July 31, 2010 (Original publish date) • By Dennis Beaver
California Superior Courts report that an incredible 90 percent of divorces are now being handled by at least one of the parties without a lawyer, in Pro Per. Frequently cited reasons are that we are too expensive and often drag cases out just to run up the bill.
Having practiced family law for over 20 years, and for some reason never asked to become a member of the “Good Ol’Boys and Girls You Scratch My Back and I’ll Scratch Yours Divorce Lawyers Club,” I am in a good position to agree with the following statement:
“There never was a justification for the outrageously high hourly rates we had been demanding. Also, the conflict of interest between client and attorney in divorce is enormous. What’s financially good for our clients – a speedy, fair resolution – is bad for our bottom line. And when clients run out of money, cases suddenly get settled,” maintains a colleague who is a certified family law specialist, in practice over 30 years.
“The battle for paying clients – that 10 percent who have money for a lawyer – is as fierce as anything you can imagine in the business world. If I didn’t have my Air Force retirement, I’d be in real trouble!” he added.
With that as our background, Hanford readers Ron and Peggy’s story is a textbook example of just how bad it gets and a look at some of the warning signs.
Am I my lawyer’s retirement fund?
“Something has really been bothering me about my divorce lawyer. I am wondering if he considers me as his retirement fund. In fact, in talking to my wife, Peggy, about this, we wonder if both attorneys look at us as Mr. and Mrs. Santa Claus!”
“The only thing that she and I have been able to talk about recently without getting into an argument is just how much this divorce is costing us. We are both teachers, earning the same income and are paying our lawyers individually, so this is truly shared pain. In an odd kind of a way, these unending attorney fees and constantly going back to court have now forced us to question the legal advice we’re given,” he wrote.
“We will be in Bakersfield for a business matter, and would really enjoy dropping by and discussing this with you. I think there is a story here and a way to help others avoid what happened to us. Thanks. Ron.”
As soon as his e-mail came in, I phoned Ron and asked if we could get his wife on a conference call. Shortly the three of us were comparing notes. When they gave me their lawyers’ names, it was deja vu all over again. “You have two attorneys who deserve an Academy award in the category of creative, excessive and unconscionable billing practices,” I stated to a clearly fuming, now closely allied couple in the middle of a drawn-out, unjustifiably expensive divorce.
I asked them to scan and e-mail everything they had, whatever their lawyers had sent them, and especially the retainer agreements, but I had just one more question that I needed answered: “At the beginning of the divorce, what was the fight all about?”
Their answer floored me. “We both came to the lawyers with an agreement all worked out, and it was they who insisted on turning this into a monster!”
Clear evidence of violating the law
Beginning with the retainers the couple signed, and carrying right through the paper trail, this divorce was one of the most glaring examples of “churning” that I have seen. What should have been an extremely simple divorce was artfully converted into something that I can only describe as sick. For one of the lawyers, it began with his retainer agreement.
Anytime a case will likely cost more than $1,000, California law requires a written agreement. Until the lawyer actually performs services, any money paid must be deposited into a client’s trust account. It is not the lawyer’s money until earned. It cannot legally be deposited into the lawyer’s general account.
Yet, one of the retainer agreements stated that all funds will be deposited into the general account and may be used regardless if services have been performed or not!
Both retainers listed hourly billing rates, yet stated that all monies paid are “non-refundable.” This is absolutely wrong and has gotten more than one attorney in trouble with the state bar!
When a lawyer is billing on an hourly basis, any unused funds must be refunded to the client. Both of these guys had the nerve to state in bold letters, all fees paid are non-refundable.
But things got even more interesting, as you’ll see next week.
Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.