Costs in Divorce
One of the first questions people ask about divorce is how much it will cost. I get it, and I’ve been in your shoes. When I know (or suspect) that something will be fairly expensive, I want to know, before I get too far along, how much I can reasonably expect to pay. Knowing that helps me know whether I can set my heart on having something, or whether I need to steer myself in another direction because it’s totally outside the realm of possibility.
Divorce is expensive. Right? I mean, we’ve always heard that. But…”expensive” can mean different things to different people. What does expensive mean to you? Can you afford to hire an attorney?
People get confused when it comes to costs in a case, and it can be hard to compare one attorney against another when it comes to the total overall costs. It’s super tricky, especially to the untrained eye.
How can you tell one attorney from another? How do you know whether one is more expensive than another? You get a number of different pieces of information (retainer, hourly rate, minimum security deposit)…but what does it all mean? Is there even a difference?
In a word — yes. There is a wide range of fees associated with hiring an attorney, and they can definitely run the gamut. Some are more or less expensive than others. (Then again, some are more or less experienced than others!) That’s not to say that you can’t find a bargain, if that’s what you’re looking for, but, generally speaking, hiring an attorney is not a clearance rack kind of proposition. For the most part, attorney fees correspond pretty closely to the experience and reputation of the attorney in question.
In family law cases, most attorneys charge a retainer to take on a case. A retainer fee is an amount of money required to take on a case. In a case where a retainer fee is paid, the money goes into a trust account (or an escrow account, whatever you want to call it) with your name on it. The money is still yours, and its refundable to you, until work is done on your case. As work is done, the money is earned by the firm, and it’s transferred from the escrow account to the firm’s general management account.
Money is refundable, so if you and your husband reconcile or reach a settlement early, the money is refundable to you. Likewise, if you decide to hire a new attorney, or just fire your attorney to represent yourself (not generally recommended, but it happens), it’s refundable.
A contingency fee is one where an attorney takes a case predicated on his or her ability to take a certain percentage of the recovery at the end of the case.
We often see cases like this in personal injury cases; there’s “no fee unless we win” kind of thing. In exchange for taking the case on, a person promises to pay the attorney 30-40% of the total overall recovery.
In Virginia, it is considered unethical for an attorney in a family law case to take a case on a contingency fee basis. Even if you’re going to receive a large chunk of a bank account, retirement account, the sale of the marital home, or spousal support, the attorney can’t take your case on a contingency fee.
As a result, in most cases, you’ll see family law attorneys charging for initial consultations, and taking cases on retainers.
Attorney hourly rates
Probably the best barometer of total overall costs in a family law case is the attorney’s hourly rate. Though it’s pretty obvious that a retainer agreement can make the difference between an an attorney you can afford to hire and one you cant, it’s really the hourly rate that will tell you more about what the case might reasonably cost.
Obviously, if an attorney charges a million dollar retainer, even if the money left over in trust is refundable to you, that’s not going to be very affordable. But I would encourage you to think more along the lines of what an attorney’s hourly rate is over what the retainer fee is. Since the retainer fee is refundable, it’s not an estimate of total overall costs–really, the retainer fee itself doesn’t actually mean anything at all.
An attorney’s hourly rate, though, is relevant. And it is going to have a relationship to the total overall costs of your case. In fact, I think it’d be pretty silly to make a decision regarding an attorney without considering costs from an attorney hourly rate perspective.
Attorney’s hourly rates can vary pretty dramatically, so it’s an important question to ask.
For more information, or to get additional information about costs in your case, give our office a call at (757) 425-5200.