Who Covers Legal Fees in Divorce: The A to Z Guide

Getting to Know Legal Fees in a Divorce

"The following are legal fees that divorcing spouses typically incur after they file a complaint for divorce. If you are able to resolve your case amicably, you may be able to avoid some of these fees."
It’s important to understand that some of these fees are unavoidable costs, such as the filing fee. Other costs, which derive from the back and forth of hiring experts to evaluate assets or issues such as custody and alimony, you should avoid at all costs. You want to rely on an expert once instead of bringing in lots of different experts who don’t always agree with one another, and forcing your attorney to update and refresh their opinions on an ongoing basis. An experienced family lawyer who is familiar with the process and the law can save you money in fees. He or she can save you time by knowing when to retain an expert and when you can live without one. They can also save money by being able to settle quickly because they know how likely it is that your case will go to court and what the likely outcome would be. When litigating cases in court, there are mandatory court fees your attorney will charge, including filing fees, deposition fees, motion fees, expert fees, court reporter fees, court appearance fees, and fees to review or prepare further documentation such as an interrogatories or a case information statement. A typical fee structure includes a retainer, which is a specific amount of money that you would be responsible for . For example, a $5,000 retainer fee might be charged for a divorce action. Your retainer will be maintained in escrow by the law firm and can only be used for work on your case any time an attorney spends on your matter, whether it’s reviewing a document or appearing in court, will be billed against the retainer. Once the retainer is depleted, actual work on your case is billed at a set hourly rate. Often, attorneys offer a discount to the client for the hours that are billed, depending on the retainer balance, but the retainer will need to be replenished in order for your lawyer to continue to work on your case. There can be other fees added onto your base retainer as well if your case requires testifying or testimony. For example, if your case settles out of the courthouse, you won’t be charged for court appearances. But if a court appearance is necessary, you will be charged a court appearance fee in addition to the fees accrued. Extraordinary requests for emails, reviewing documents, and conferences outside of the usual meeting with your attorney may result in additional charges. A fee will also be charged for reviewing or preparing correspondence, communicating with experts, research and travel. If you hire a law firm for additional services, such as estate planning or business sales, you will have to pay a separate retainer or minimum fee for those services. Profits earned from these extra services are not included in the law firm’s retainer.

How Who Pays Legal Fees Varies

In New Jersey, entitlement to legal fees and the amount of any award is addressed at the sole discretion of the family law judge. That being said, there are a number of factors that can weigh into the ultimate decision as to who is responsible for payment. Those factors include:
The Courts retained jurisdiction to address legal fees in almost every case: "The Family Part is empowered pursuant to R. 1:10-3 to require one party to pay the counsel fees of another in any original action in the family part." Smith v. Smith, 72 N.J. 350, 356 (1977). The previous Court Rules have now been codified by statute as follows: "In any action in the Superior Court for divorce, dissolution of civil union, or termination of domestic partnership, or for alimony, maintenance or equitable distribution of property, any party shall be entitled to an order requiring a different party to pay during the pendency of the action, some or all of the attorney’s fees, costs and disbursements incurred in the litigation, as the court finds reasonable". N.J.S.A. 2A:34-23.
New Jersey has codified the factors that weigh into the decision. The statute, N.J.S.A. 2A:34-23(b) states: "In determining the amount of an award of counsel fees, costs and disbursements made pursuant to subsection a. of this section, the court may consider… [t]he nature and responsibility of the litigation; [i]f the suit was prosecuted in good faith; [t]he amount involved in the controversy; [t]he financial situation of each party; [t]he ability of a party to pay his or her own fees and costs, of independently utilizing a resource for a legal consultant; [d]etermination of the entire financial circumstances of the parties; [o]ther factors the court may deem relevant.
If there is an agreement as to payment: It is common that parties agree to pay their own attorney’s fees. Parties are encouraged to have the agreement or Order recording the attorneys’ fee agreement so that it can be incorporated into the Judgment of Divorce as that is the contract between the parties.
What if mediation is not successful? If mediation is not successful, the parties still have the right to request counsel fees from the court. In fact, if fees are requested following the filing of the divorce complaint, it is customary to request counsel fees for the preparation of that motion as well.
Formal discovery requests can be burdensome. However, once a case goes into the litigation process, the parties can seek formal discovery from one another. This enables the parties to obtain a better picture of the other party’s income and assets. The family court will not enter an order awarding counsel fees based solely on a party’s testimony during case management conference proceedings. Counsel fees will generally not be ordered without proofs.
The parties’ income can influence their ability to pay and who pays: A party with a higher income and greater assets is more likely to be ordered to pay the counsel fees of a lower earning spouse.
Other than litigation, what if there is no agreement? There is nothing that prevents a party from simply requesting a fee award of the basis of the facts set forth above. The Court can make findings both in favor and against either party.

State Rules and Case Law

The allocation of legal fees in modern divorce cases is governed by the American Bar Association Model Rule of Professional Conduct 1.5, adopted in most states, which provides that "A lawyer shall not make an agreement for, charge, or collect an unreasonable fee or an unreasonable amount for expenses." Recent years have seen growing role of technological innovations, such as flat fees and limited scope of representation, which can cut costs substantially from conventional models of practice.
While technology has the power to transform the practice of family law, state specific laws shape the legal landscape for allocation of fees in divorce cases. For instance, Texas Family Code § 6.708 provides that "a court may award a spouse reasonable attorney’s fees in a suit ______." In determining the reasonableness of attorney fees, the following factors are considered: (1) the nature of the services, (2) the necessity of the services, (3) the amount of time spent, and (4) the reasonable fees for similar services by similar attorneys in the community in which the proceeding is pending. Similarly, New York Domestic Relations Law § 237 provides that in a matrimonial action the court may direct either spouse in its discretion "to pay to the other spouse the sum that is just and proper, having regard to the circumstances of the case and of the respective parties and the nature of the action and the relief granted therein, as appears from all the circumstances of the case whether or not the division of the marital property is equitable and whether or not a protective order of supplemental relief is granted." While not determinative of legal fees, courts consider several factors in determining the reasonableness of the total fee awarded: (1) the difficulty of the matter, (2) the professionalism displayed by counsel, (3) the respect and attitude of the paying party towards the legal system, (4) the difficulty in collecting the fee, and (5) the resources of the nonpaying spouse. Similarly, New Jersey Rule of Court 5:3-5(c) provides that "the court may in its discretion direct either party to pay a reasonable sum for the cost to the other party of maintaining or defending any litigation during the pendency of the proceeding, including litigation during the pendency of custody litigation." In determining the reasonableness of attorney fees, courts consider (1) the ability of the parties to pay, (2) the nature and extent of the services rendered, and (3) the responsibility of the parties for each other’s case. Standards of the profession must be recognized as a limit on the court’s discretion. In California, Family Code § 2030 provides that the court "shall ensure that each party has sufficient access to the other party’s or marital property and the ability to retain an attorney to preserve each party’s rights by ordering one party to pay to the other party either: (a) an amount reasonably necessary for the attorney’s fees and costs. . . paid either from the party’s separate estate or from community property, or (b) to assign to the other party community property in an amount reasonably sufficient to pay for legal representation for the party." Courts consider numerous factors in determining the reasonableness of attorney fees: (1) the necessity of the attorney fees, (2) the reasonableness of the fees, (3) the ability of the supported spouse to pay and to seek legal representation, (4) the relative financial circumstances of the spouses, (5) the relevant facts and circumstances of each case.

Settlements and Bartering

The parties to the divorce or a third party may also come to a mutually agreed settlement about one party being responsible for the legal fees of the other party. This may be a benefit to settling the divorce that is offered to one party in order to encourage them to sign off on an agreement, such as when the other party is giving up the home in which the other party wishes to remain. Or perhaps the parties realize that they have spent so much money on litigating the case that they would prefer to settle rather than paying still more in legal fees. Parties may also reach a mutual agreement that each will pay their own legal fees given the need to preserve their liquid assets for the divorce, for example, if there was a large premarital asset that one party brought into the marriage.
When the parties to a divorce come to an agreement as to who will pay the legal fees, it is best to have the agreement in writing and filed with the divorce action so that the court has proof of their agreement that is enforceable by contempt. A judge will be guided by the agreement of the parties and may make a finding of contempt against a party who breaches the written agreement to pay the legal fees of the other.

Mandated Payments to Lawyers in Court

Courts also have the power to order one spouse to pay some or all of the other spouse’s divorce-related legal fees. The judge might make this order if he feels that one spouse’s conduct financially disadvantaged the other spouse. For example, in Richardson v. Richardson, 194 N.J. Super. 207 (App. Div. 1984), a trial court ordered the husband to pay $17,500 of the wife’s fees because the husband had depleted marital assets. The money was intended to provide the wife with, as the trial court stated, "an equal start along the road to financial independence[.]" The New Jersey Supreme Court later affirmed this decision in the appeal following the wife’s trial loss.
Courts have discretion to order one-sided interim awards, but that discretion is limited by certain considerations. First, there is a presumption that spouses will share equally the obligation to pay for legal fees and expenses. The court can only order one spouse to pay the legal fees of the other spouse if it finds that doing so is fair and just under the circumstances. In determining whether an award is fair and just, courts will consider:
Next, one-sided interim awards are rarely appropriate in cases involving a "relatively short marriage." This does not mean that the marriage must have been very short in order to qualify as a relatively short marriage (short marriages have included ones which were as long as 6 years). However, courts will often deny requests for interim awards in short term marriages even when there are significant property or support claims at issue. For instance, in Steneken v. Steneken, 183 N.J. 290 (2005), the New Jersey Supreme Court found that a court erred when it awarded the wife $35 , 000 in pendente lite fees after the parties were married for 6 years. The Supreme Court determined that even assuming that the wife lacked the funds to retain counsel, her claims did not create an ongoing need for her to receive a one-sided interim award. In Steneken, the wife could afford to pay 55% of her counsel fees and she requested a grant of 45%. Given that the husband was contractually obligated to pay the wife 50% of his bonus compensation, and that her claim to alimony would be as an economically dependent spouse, the court required the wife to pay 55% of the fees. The Steneken court also determined that the trial court could not just look at the length of the marriage and then decide to award one spouse fees. Still, the court stressed that it believed that the justification for a one-sided interim award should decrease as the relationship between the parties lengthens, so that a "60/40 division is the level of imbalance required to presume that the entirety of the litigation costs should be borne by one party[.]" The court further qualified its language, limiting the 60/40 rule to situations where the couple’s claims and defenses are without merit. In addition, the Steneken court stated that it could envision one spouse receiving 63-67 percent of the legal fees for complex financial issues. While a spouse may receive 65-70% of the fees to cover matters relating to equitable distribution and alimony, as well as reasonably related discovery disputes in the same proceeding, the more serious the matter, the more necessary it is for a spouse to have independent counsel. Consequently, in matters as complex as those in Steneken, the husband was potentially entitled to counsel himself.

Help and Legal Aid for the Poor

Financial aid assistance is available to help people with less means pay for legal representation. Many states have legal aid agencies that help people in divorce or related family law matters that do not appear to have merit, but the person cannot afford to pay a lawyer, or afford to pay a reasonable retainer. For example, a person who is clearly the victim of domestic violence, or is facing contempt for failure to pay child support should have representation. If they do not already have a lawyer, they may apply to their local legal aid agency for assistance.
There are also programs such as America’s Law Enforcement Family Support Program that operate along the same lines and provide support for families in emergencies such as a sudden death or incapacitation who may require some financial assistance.
Law schools sometimes offer legal clinics, run by students under the supervision of a licensed attorney. Such programs may be limited to specific types of family law issues, or may only operate part of the year. Many law schools have summer programs where law students can work in family law offices, providing an opportunity to assist with a variety of types of client matters under supervision.
Finally, judges may appoint a court-appointed counsel for parents with children facing termination of parental rights, or other family law matters where limited financial assistance is needed to provide representation, or to promote due process.

How to Handle the Cost of Legal Fees

When it comes to managing the costs associated with divorce there are a number of practical steps that a client can take to limit their exposure. One of the most important elements to cost effective representation is for a client to be fully engaged in the process. This means being available to provide information and documents to the attorney, staying organized on your end, and working towards an amicable resolution.
Engage in a Dialog with Your Lawyer
Your lawyer is an expert who has the tools and resources to provide you with a cost effective strategy tailored to your specific situation. That being said, in some situations there may be two sides to an issue and thus your lawyer may form a certain opinion from the outset of a case. Your attorney should keep an open mind as new information emerges throughout the case and should always keep your best interest in mind . It is imperative that you be forthright with your lawyer, as incomplete or untruthful information can result in a waste of time, money and ultimately your credibility in court – whether or not you have something to hide.
It is also important to discuss legal fees with your lawyer. Who will be responding to your emails and phone calls? How quickly will they respond? Is there a paralegal or assistant working on your matter? If so, what is their hourly rate? Being proactive and understanding the relationship between your needs and the legal fees will alleviate future anxiety and misunderstandings.
Campbell Durrant closely reviews all invoices and billable hours prior to sending out to our clients. We understand that divorce can be an emotionally and financially draining undertaking. We are motivated to find a successful and expedited resolution for our clients and to do so in a cost effective manner.