150. 16 Questions to Ask Before You Hire Your Attorney

0:01

Welcome to WeChat Divorce, hosted by Karen Chellew, Legal Liaison and Catherine Shanahan, CDFA.

Each episode we sit down with divorced professionals and industry experts to provide insights and frank discussions about real people, real situations, and real divorce to help you achieve your best life post divorce.

0:39

Welcome back to WeChat divorce.

I’m Catherine Shanahan, your divorce financial specialist and Co founder of my divorce solution.

Boy oh boy, Karen is this going to be a conversation that will get my blood boiling.

However, we may even get a ton of responses about this.

0:56

If you’re ever staring.

If you ever stared at a four figure legal invoice and wondered how fast is this money burning, you’re in the right place.

Hello.

Hello.

And I’m Karen Chellew, legal liaison and fierce protector of your wallet.

1:13

Today we’re talking about a topic every client whispers about but rarely tackles head on Managing the cost of your divorce.

Exactly.

My gosh, if you ever go out to dinner and you talk to somebody going through divorce, and of course everyone likes to talk to us when we’re out, this is a huge topic.

1:31

So today we’re going to break down hourly rates, paralegal leverage and that mysterious line item called internal conference so that you can tell if you’re paying for strategy or just a staff meeting.

We’ll also share the 16 questions you must ask before you sign an engagement letter, plus practical hacks to keep your burn rate from becoming a bonfire.

1:52

We’ll have the 16 questions in the share notes at the end of the podcast.

So grab your statement, a highlighter, and maybe even a calculator, because by the end of this episode, you’ll know how to spot red flag charges and build a lean, mean divorce team.

Ready to keep more of your own money?

2:09

Let’s dive into cutting the burn rate.

So a cold open snapshot.

So Maria, let’s call her, her invoice shows $4600 gone in just three weeks.

Half of them are on review of emails.

Karen, what went wrong with that?

2:24

That’s a very, very common experience when people start the divorce process.

And as a matter of fact, people don’t realize they need financial help until they’re about 3 months in and they’ve gone through three retainers.

If their retainer was 5000, you can see how it goes that quickly and they believe that nothing has happened.

2:47

And so they wonder why.

One of the reasons why is because they get their professional services agreement and they don’t understand what it says.

One of the first things that we do when people have questions about their invoicing with their attorneys is let’s look at the professional services agreement.

3:04

Let’s look how it’s laid out.

Let’s look how they’re charging, let’s look what you signed up for.

Because short of that, the the attorney’s role is just to go through the process when a client engages them.

First we do this and then we do that.

And relative to your response to that team and your structure around your communication with that team, there’s no plan in place other than moving to the next step relative to how you’re, meaning the client is responding to the relationship.

3:35

And so that’s shocking to so many people because they believe they’re going to hire an attorney and that’s just going to set the pace moving forward.

Actually, you, the client, set the pace.

Really good point.

So you need to know the price landscape.

Interestingly enough, the national average hourly family law rate varies from, and this is no joke, 275 all the way up to $750 an hour plus or more.

4:03

The range is wide.

And so people believe that, well, I want an attorney who charges less.

You need to think about that because that means typically less experience, right?

So what one hour of a experience lead attorney would take, it could take an associate 345 hours.

4:24

We’ve seen that often because they spend a lot of time in the research space.

So anyways, that’s that’s why your divorce can get so expensive and rate.

Go ahead, go.

Ahead.

I was just going to say rates rise with experience and locations in different areas of the country.

4:42

Attorneys rates are just very different for a variety of reasons.

Yeah, Well, I I think one way to combat that is to know the right team that you need in place, right?

Because a lot of times that that $4500 that we talked about in the first three weeks disappearing, a lot of that is emotional emails going back and forth.

5:01

It’s actually nothing moving your case forward, you know, it’s just what’s on your mind.

You’re just spitting it all out to your attorney.

And if they have their paralegal on it and then they have their assistant on it, everybody’s billing at their rate to read the same e-mail.

So put your team together, you know, and, and even before putting A-Team together, of course, we created the MD’s financial portrait and our MD’s method, it’s to get you organized so you know who you need on your team.

5:26

You know, you even know what type of a lawyer you need.

You know, when you, when you know the complexity of your case.

How many times or do we hear people are hiring this attorney because their best friend used them, but the best friend did not have businesses or the best friend had major custody plans and that attorney was great for that.

5:43

But you don’t have custody problems, you know, So you need to know what type of lawyer you need.

And how do you know that when you don’t know the complexity of your case and you don’t know what you have and what’s missing?

So that’s why I do think the portrait should be your first step.

But in any event, know what type of lawyers are out there.

5:59

You have the full service litigators, they have a retainer and an hourly rate.

You have a collaborative or immediate mediator friendly counsel.

But again, you’re going to have to be prepared to go to them.

And then there’s that limited scope attorney who represent you, but you can hire them for drafting an agreement or just having a single hearing.

6:19

But you have to check most states ethic rules that allow that, and that’s the American Bar Association.

Yeah, that’s a definitely a new trend that we see where and it’s beneficial if you and your spouse have come to an agreed division scenario, you can hire an attorney for a very limited scope or if you’re working to complete your MD’s financial portrait and you need just advice along the way.

6:41

That’s not uncommon, you know, just to support what you’re doing because we can’t give legal advice, but we can certainly give you really good questions to ask your attorney so that the we can apply it financially so that you can prepare your financial documents for your attorney and you’re well prepared.

6:57

So the limited scope representation can be very beneficial in a lot of cases because that level of representation may be in your best interest for the short term or the long term according to how you come out of building your financial portrait.

7:14

Because you’ll know where the complexities of your case lie and what type of an attorney you’re going to need, if any, frankly.

Yeah, and you know, get a divorce coach or a therapist if you feel there’s just a lot of decisions you’re making that are emotionally driven.

7:30

Don’t pay your attorney.

Most attorneys don’t want to be your therapist anyway, but they have no problem billing you if you’re reaching out to them.

So go to a divorce coach, go to a therapist and talk about your emotions with them and be really beneficial.

And don’t run out and hire a forensic.

7:45

We all hear about forensics needed in cases and or hire a new CPA or hire a mortgage specialist.

You don’t need to do that yet.

You need to get prepared first.

If the complexity of your case requires A forensic, we’ll know when we get you organized.

Or you’ll know when you’re organized because you have to know what the scope of anyone’s job is when you’re hiring them.

8:05

Otherwise you pay for something that’s not usable, that doesn’t help move you forward in any way, and you’ve just wasted a lot of money.

So get prepared 1st and then put together the team that you need when it’s appropriate.

Absolutely.

I’m going to put two qualifiers there.

So we had a client who had a forensic and I kid you not, this is true as true can be that forensic spent every month updating bank statements and she was charged for it.

8:36

She didn’t even realize it because a lot of times people don’t even see their forensic bills, they just keep sending their money.

She didn’t really know what the forensic was doing and so finally when we did her portrait, she came to us mid litigation.

She had spent $100,000 on the forensic accountant just doing bookkeeping because that the accountant didn’t have enough information do any analysis yet.

9:01

This husband hadn’t given the information necessary.

So I do appreciate that sometimes a forensic needs to be retained for conflict purposes, right?

If you know you’re going to need them for evaluation and analysis, a lot of times you do have to retain them so that your spouse can’t retain them or, or it’s just someone that your attorney is accustomed to working with.

9:23

But I do appreciate the forensic who says I’m retained.

I’m going to sit here and wait until I know the scope and we have sufficient documentation.

That right there is a good forensic and you should look for that when you’re interviewing them for sure.

That’s an excellent point.

9:40

And just to follow up with that, know what the scope of what they’re you’re hiring them to do is so that forensic would wait and see, right?

They’re going to wait to see what they have, what you have, what the complexity is and what you’re actually looking for, not a glorified checking balance like Karen mentioned.

9:58

Prior to that, know what the scope of what the deliverable will be so that you can use it to make good decisions for yourself.

All right, so let’s go into that invoice that hopefully you’re going to get every month.

So you should be receiving an invoice every month from anyone, anybody who’s billing you hourly that that’s just a got to have.

10:17

So let’s talk about the anatomy of an invoice.

You have your matter number that’s going to be important if you’re challenging your bill at any time, the date, the time keeper code, a narrative of what was done in an increment of minutes.

OK, that’s kind of how attorneys fees and most service oriented professionals in the divorce space bill.

10:37

The red flag charges you should be looking for.

It’s what’s called block billing.

You’ll you’ll notice it.

You’ll notice a trend as you kind of develop a relationship, as I say, with your invoices from your counsel.

So you know, prep for hearing 7 1/2 hours.

10:54

Well, that is essentially a day’s work, right?

It would be unusual for someone to spend exactly 7.5 hours on your file.

Just a red flag.

That’s most of what that is.

And then just see if someone else is reviewing the same thing often.

11:10

Often what I’ll see when I’m reviewing invoices is that when dot, let’s just say your spouse’s answers to discovery come in every, everybody on the team goes for it.

And then later a letter comes in.

Maybe someone needs the documentation or you’re prepping for a settlement conference.

11:29

Everybody reviews that same information again, that settlement conference gets continued, mediation gets canceled.

That happens all the time.

So that goes silent and then it gets rescheduled and then everybody’s looking at that same documentation again.

11:46

I ask all of my clients to say, can I see what your prep notes are or can we talk about it so that we’re all assured that we don’t need to reinvent the will every time something happens in my case.

That we all that the team, that attorney, team paralegal, associate attorney, whoever’s on the case has to review all of that same information and documentation again as if I had never been reviewed.

12:11

That’s one of the most common things we see on attorneys fees.

And the other common thing we see is that when documentation comes in, the organization of it by the paralegal can become extraordinary.

They are, you know, usually a lesser rate, but sometimes, you know, they are tasked with billable hours.

12:33

They have to report X amount of billable hours a week.

So you just want to make sure that whatever they’re reviewing is reasonable.

I have another example of a case where a paralegal spent, she billed 90 hours for a work that my divorce solution did, but it was for about, I’m going to say 500 pages.

12:58

So it’s just things you can take notice of.

The bills are good information.

And if you see that your attorney has discussed certain things with another attorney or with whoever, you can ask for the notes.

You’re, you’re reminding me of the case that we were on with an attorney a couple of weeks ago.

13:16

And you looked at the bill with our client and he had charged her thousands of dollars to review her, something I don’t even recall, but and to review and take notes or a report or something.

And so you had instructed her to ask him for the notes before ahead of our call with him, because we, he replied to her in writing that he didn’t have any, nothing was written down.

13:42

It was all in his head.

So we said, OK, thank you for that.

And we get on the call with him and every question we asked him about that file, he did not know.

There was nothing in his head.

He never reviewed it.

It was quite clear to her and we we already knew that it was quite, quite clear to her.

13:59

And it was embarrassing for him, if you ask me.

Of course, you know, some attorneys with egos are not embarrassed by that.

But he, he had no work product there for her, nor did he know the file.

Actually, I think she’s going to a different attorney now.

But you know, I agree.

Ask for those notes if they they, if they say they prepped for and hearing for 7 1/2 hours.

14:18

You don’t just prep by reading things because you’re not unless you’re their only client and you’re all their focus on how will they recall that?

So they have to write something down and you know, ask for it.

If you’re paying for this, like this is what you’re paying for.

You do not have to be embarrassed or be shy or feel bad about asking for a work product.

14:36

Yeah.

And in that particular case and in most cases, that information was important to her and to us to understand what he thought were the critical issues in that case.

And so it was frustrating to get on the call and we weren’t able to have a productive conversation even though he had billed her 10 hours to prepare for that call.

14:58

And then he billed her an hour to be on that call.

I mean.

Flat fee, so we included an hour fee, but yeah, then he billed her for that wasteful call.

So frustrating.

It is frustrating and I think a lot of people can relate to the frustration.

So it is important that you understand your free agreement is your retainer minimum fee.

15:18

A lot of free fee agreements now that we see have you pay the retainer whatever, five, ten, $15,000 and none of that is used on the monthly building.

It’s held till the end of the case and so you’re paying the monthly fee until the end of the case and then they’ll refund the retainer.

15:36

Some retainers are minimum fees.

So you just need to know that.

But you need to know then how the various people in the firm will be tasked to bill your file and then if they all will be billing to review the the same work.

15:52

And so that’s just something you need to know and negotiate with your counsel prior to moving forward.

Otherwise, it’s financially painful.

And upsetting, right?

And it just ruined your whole day anyway.

All the time.

It ruins my day too.

I can’t stand to hear about that stuff.

16:08

I just don’t get it.

I don’t get how it’s legal to do that.

But anyway, let’s talk about some things that you can try to do to control some of the cost.

Maybe set a monthly budget cap for yourself and ask for notice if you’re reaching 80% of capacity of what you can afford that month.

And then maybe you have to put some things on hold.

16:24

Try to batch communications, you know, don’t keep sending one off emails to them because they’re going to pivot at everything that you send.

Send one organized e-mail instead of 6 little mini texts or emails and do some things by yourself where it’s safe to do that.

By gathering documents, preparing some of your own timelines, filling in some financial affidavits, you know, wherever you could do things for yourself.

16:47

Not only is it empowering, but it will be cost effective for you.

Consider looking for places that have flat fee models.

You know, uncontested parenting plans you can get do with a flat fee, Quadro drafting, deed preparation.

I mean, I think some of the best feedback we get about the MD’s method is that we are a flat fee model structure.

17:08

You know, it’s hard, you know, because you know we give more than what’s actually in an agreement a lot of time.

So do we lose some money sometimes yes.

But flat fee for us, I think the power of that is our clients are pretty fluid with their conversation.

We know what’s going on because they’re not afraid to send something that we’re going to bill them $350.00 for communication and communication and preparedness in divorce is really important.

17:33

And then where you can leverage the paralegal, you know, insist on routine filings, go to a lower staff member, a lower rate, I should say staff member, you know, I think Karen mentioned before, see where the paralegals involved or an associate attorneys involved know what you’re paying for and who you’re paying for.

17:51

I mean, Karen, I know you look at a lot of our clients legal bills and I know you’ve caught several times where a paralegal is doing the work, but they charged at the attorney’s rate.

I mean they said it was their mistake of obviously it’s their mistake, but if you didn’t notice that the client would have never noticed that.

18:10

So it is so important to look at those monthly bills.

Although painful, you should look at them.

Yeah, absolutely.

And you know what?

Attorneys and attorney staff are human beings, so it’s not uncommon for them to report 10 hours of time when they meant to report an hour of time that, you know, everybody’s under deadlines and crap, getting their bills out to the billing department to get people billed, it takes a lot of time.

18:37

And so billing, basic billing errors can happen all the time.

So it’s fair for you to look at it from that lens as well.

So there are various components of a divorce that it does pay to invest.

18:53

And of course one of the best investments you can make is to, of course, create your MD’s financial portrait.

That’s hands down anybody who’s gone through the process can certify to that.

But if you need a complex stock comp analysis, a business valuation or income available for support valuation, anything in those spaces of where you have the documentation, but you don’t know what it means to your case, what’s marital, what’s separate?

19:20

If you’re not paying close attention to those, that’s money left on the table.

And especially in the business valuation, they come in all shapes and sizes.

They come in an e-mail from the owner of the business.

We’ve seen excerpts from a prior divorce in a larger company that they used a company valuation.

19:40

You know, that can be financially detrimental to your case.

So we’re going to always help you know where the most valuable portion of your marital state is so that you know where to spend your money.

So the name of the game is litigate only the high impact points settle the rest for sure.

20:01

Yeah.

So the conclusion of this podcast today is really, yes, you’re going to need an attorney at some point, right?

That’s what we’re hearing.

But to what level do you need a litigating attorney?

Do you need a consulting attorney?

Can you use a mediator?

Who’s an attorney or just a mediator?

20:18

And the only way to really decide that is knowing the complexity of your case, knowing what you’re up against, and that’s getting financially prepared.

So make sure you’re organized, you’re financially prepared, you understand what your options are and you understand what type of an attorney representation that you need and to what level and, and when do you need that?

20:38

You know, sometimes you don’t need it right in the beginning, yes, if you’re at harm’s way, yes, if support has been cut off, there are circumstances where yes, the first step is with an attorney.

But honestly, in probably 90% of the cases, at least the ones that we’ve come across, you can get prepared first.

20:54

You know, you have an option to work with your spouse, even if they’re narcissists or it’s high conflict to get some information before filing, before going to an attorney.

Some things can work to your advantage.

So I think at the end of the day, we want you to be prepared.

We want you to understand what you’re up against.

21:10

And we do want you to look at your bills so that you can stand up for yourself if you’re already down that path, you know, and, and if you have to take pause, it’s probably the best investment in yourself.

So if you’re listening and you’re already into the process, it’s OK to take pause.

Come back and get financially organized, get financially clear.

21:28

You know, if you’re thinking divorce, get financially prepared first, you know, so that you can make really good decisions not only for you, but for your entire family.

And remember, you’re the client.

You have the ability to manage the financial burn rate of your case and so really good constructive conversations are to be had.

21:51

And you know, a lot of people get angry with the system and their attorneys, but you can also become a better client to make this process better for you.

You can learn how to better communicate with your attorney.

You can learn how to better communicate with your divorce professionals and what all the components of getting you to a good financial settlement or prepared for trial will you know is needed for you.

22:18

So you do have that ability.

All right, so now you have the playbook to keep your legal fees from running the show.

Remember, every e-mail you batch, every paralegal you leverage, and every line item you question is real money staying in your pocket and not evaporating into the billable hour?

22:36

If this episode sparked an aha moment, share it with a friend who’s just starting the process and leave us a quick review somewhere people can find these cost saving tips.

We’ll be back with other divorce explorers.

Until then, keep your eye on the invoice and your future finances even brighter.

22:54

Thank you for tuning in.

We invite your questions or feedback.

Always.

We want to be discussing what is financially important to you. e-mail us at hello at ck11.net with your questions or comments.

Stay tuned for future episodes as we continue to unravel the fascinating world of finance and divorce.

23:13

Remember, knowledge is power.

Disclaimer The information provided in this podcast is for educational and informational purposes only and should not be considered as financial or legal advice.

Please consult with professionals in the relevant fields for personalized guidance.

23:30

Thanks for joining us on another episode of We Chat Divorce.

We hope this episode was informative and supportive on your divorce journey.

If you're looking for more support for navigating divorce with confidence and clarity, head over to azure-emu-499854.hostingersite.com/ for more podcast episodes, divorce events, and resources for your divorce.

23:53

We’ll see you back here for our next episode.