more. (I’ve heard of New York City family law attorneys billing $1000 per hour or more!)
How come you can’t compare attorney costs by looking at retainers?
A retainer isn’t a flat fee in a divorce case; it’s an amount of money, paid up front, for an attorney to take the case. After it’s paid, it’s put into an escrow account with the client’s name on it. It is the client’s money and stays the clients money until work is done. As work is done, fees are billed against the escrow amount. Most attorneys use a retainer agreement to specify a minimum amount that must remain in the account in order to stay in good standing with the firm; once you drop below that point, the attorney’s office asks that you replenish your account.
Since it’s not a flat fee, a retainer agreement doesn’t really mean anything. It’s not really an estimate of how much the attorney thinks the case will cost, either—it’s just that up-front money that must be paid for an attorney to take the case. One attorney might ask for a $3,000 retainer, and another might ask for a $5,000 retainer—but since it’s all your money until work is done, the money in your escrow account really just represents the number of hours of work that the attorney could do on your case. If you case is finished, whatever is in there is refunded to you. So, if you had a $3,000 retainer and your case cost $2,500, you’d get $500 refunded. If you had a $5,000 retainer and your case cost $2,500, you’d get $2,500 refunded—but both cases ultimately cost the same.
Of course, a high retainer fee can be a barrier to retaining because you might not have the funds up front to pay what one attorney asks—but that doesn’t mean that the attorney is more expensive than another. A better way to gauge is definitely by looking at the attorney’s hourly rate. An attorney who bills at $200 an hour will get you far, far more hours for your $3,000 retainer than an attorney who bills at $400 an hour. You should look more at the number of hours you’re purchasing for your retainer—and also the experience of the attorney in question—in making your decision.
Ask. Ask your attorney what her rate is, what her experience is, and whether she’s the attorney in the firm whose experience will cost you the least. Some firms mandate what their attorney’s fees are, others give the attorney a voice in what the fees look like. Ask if someone else is cheaper. Ask what their relevant experience is. Just because you meet with one attorney doesn’t mean you have to hire that attorney if you’re not comfortable with the hourly rate. Don’t be afraid to ask questions and see what your other options are. And don’t be fooled by small differences in hourly rates; after all, a $50 difference per hour matters a lot to you if the attorney has to go to court or attend a settlement conference in your case.
How will my money be spent in a separation agreement case?
It’s a good idea to ask your attorney what to expect in terms of billing, too. It should all be laid out in the retainer agreement, but you can ask your family law attorney, too. How often will you be billed? What are the minimum billing conventions in your office? (Lots of attorneys, our office included, charge a minimum 0.2 for a phone call or email—as you can imagine, this can add up fast! It’s best to be aware so that you can be sure to be mindful of your spending.)
Ask about your type of case, too. What kinds of things can you expect to see on your bill? In a separation agreement case, we see several things pretty consistently. Of course, getting a draft of your separation agreement is pretty important, and that’s usually the first thing we do (unless you’ve retained after receiving a draft agreement from your husband; in that case, we can save the money you would have spent on drafting an agreement, so that’s good). Each attorney handles things a little bit differently. Ask. Do you charge a flat fee for drafting the agreement, or will I pay hourly? How many hours does it normally take you? How many hours do you think it’ll take in my case?
(Obviously, in a case without children where the parties have no retirement, it’s going to be much easier than in a case where there are a bunch of retirement accounts, real estate, and children involved.) What do you charge for revisions? When do you begin to charge for revisions—after we submit the first draft to my husband, or is every single change I make going to cost extra money?
Then, after that point, it’s mostly a question of negotiations. You’ll likely pay for communication to and from your husband, or his attorney, if he’s represented by counsel. You’ll pay for emails and questions and phone calls you make to the attorney, too, throughout the process. But, for the most part, revisions and communication take up the bulk of the billing in many separation agreement cases.
Depending on the situation, too, a four-way settlement conference or a judicial settlement conference might be arranged. At a settlement conference, all of the sides come together to negotiate an agreement on the spot. Of course, we can’t force anyone to reach an agreement; it’s entirely voluntary. But oftentimes it’s more successful than sending letters or emails back and forth, so even though it may seem a little scary to face paying your attorney to negotiate your agreement with you for 3-4 or even 5-6 hours one day, it can often save a lot of money and time in the long run. If you don’t want to do a settlement conference, though, you don’t have to (unless yours is a contested case and the court requires it before setting a trial date—then you’ll have to).
It’s always, always, always best to have an open and honest conversation about costs with your attorney. I know it’s uncomfortable, but your attorney can plan better if you’re open about what your hopes and expectations are, and both of you can make better choices to accomplish specific goals if you’re aware of what they are. Your finances are important in your divorce, and you should be communicating your feelings and your fears. Your attorney has done this before and can handle whatever you throw at her—or maybe you’ve hired the wrong attorney.
For more information, or to schedule an appointment with one of our licensed and experienced Virginia separation agreement attorneys, give our office a call at (757) 425-5200.