It’s hard to pay for a divorce. It’s really hard. It’s pretty expensive and, besides that fact, there’s all the other transitions and changes which, let’s face it, cost money, too. It’s hard to juggle it all, and certainly hard to afford it all. How do you pay for an attorney—plus begin to separate both of your lives? If one of you is planning on moving out, you’ll need a down payment for a new house or a security deposit and first and last month’s rent. Not only that, but you’ll have to divide your things, so you’ll probably need some new kitchen stuff, linens, bath towels—you know, the works. Plus, you’ll have two separate bills now where you used to have one—for electric, water, cable and internet, whatever.
Of course, these days, lots of people choose to live separate and apart in the same house, just to save on expenses—but you know that permanent physical separation is coming—so it’s not like you’re on a spending free for all. (LINK about separation under the same roof) Most people, whether they separate right away or stay together temporarily with the plan to separate at some later date, are very concerned about money and not too inclined to spend thousands on an attorney right away. Sure, they recognize the need for an attorney, but it’s still pretty scary. (After all, it would be nice to know that you had someone on your side, in your corner, advocating for your best interests in all of this, right?)
A lot of women ask us whether they can hire us now—and just pay us out of their settlement. (Or their tax return. Or an inheritance that’s just about to come through, but hasn’t quite yet.) Whatever it is, most women can foresee a time, in the future, when they COULD pay for attorney fees—they just know, with certainty, that the time is not quite right this minute. Most wonder whether we can take their case now, and just get paid later.
Unfortunately, that’s not the case. For a whole lot of reasons, but, mostly, because it’s an ethical problem for us.
You’re probably wondering why. You see ads all the time for attorneys advertising things like how they won’t charge a fee unless they win for you. They don’t get paid if you don’t get paid. Why are we so different?
Well, those attorneys are personal injury attorneys, and the standards are different. It may not seem any different to you—after all, an attorney is an attorney—but there are a lot of rules that apply to family law attorneys that don’t apply to personal injury attorneys. It doesn’t seem like there should be any difference, but there is.
Family law attorneys look at cases differently—and they’re paid for them differently. Personal injury attorneys aren’t paid by their clients; they’re paid by insurance companies. Personal injury attorneys are looking for the case with the million dollar payout. (Or, you know, several million dollars.) Our cases just aren’t like that. There aren’t million dollar payouts, unless there were millions of dollars already existing in the marriage.
So, obviously, the mechanics of the case are a little different, but we’re also limited by the ethical rules. Because it’s not insurance companies who pay our bills (our clients pay our bills!), things are a little different. Ethically, that makes things different. Why? Well, we can’t charge a portion of the client’s settlement the same way a personal injury attorney can. We can’t say that our fee is 30% (or 40%, if we go to trial!) of whatever we recover for the client. It just doesn’t work that way.
If you think about it, it makes sense. In a personal injury case, the settlement is money that the client wouldn’t have had otherwise. In a divorce case, the settlement is the client’s money anyway. It always was, it was just comingled with husband’s money. So it’s different to take 30% of what a client has (of, in fact, EVERYTHING she has left) than it is to take 30% of a personal injury settlement. Because of that, it’s considered unethical.
It’s not that we don’t want to take your case and get paid for it later; it’s mostly that we aren’t allowed. And, no offense, but no family law attorney is going to risk disciplinary action just to take a case on a contingent fee. We could get disbarred for that!
So, how DO family law attorneys handle fees?
Family law attorneys take cases on retainer, and bill hourly.
A retainer is an amount of money that is paid up front. It’s not our money; it’s your money. We put it in an escrow account, and it’s your money until we spend it. We don’t spend it until we do the work. When we do work, we bill for it. We bill hourly. Each attorney has a different hourly rate according to his or her level of experience.
So, as something happens in your case, we do the work, bill for it, and take the money from your separate, escrow account and put it in the firm’s operating account. Whatever is left over in your account at the end of the case is yours, and it will be refunded to you.
So, is a retainer a flat fee?
No. A retainer is more like a deposit. When attorneys take a case, they do so with a retainer agreement. A retainer agreement is, basically, a legal contract that sets forth how your case will be handled by the law firm. In the retainer agreement, most law firms set forth a retainer that would be necessary to take your case, plus a minimum security deposit that should remain in your escrow account at all times.
Once your retainer amount has been spent, you just have to keep your account at the level specified in the retainer agreement. So, theoretically, at the end of your case you should always be refunded money—at least the amount of the minimum security balance required by your retainer agreement. (Of course, in practice, we often let the balance dwindle a little bit at the end of a case when we know there’s enough money left in trust to cover the expenses in the case.)
It’s not a flat fee. Very few family law attorneys handle cases on flat fees.
Fees are fairly straightforward in family law cases. The nice thing is that it’s easy to see what your attorney is costing you—rather than wondering, later on, how much you’ll be charged (like in a personal injury case).
At Hofheimer Family Law, we are very conscious about how we spend our client’s money. I know it sounds like a lot, and it’s a pretty scary thing, but our chief concern is being the best advocates for our clients. We spend our client’s money carefully, cautiously, and as necessary to make sure that our client’s best interests are protected.
For more information, or to schedule an appointment with one of our licensed and experienced Virginia divorce and custody attorneys, give our office a call at (757) 425-5200.