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Money’s too tight to mention…

April 4, 2011

Understandably one of the first questions I am asked when a new client contacts me is “how much is this going to cost?”. If this isn’t one of my client’s first questions, then it should be and I will raise it directly with my client before I undertake any work for them. I am not sure what it is in our culture that means money is still often a difficult, awkward subject to discuss but let’s be clear – legal costs aren’t cheap so you are best to be upfront about these right at the beginning of your dealings with a lawyer.  I believe one of the biggest causes of client complaints about legal costs is that they and their lawyer haven’t communicated clearly about the likely legal costs of their matter.

So how much is it likely to cost you in legal fees if you want to resolve a family law issue?  The answer to this can be a frustrating “how long is a piece of string?”. However, there are some guidelines and rules about what lawyers can charge and there are things you can do to reduce your costs.

 The fees you are charged must be “fair and reasonable” for the services provided. There is the common belief that a lawyer’s fees are based solely on the time the lawyer spends working on a client’s matter and that lawyer’s hourly rate. However, the Rules of Conduct that lawyers in New Zealand operate under set out that time spent on a matter is just one of 12 factors that can be taken into account in deciding on a reasonable fee. Those factors are:

  • the time and work spent
  • the skill, specialized knowledge and responsibility required
  • the importance of the matter to the client and the results achieved
  • urgency and any time limitations involved
  • the degree of risk assumed by the lawyer, including the value of any property at issue
  • the complexity of the matter
  • the lawyer’s experience, ability and reputation
  • the possibility that acceptance to undertake the work will preclude the lawyer from engaging other clients
  • whether the fee is fixed or conditional on any outcome
  • any estimate or quote provided by the lawyer
  • any fee agreement between the lawyer and client
  • the reasonable costs of running a lawyer’s practice
  • the fee usually charged in the local market for similar services.

Your lawyer’s hourly rate will generally reflect the level of skill and experience they have acquired. It can be “false economics” to simply choose a lawyer because their hourly rate is lower – they may simply not have the skill level required for the complexity of your matter and they may take longer than a more experienced person to complete certain work thus costing you more in the long run. A lot of firms will use a senior lawyer and a more junior lawyer to complete work on a client’s matter in order to achieve the best costs outcome as possible for the client.

Another option that some firms may offer is a “fixed fee”. Under this arrangement, the lawyer will set out for you what work the lawyer will complete for you and what you will be charged for that work. This provides you with the benefit of certainty about what your costs will be. Just ensure you are aware of what “exceptions” there are to the fixed fee. My firm offers fixed fees for most types of work and has found our clients have enjoyed the certainty of knowing in advance exactly what work they are getting for what price.

You and your lawyer can control what you both do in the process of resolving your matter. You can both work together to try to efficiently and economically resolve your matter. However, there is one important factor neither of you can completely control that has an impact on your costs: the other party and his or her lawyer. You may be faced with delays or difficult, obstructive conduct from your ex partner that are largely out of your control but which have a costs implication for you.

So, how can you best reduce or minimize your legal costs?

My first tip is probably not helpful to those who in the midst of a current separation but if you are not (or, if you are but later enter into a new relationship):  be proactive at the outset and think to the future. If you are embarking on a new relationship, think about the property you each bring to the relationship and take steps to record how you wish to have that property divided between you in the event of a separation or the death of one of you. To do a valid agreement (called a Contracting Out Agreement) will require each of you to receive legal advice but I think of it as an insurance policy –  the money spent on this at the outset is likely to be cheaper than the money you will spend on arguing about these issues in the event of a separation or in the value of assets you could lose if you aren’t protected by a Contracting Out Agreement.

Should you find yourselves separated or facing a family law issue, one of the best ways to save yourself money is to try to work as much out as possible between yourselves. Protracted legal battles will eat up money. If you have a relationship property dispute, be aware that even if you do reach an agreement between yourselves, each of you will need to receive independent legal advice from your own lawyers in order to formalise that agreement.

Collect as much information as possible yourself. You will save yourself a lot of legal costs if your lawyer does not have to seek out the information he or she needs.

Do you actually need a lawyer? The Family Court offers a free referral to counselling for parties who are considering a separation or who have separated and wish to explore any issues about the care arrangements for their children.

Look to alternative methods of resolving your dispute outside of the courtroom. Increasingly, mediation is being used in order to avoid long and expensive Family Court proceedings. In parenting disputes, the Court is now appointing lawyers to mediate a number of parenting proceedings. Likewise, in Relationship Property disputes, lawyers are increasingly seeing the real benefits that mediation can offer their clients in terms of being able to resolve their dispute in a comparatively cost effective and timely manner. Ask your lawyer whether mediation is an option for you.

What if you simply cannot afford legal costs?

You may be eligible for legal aid. Whether you are eligible will depend on your income and assets. Your lawyer should be able to advise you about your eligibility and assist you to make an application for legal aid. You need to be aware that the Legal Services Agency can require you to repay the legal costs it pays on your behalf. If your legal costs were incurred for domestic violence proceedings, you will not have to repay your legal costs.

Another option if you are not eligible for legal aid is to contact a community law centre. These centres are set up for people who can’t afford legal services. Your local Court or Citizen’s Advice Bureau should be able to refer you to your nearest community law centre.

If you want  help with a family law issue, go to www.familylawresults.co.nz.

2 Comments
  1. Just for your information, community law centres are not funded to provide advice on separations and divorces, although they can help for custody issues.

    • thefamilylawyer permalink

      Thanks for your comment Aimee and the clarification. Community law centres in my area also provide advice on adoptions, relationship property issues and guardianship issues. Thanks again.

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