After posting about the Collaborative Divorce process a few weeks ago, I have received numerous inquiries regarding the statements related to the potential cost savings that the Collaborative process offers, as many readers figured that with both parties still represented by their own attorney the savings would be minimal. Therefore, I figured I would take some time to more fully explore the cost savings that the Collaborative process can create.
As an initial matter, it is true that in a Collaborative Divorce each party retains their own attorney at the same rate that they would likely pay a litigation attorney. It is also true that within the Collaborative Divorce process practitioners utilize third-party neutrals, typically between 1-3 per case, which charge additional fees to the parties. However, due to the difference in the process, and the sharing of many expenses, the combined total cost incurred by the parties will be significantly less than if the matter was litigated.
One of the major cost savings results from the elimination of judicial requirements that are created in a divorce litigation, at least until a settlement is reached. In a typical litigation case, one party files a Complaint, which is served (at a cost) on the other party, who then files an Answer and Counterclaim. In a Collaborative case, once an agreement is reached, one party files a Complaint and the other party simply executes an Acknowledgement of Service and Consent to Enter Final Judgment of Divorce, eliminating the cost of serving the pleadings and the need to file a separate responsive pleading. In a litigation case, the Court schedules the matter for a Case Management Conference (which results in a scheduling order necessitating the service of costly Interrogatories and Notice to Produce), followed by an Early Settlement Panel, followed by Economic Mediation, with a paid mediator (albeit with the first 2 hours free, one of which is spent reviewing the file before the first mediation session). If the case is still not settled at that point, the Court will require additional mediation/settlement conferences, followed by a trial, which would exponentially increase the attorneys fees beyond anything that would be incurred in the Collaborative setting. In contrast, in a Collaborative Divorce, none of these required court processes are engaged in; instead, the parties meet in conferences aimed towards reaching a settlement from the outset. With each Court appearance requiring payment for travel time and waiting in the Courthouse for the Judge to get to your case, each party will easily spend around $1,000-$2,000 each day their attorney is required to go to Court. Further, because of the inflexibility of the Court schedule, they will be required to appear when the Court mandates, as opposed to when they are available.
With the attorney fees being limited by eliminating many useless hours on procedural matters, the money spent on fees can be focused on productive tasks. Furthermore, in a litigation case, because the nature of the process is adversarial, the parties are at odds with each other each step of the way, always attempting to gain the upper hand and increasing the time spent negotiating even mundane matters, at the cost of higher legal fees, in addition to increased anxiety and frustration. For example, in litigation each party serves lengthy requests for discovery which often seek irrelevant information, whereas in a Collaborative Divorce the parties work together, along with the joint financial expert, to accumulate all necessary information. In the litigation context, full disclosure is not always achieved as parties try to limit the other parties’ access to information to gain a competitive advantage which, again, results in higher legal fees. In addition, with a joint financial expert, the cost of one is shared by two, whereas in litigation, with each party retaining their own expert, the cost of two is born by both. Furthermore, in the litigation context each attorney is helping to prepare, compile and review all the financial information, again at the cost of two professionals plus the experts, whereas in the Collaborative context the attorneys allow the trusted, neutral financial expert, whose single rate is less than either of the attorney’s hourly rates, to compile and prepare the necessary financial information.
In essence, in its simplest explanation, the attempt to gain an advantage in litigation comes at the cost of incurring higher legal fees, whereas the attempt to jointly come to a fair resolution in a Collaborative Divorce results in more complete disclosure with less effort and at less cost, even with the use of multiple professional neutrals.
The reality is that a full explanation and breakdown of the costs savings cannot be achieved in the limited space within a blog entry; however, as a seasoned litigator and Collaborative attorney, I can assure you that Collaborative clients, in the long run, spend significantly less on fees than litigation clients, due to the nature of the Collaborative practice vs. the adversarial practice, the elimination of the Court’s involvement and required appearances, and the joint efforts of the parties, the attorneys and the professionals involved.