Sometimes, clients will ask why New Jersey Divorce Attorneys such as myself generally only offer hourly billing. “Surely it can’t kill you to offer a creative billing solution,” they imply. “What about a contingent fee? Or at the very least, a flat rate fee?”
I want to address why contingent fees are never offered and also why flat rate billing is rare in New Jersey family matters. But first, I want to make an admission.
I too dislike the billable hour. Most New Jersey divorce attorneys that I have spoken to regarding the subject feel the same way.
So, if there is all this disdain for it, then why is the billable hour in New Jersey divorce cases as persistent as bronchitis in winter?
First, let’s deal with contingent fees. This is the fee arrangement whereby an attorney takes a %. Personal injury cases provide the most common contingent fee arrangements, but a contingent fee can also be utilized in collection law, tax assessment appeals, and a host of other practice areas. For obvious reasons, however, a contingent fee doesn’t make as much sense in divorce cases. Most importantly, the New Jersey Court rules specifically bar contingent fees in New Jersey divorce cases.
Flat Rate Billing
Many clients would probably welcome a flat fee in New Jersey divorce cases. Cost certainty is often prized. A flat rate system is where an attorney is paid (usually upfront), a set amount for the entire case. For example, I could charge a client $10,000.00 for a divorce case. In a flat rate system, whether the case settled within a month or went all the way to trial, I would be paid the same $10,000.00. Many real estate transactions utilize flat rate billing.
The problem is that New Jersey divorce cases are so fact-sensitive. They are also people sensitive. Some New Jersey divorce cases take only ten-twenty hours of work and others take hundreds or even thousands of hours of labor. A New Jersey divorce attorney who only utilized flat rate billing would likely go bankrupt. Moreover, there would be less motivation for the clients to settle a case.
Therefore some (perhaps even most) divorce attorneys will not offer flat rate billing under any circumstances. Other attorneys will offer flat rate fees for specific portions of a family law action. For instance, a flat rate may be offered for a specific post-judgment motion, a specific hearing, or a domestic violence issue. It’s important to talk with your attorney to see what types of billing options they offer.
Who Pays Counsel Fees in a Divorce?
If you’re considering a New Jersey Divorce, you may be concerned regarding how you will pay for the attorney and counsel fees. If your spouse attempts to cut you off from the marital funds, then you may need to pursue court action, but may be involved in a “Catch-22” situation where you can’t retain an attorney due to not having funds. Likewise, you may be in a marriage where your spouse earns substantially more than you or has access to greater assets than you with which to fund litigation.
New Jersey generally operates under what is known to lawyers as “the American system.” In general, this means that each party to a litigation is responsible for their own legal fees. In addition, absent a “fee-shifting” statute, even if you win it is difficult to get reimbursed for the costs of litigation. (The other primary system is known as “The English System,” wherein the loser pays both sides counsel fees.
But divorces are different—they generally involve a pot of communal monies. So in the divorce setting, who pays?
Which Party is Responsible for Divorce Counsel Fees?
Subject to the provisions of Court Rule 4:42-9(b), (c), and (d), the court in its discretion may make an allowance, both pendente lite (i.e. during the pendency of the divorce) and on final determination, to be paid by any party to the action [in the family part]. R. 5:3-5(c) for the award of counsel fees.
In determining the amount of the fee award, the court should consider, in addition to the information required to be submitted pursuant to R. 4:42-9, the following factors:
(1) The financial circumstances of the parties; (2) the ability of the parties to pay their own fees or to contribute to the fees of the other party; (3) the reasonableness and good faith of the positions advanced by the parties; (4) the extent of the fees incurred by both parties; (5) any fees previously awarded; (6) the amount of fees previously paid to counsel by each party; (7) the results obtained: (8) the degree to which fees were incurred to enforce existing orders or to compel discovery; and (9) any other factor bearing on the fairness of an award.
Statute N.J.S.A. 2A:34-23 also authorizes an award of counsel fees in a matrimonial action and further requires the judge to “consider the factors set forth in the court rule on counsel fees, the financial circumstances of the parties and the good faith or bad faith of either party.” An application for an allowance of counsel fees must be supported by an affidavit of services addressing the factors enumerated by the Rules of Professional Conduct 1.5(a) ((RPC 1.5(a)). R. 5:3-5(c).
Issues such as acting in bad faith or refusing to act in a reasonable manner may inure to the imposition of counsel fees against a spouse. The Court will also look to the financial circumstances of each party to determine whether counsel fees should be awarded or advanced. Courts will particularly emphasize any financial disparity between the divorcing parties.
Most counsel fee awards are without prejudice, meaning that the Court reserves the right to address the final award of counsel fees at the time the divorce is finalized.
If you do not have the funds to seek a divorce but your spouse does, you should discuss this issue during an initial consultation with your attorney to determine if appropriate action may be taken to ensure you can afford to keep up with the divorce litigation expense.
I’m not writing this post to say: “look at us poor New Jersey Divorce attorneys.” I’m sure nobody feels sorry for us and our billing problems. But I do think it’s important for clients to understand that divorce is simply an area of the law where billing is difficult, all the way around. The billable hour is really the most equitable way to–in the majority of cases–determine the cost of legal services.
That said, there are always ways to improve anything.
Your New Jersey Divorce Lawyer:
If you’re considering a New Jersey divorce or Family Law action contact me to discuss your options. You can schedule an initial consultation by calling my office at 908-237-3096 or by scheduling your own divorce consultation online by clicking here.