A Simple Guide to your Payment Options
The Judicial Council survey from 2016 found that the average California litigated divorce through trial costs $95,000. Even among cases that settle before trial, a simple internet search will predict the cost of a litigated divorce in California as $40,000 – $50,000+, depending on your situation.
Conversely, an average mediated divorce will cost between $5,000 and $15,000.
Whether your divorce cost lands at the high or low end of these estimates, coming up with the money can be challenging. Part of determining which divorce professional to hire includes considering the payment options offered.
The three most common payment options are: Upfront, Pay-As-You-Go, and Fixed Fee. Determining the best option for you greatly depends on the complexity of your divorce and your financial position.
An upfront retainer is the most common attorney retainer payment option. This retainer option (also known as a ‘work for hire’ contract) is an advance payment made before the legal work is provided. The retainer money is held in an account that the firm draws upon, generally monthly, as time and expenses are used.
The hourly rate charged is disclosed and agreed upon when the client signs the retainer agreement before work begins. Once retainer funds are used, the firm generally requests the retainer be replenished before additional work is completed.
When signing an upfront retainer, check your retainer’s clause regarding unused funds. Some retainers include a “non-refundable” clause which means that once your case is completed, any remaining funds in your account will be retained by the firm.
Upfront Retainer example: Client(s) agrees to an advance retainer deposit of $5,000 paid with the execution of this agreement and further agrees to replenish the retainer with a $1,500 payment when the retainer balance reaches or is less than $1,000. Any unused funds at the end of the matter will be refunded to client(s) within 30 days.
Pay-As-You Go Retainer
A pay-as-you-go retainer requires a payment authorization in lieu of paying an upfront retainer. As with the upfront retainer, hourly rates are disclosed and agreed upon when the client signs the retainer agreement before work begins. Clients are generally given an opportunity to review the monthly bill at the end of the month. If there is no charge dispute, the unpaid time and expenses incurred are auto charged to the card on file during the first few days of the next month. In this model, clients pay only for the services used during the previous month.
Pay-As-You-Go Retainer example: Attorney does not require an advance retainer. Client(s) will be charged for professional time expended. Client(s) agrees to provide a valid card and to maintain a $2,000 minimum available to pay for legal services. Client(s) authorize firm to charge card on file and to be fully paid for the full amount of bill for legal services and expenses each month and for full payment of the final bill.
Fixed Fee Retainer
Under the fixed fee (also known as flat fee) retainer option, a fixed amount is paid by the client upfront and covers all the work to be performed (generally all court paperwork and filings, meeting and phone contacts). This option is most often available for uncontested divorces or where there are a limited number of complicated circumstances. The pricing is based on how much time the firm can reasonably expect to spend on a case and incentivizes clients to efficiently stay on track with their goals. Be sure to understand what the retainer covers. Clients can expect limits to be set in areas such as:
- Number of meetings
- Number of phone calls
- Number of document draft revisions
Additional time will result in additional fees. These additional fees should be outlined in the retainer agreement.
Fixed Fee Retainer example: Client(s) agrees to pay a flat rate of $5,000 plus court fees for legal services provided by the firm. Additional time and expenses may be required to complete client(s)’s case. The following list of items are included in the Fixed Fee Service…
No two divorces are the same and your divorce cost will depend on many factors. Many firms offer a free case assessment consultation for you to discuss the complexities of your situation and the process options available to you. At the consultation, request an estimate of the overall timing and cost of your divorce.
Remember that the true cost of a divorce is hard to measure. To be certain, stress, anxiety, and conflict are unfortunate realities of divorce. Choosing the correct process and payment option can reduce these negative costs.If you’d like more information on the Family Peacemaker retainer options, contact us to schedule a free, one-hour case assessment consultation. For additional information on your divorce process options, click here. We offer upfront, pay-as-you-go, and fixed-fee mediation family law retainers to families in Anaheim, Irvine, and throughout California.