August 28, 2011
Professional Fees: Managing the Cost of Divorce
There are many elements we can focus on in analyzing the cost of divorce, but I’m writing to offer some thoughts on the billable hour. The billable hour is how most professionals approach the transaction of working with you during your divorce—you pay them for the time it takes to complete the process. A few renegades deviate from this model, like the husband and wife therapist/attorney duo who charge a flat fee of $10,000. Or in the other direction, the bare-bones services of a document preparer who charges a flat fee with the training and skill set that reflects the amount of that flat fee.
But the vast majority of divorce professionals—legal, financial, mental health—break their time down into smallish increments, like six or fifteen minutes, and bill for the time spent working with and for clients to get their tasks completed and their divorces finalized. The billable hour works well for some folks, but is quite toxic for others; which means that the billable hour is something to consider as you choose your divorce professionals, because making an informed choice can help you focus all your attention on the tasks, transitions and negotiations ahead of you in the divorce process, rather than ending up spending time constantly worrying about or wrangling with your professional(s).
Some thoughts to consider on the billable hour:
- The different professions charge very different rates. Attorneys charge the highest hourly rate because their overhead is generally the highest (think support personnel to liability insurance to research materials and on). And financial professionals generally charge less per hour, and mental health professionals less than that. Might you be well served by working in an interdisciplinary process with two or more of the different professionals, giving you a spectrum of choice in services and rates as your process evolves?
- Within the same profession, skills and rates do not correlate perfectly. You may want to have a consultation with a few attorneys, each from a different rate spectrum, to make a comparison. Is the $500 an hour attorney worth the additional per hour costs to you than the $300 an hour attorney?
- Hiring professionals to work together, rather than fight, generally uses less billable hours. Professionals who work in consensual dispute resolution processes, like mediation and Collaborative Practice, generally bill less hours per case, than traditional attorneys do. If you think that you and your spouse have the capacity to sit down and listen to each other, to focus on the result working as well as possible for both people, than you might save a lot of money. Fighting in divorce is posturing; and that posturing is based on legal complexity which is endlessly debatable; all of which means that the billable hours they spend fighting for you ends up putting a large amount of your hard-earned money in their pocket.
- Pick professionals who you trust will bill you fairly. In each consultation, ask professionals about their approach to the billable hour. Do they bill for administrative tasks? If you have a five minute phone call to confirm something, will they bill for that? What is their office’s procedure if you disagree with an item on their bill? When you sit with them do you feel like a sign is over your head reading: ATM? Or do you get the impression the professional will work hard to be of value to you?
- If you find that you’re thinking more about the billable hour than the task at hand, it’s time to change to another process or professional. Divorce is hard enough without a mental loop of constant anxiety over your professionals’ billable hour. If you’re on a conference call with your professional and your spouse, and all you can think about as you stare at the clock is how much the call is costing you in billable hour time, that’s a sign that you might be better served researching lower-cost professionals or bare-bones flat fee services.