Divorce financing by private companies?

It seems there is a new trend in divorce (there are always new “trends”, but this one does seem new), the private financing of a divorce by a for profit company. In other words, when someone needs a divorce but cannot afford a lawyer, instead of borrowing from relatives, or if there is no way to borrow, there may now be a new option. It seems that if the stakes are high enough, or if there are enough assets to ensure a return on investment, people going through a divorce may now be able to borrow money with the settlement monies used as a sort of collateral. There is a story in the New York Times about this (click here for the story).

Is this a good thing? That’s a very good question. The obvious discussion might be “why don’t divorce lawyers simply do this?” The not so obvious answer (until you hear it) is that it would be highly unethical. Why? Because divorce lawyers should not be motivated to simply obtain as much as they can for their client, unless that is what the client wants. So, what if a lawyer’s fee is dependent upon a large recovery, and then their client decides they want to walk away with no money? Then there is a potential conflict because the lawyer will not be paid if the client walks away, yet the lawyer’s duty is to be governed by the client’s wishes. So perhaps this new idea, a loan or investment by a third party could help? I have not yet thought about it long enough to know if I support the concept or not. What do you think? Please post a comment.

Why is the McCourt’s divorce unique?

Why is the McCourt’s divorce unique? Because lately the high profile cases in the news have been resolved out of court (Think Tiger Woods, Sandra Bullock and A-Rod). In fact, most high profile matters our firm is involved in are settled without any press and with very little expense. Actually going to trial with so many dollars at stake (and so much public reputation to lose) is becoming rarer and rarer. But the McCourts are there (click here for link to UPI story). No doubt the lawyers tried their best to guide the parties to resolution. Lawyers of that caliber always do. But when one party (or both) think their position is blatantly reasonable, or is an obvious “winner” in court (there is no such thing), it can be hard to settle a case. Some cases are just easier to try.

Unfortunately for the McCourts, it appears the court will decide their divorce which is guaranteed to make one, if not both parties displeased with the outcome.

On ocassion we encounter a stubborn opponent (opposing party or opposing lawyer). Even then, steps are taken to try to reach resolution. Mediation, settlement conferences and even pre-trial conferences with the judge are usually attempted to promote settlement. We also sometimes utilize a process known as Late (or Early) Case Evaluation. This process entails hiring a family law attorney who is respected by both sides to give everyone a “reality check”. Sometimes that does the trick. But when someone is truly unreasonable, the only way to resolve a case is trial. But even then, the good lawyers can only ease their conscience if they have truly attempted settlement first. But once settlement efforts are exhausted, trial becomes inevitable. Perhaps the one benefit of the McCourts actually going to trial is that others will realize how risky and costly trial can be, and thus become more determined to resolve their own cases privately. Let’s hope the message is sent, and heard, loudly and clearly.

Attorneys as “Counselors” at Law

As attorneys, our roles are varied and unique depending on the situation. But it has always been interesting to me that attorneys are often referred to as “counselors”.

The recent case involving Lindsay Lohan is illustrative of my point. After her sentence was determined, she hired well known attorney Robert Shapiro. While the sentence had already been meted out, surely there was something he could do for her? Many opined that he would rush in and save her from serving time in jail. But in my opinion, based on the very limited information I have via the press, it seems he was truly hired as a “counselor” at law. His credibility together with his personal history (he lost a son to issues similar to the ones Ms. Lohan is dealing with) made him the perfect candidate to assist Ms. Lohan with a more holistic approach. I believe he tried to discuss with her an overall, long term solution as a good lawyer should.

Perhaps nowhere is the phrase “Attorney and Counselor at Law” more appropriate than in family law. It is interesting that the Merriam-Webster OnLine dictionary defines the term “Counselor at Law” as: “a person who gives advice or counseling-marriage counselor”. Interesting that “marriage counselor” is right there in their first definition.

In most other types of lawsuits, clients can discuss their case with their spouse, their family and their friends. But in family law cases, like divorce, the parties cannot confide in their spouse (who is the opposing party) and they often do not discuss the details with family members for many reasons, including embarrassment. This puts the family law attorney in the unique position of attorney and valued confidant. And it is an obligation of supreme importance. Should a lawyer file every motion he or she can think of, just because he or she can? The interesting part of family law is finding out what the client’s ultimate goal is, and figuring out the best way to get there. Sometimes the answer is through a trial, but often, as discussed in a previous blog entry, mediation and alternative dispute resolution is best.

The field of family law is not one of “fill in the blanks” and there is no such thing as a “cookie cutter” divorce. Each situation must be evaluated on it’s own with consideration given to all the moving parts: relationships with and between their children, their family members, business partners and geographical considerations in case one party wants to “move back home” where his or her parents are. A good divorce lawyer will know how to listen very carefully. Our job is not to get what we think the client wants, but to actually learn what the client wants and to be sure we are achieving their goals, not ours. The case and the result are the client’s to live with and we must do our very best to help them achieve their goals and put them in position to move forward once their case is over.

Mediation and Settlement

[youtube][/youtube]I recently served as a mediator for a contested divorce case. Each side was well represented and prepared. But it still was a difficult situation. While the details of the case including whether it or did or did not settle are confidential, I am confident the process was beneficial. I enjoy serving as a mediator and do it three or four times each year. As an advocate, when representing someone going through a divorce or family law matter, I am probably involved in ten or twelve additional mediations per year.

After a full day of mediation, parties often realize that failure to reach resolution only ensures more attorneys fees, more stress and delayed closure. Spending time together, even if separated during the day, allows the professionals and the parties to focus on resolution. Smaller areas of disagreement succumb to discussion of the larger issues. Having a neutral third party (mediator) often helps refocus everyone on total resolution which often means foregoing minor goals.

Family Law mediation and resolution is a complicated process. Rarely does anyone get all they want. But if the goal is closure, finality, cessation of fees and hostility, it can be accomplished. Why, because those goals are worthy of significant concession on lesser matters.

There will always be cases where settlement is impossible, but as a lawyer and mediator, if everyone has really given settlement a good try, litigating the case is much easier on the conscience. Litigating without giving your best to get it resolved short of trial is, in my opinion, a shame. But once all efforts at settlement have been exhausted, then we are of course left with the remaining alternative of presenting the strongest case we can to the court. A well presented case can achieve good results, but if if we can achieve those results via settlement, even better (and usually less expensive) for our clients.