Contested divorces are expensive (See Video). Often times clients don’t have the cash in hand to pay what an attorney is demanding to get started or take the case to trial. So, what are your funding options?
Often one spouse controls all/most of the assets. This makes it difficult/impossible for the spouse without access to secure the representation they need. The good news is that there are options if you’re in this situation:
- Cash or reserve funds. For people who have the savings set aside, the easiest way to pay for an attorney is by using the savings.
- Credit cards. Many people use credit cards to pay retainer fees. Some attorneys accept credit cards. In a divorce, these charges are usually considered a “Community” expense, meaning that your spouse will share in the cost
- Borrowing money from your retirement account. This can be slow and have tax consequences.
- Borrowing money from family or friends in the form of a gift or a loan.
- Having friends/family pay the retainer fee directly to the law firm. The client still directs the case and makes all decisions.
- Third-Party Divorce Funding. Clients sometimes ask their attorney to finance their case by not collecting fees when due. This is a bad idea and probably a conflict of interest! An attorney cannot best represent a client who owes thousands of dollars to the firm. It could cloud the lawyers’ judgment or affect the level of representation provided to the client.
It is best to borrow money from financing companies, or outside sources, not from attorneys or law firms. If you owe your lawyer money, do you really think he or she is going to give you the service you deserve? It’s simple logic. The lawyer wants to work on your case, not worry about payment. The client wants the lawyer spending time working on the case, not acting like a debt collector.
At the outset, we strive to have an honest discussion with clients about the cost of their case. Most clients fall into the traditional arrangement of paying a retainer and the lawyer billing against the retainer throughout the case until conclusion.