Success in Your Divorce is Driven by the Careful Use of your Budget (Part I)
It’s a marathon, not a sprint. A high-conflict divorce unfolds over time. That means you’ll have to plan wisely for the long haul and manage all your resources – emotions, money, energy and time – to achieve your divorce goals.
The best way to do that is to think about those resources as budget items you need to manage. You’re probably thinking, “Why do I have to manage all this? Shouldn’t my attorney be helping me steer my divorce in the most effective way possible?” The problem with leaving your divorce budget in your attorney’s hands is that he or she can’t generalize about the proper resources to invest. You have a different relationship to your budget than anyone else does to theirs. Only you can decide (ideally before you begin this process) how much time, energy, money and emotion you can devote to your divorce.
Shock and Awe v. Attrition. Many clients come to me facing one of two expensive strategies. The first is “shock and awe,” which aims to break down their will by starting the divorce aggressively, bombarding them with motions, extreme positions, and demands that must be worked out in repeated trips to the courthouse. This may work if you can’t stomach conflict, and your attorney isn’t effective at counseling you through the feeling of overwhelm that “shock and awe” can produce. But it may touch off a long, extremely costly “arms race” in which you decide to retaliate in kind. Shock and awe burns through resources.
So does the second strategy, waging a war of attrition. Here, the tactics involve making life difficult for you and wearing you down. Longstanding arrangements involving such things as travel abroad with a child to visit grandparents, are suddenly challenged, creating a flurry of issues that have to be addressed on top of the divorce itself. So much time and money may go into revisiting these issues and distractions that lawyers’ fees climb while the divorce drags. I have seen lawyers bill for $1,000,000 in attorney fees before trial without even conducting a single deposition! For you, that’s like paying for heart transplant surgery and getting everyone prepped and ready—the hospital, the doctors, even the patient—only to be told there’s no available heart.
Good people at their worst. The reason for all of this concern over budgeting is that divorce litigation puts the parties under extreme emotional pressure, likely to act out instead of acting rationally. In that sense, divorce cases are like criminal cases. The difference is that in criminal law, the court is dealing with generally bad people at their best. But in divorce law, the court is dealing with generally good people at their worst.
You can bring more rationality into the process, and avoid the inefficient use of your budget if you spend your resources only on actions that move you closer to your divorce goal.
In this newsletter, we’ll look at the most volatile half of the divorce budget—emotions and money—to help ensure that you use them most effectively in your high-conflict divorce. (We’ll wrap up with time and energy next time.)
Emotional Expectations about the Divorce Makes Us Needy.
Expectations. When potential clients come in for a consultation, they have usually decided what outcome to expect from the divorce.
If their expectations are positive, they generally believe the divorce will be settled fairly without much fuss. But because of that, they may underestimate the size of the budget necessary to achieve their divorce goals. If they have a negative expectation of their divorce, they may overestimate the size of the budget necessary to achieve their divorce goals. That may make them more inclined to settle, as they generally believe that otherwise, the divorce will only be resolved with a divorce war.
Don’t focus only when putting out fires. I try to persuade clients that they should not have any preconceived idea of how their divorce will go. The future is uncertain, and instead of trying to predict it, it’s more productive to focus your energy on what you can control. With your attorney’s guidance, you can do this by rolling up your sleeves and doing the hard work necessary early in the process, when you are least stressed, have the most energy, and can think best about the strategic aspects of the case. Although you may not enjoy spending time on your divorce unless there is a fire to put out, experience tells me that waiting to prepare will cause costly disruptions in your work and life schedule later on. And of course, your delays will be bread and butter for most attorneys, who can bill needlessly to get things done ASAP!
The goal is to reclaim your life. To help clients think in a constructive way about their divorce, I underline the basic point that they’re in bad marriages that are ruining their lives. The goal of the divorce is to let them to reclaim the life they want to live, and my job is to create a bridge to that life for them, a sane, realistic way forward built on positive attitudes and behavior. This approach works because, as the late business guru Stephen R. Covey put it, “You can’t talk yourself out of a problem that you behaved yourself into.” Early in the divorce process, I explain the stance clients will need to take with a couple of analogies.
“I only have to outrun you.” The first involves a couple camping in the woods. As they are getting ready for bed in their tent, they hear some rustling outside. The wife peeks her head out and sees a bear lumbering toward their campsite. “It's a bear,” she says, pulling on her clothes and running shoes and hustling out of the tent.
“Where are you going?” her husband says. “You can’t outrun a bear!”
“I don’t have to outrun the bear,” the wife calls back as she sprints away. “I only have to outrun you!”
High-conflict divorce is a competition between two people where the court grades on a curve. Although you may feel you are not doing everything you can to win your divorce, just remember: You don’t have to be perfect to win. You just have to be better than your spouse.
Be realistic, not optimistic or pessimistic. I also like to compare divorce litigation to a tennis match. Just because someone draws “first blood” and takes an early lead in the divorce by obtaining an early favorable ruling, it doesn’t necessarily mean they will win. Divorces are played out over an extended period, like a two-out-of-three-set tennis match. No matter what happens in the case, whether your spouse hires an aggressive attorney who is doing the “shock and awe” dance or has a crafty old-timer attorney who piles on passive-aggressive challenges to wear you down in a war of attrition, the winner will only prevail in a hard-fought contest that will be decided by only a few points either way.
If you understand that achieving your divorce goals will be a long, drawn-out, difficult process with many ups and downs, and that you will likely suffer to achieve your goals, you’re likely to reconsider your goals and will probably be more open to settlement earlier in the process, before you have overtaxed your budget. That’s highly likely to produce the best-case scenario.
The Greater the Money Budget is, the Greater the Value of the Divorce Is to Your Spouse (or Your Spouse’s Attorneys).
Fairness can be expensive to come by. Most people come to a divorce wanting to spend the least amount possible to achieve their divorce goals. However, some of them find that they’ll have to spend much more money than anticipated to obtain a fair and reasonable result. A number of factors, peculiar to this process, can drive both sides’ costs higher.
How the unscrupulous attorney of the non-moneyed spouse plays the game. Divorce is a unique area of the law where it’s presumed that the attorney’s fees of the “non-moneyed” spouse will be paid at least in part by the spouse with more money. The law was designed to shield the non-moneyed spouse against the bullying tactics of the wealthier spouse, but it is often used by certain attorneys as a sword. Usually what happens in these situations is that the non-moneyed spouse either borrows money or uses marital assets to pay for their attorney’s retainer. Then that attorney takes extreme (borderline frivolous) positions in an attempt to wear down the wealthier spouse.
There is no incentive for the non-moneyed spouse’s attorney to hold down costs because the way the system works, when attorneys apply to the court for their fees, most just put in requests for “estimated” amounts, such as $50,000 or $100,000, providing nothing more than a cursory detail about how they will earn such money. The court then usually reduces the requested amount by 25% to 50%. This is how the game is played. If the attorneys for the non-moneyed spouse are less scrupulous, they will ramp up costs, knowing that they will most likely see only fifty cents on the dollar at best. Such tactics give all attorneys a bad name.
Keeping things fair with “meaningful reallocation.” If you are fortunate enough to obtain a wise judge (and remember that not all judges are wise, even though their black robes make them look that way), the way to prevent that kind of excessive billing is to make all fees for court-ordered expenses (such as expert fees) subject to reallocation. This means that even though the moneyed spouse may initially pay 90% or 100% of the cost of most orders, such as for the cost of a forensic mental health professional in a custody litigation, the court may ultimately divide the cost differently between the parties, but only if there is a conclusion of the case after trial.
That last bit, “if there is a conclusion of the case after trial” is key, because, in truth, most courts never revisit the division of those costs after trial. Most cases settle by then, and the cost of the trial is so high that these outlays during the litigation just get added on to the total divorce budget. However, in some cases, a court may divide the cost of these orders 50%-50%, subject to meaningful reallocation. Meaningful reallocation means that the court will revisit these divisions of court-ordered expenses later in the case before a trial if necessary to help the parties resolve their differences most efficiency when the parties are closer to settlement. Meaningful reallocation gives the parties more equal financial responsibility during the litigation, even though their finances may be unequal, which appears unfair at first blush. But if the court is actually going to rejigger how much each side pays, then it is just another cost of the divorce litigation, just like the retainer, for the parties to either negotiate or have the court act as a decision-maker on such issue.
Billing alone does not move the case forward. I focus on resolving cases either through negotiations or mediations (the carrot approach) or trial (the stick approach), and I have developed a reputation in my community of being an efficient, effective attorney. Many people who find me have either consulted with other attorneys if they are starting their divorce, or have been represented by other attorneys during their divorce and sought me out because they are frustrated. In the latter case, often they are seeing attorney bills rise without seeing their case move forward. They may be particularly upset by what is called block billing, where an associate (it is usually an associate) bills four hours and the only description given for the work is “preparing statement of proposed disposition.”
Some clients assume that the attorney is working hard on their behalf. But if the client has been through trauma, which describes most people who go through a high-conflict divorce experience, then their level of trust and faith is low. And this low level of trust and faith can get projected onto their attorneys, whom they begin to see not as trusted advisors but hired guns. To make sure that your attorney is moving the ball forward, what I suggest you do is first ask this simple question: What value, if any, does _________ (having three attorneys cc’d on an email, two attorneys at a court conference, settlement meeting) provide to us in helping us achieve our divorce goals? If the answer doesn’t give you clarity or comfort, I suggest getting a second opinion from a trusted advisor.
In summary, success in your divorce is driven in large part by the wise use of your budget. You need to manage your emotions so you will not become too needy in your divorce. You need to manage your money budget, so you are spending your money usefully. Stay aware of your expectations, and keep asking questions when the divorce game and its rules get complicated. And above all, keep your eyes on the prize: The freedom of the life and fresh future you want the most.
