New York Divorce and Family Law Blog : New York Divorce Lawyer & Attorney : Clement Law Firm : Family Law Serving Manhattan, Westchester County, Brooklyn, Queens, Bronx, New York City

When an action for a divorce is commenced, it is often the case that most of the marital assets available for the payment of legal fees are possessed or controlled by one of the spouses, usually the husband. In order to ensure that the parties will have equal access to skilled legal representation, the Domestic Relations Law authorizes awards of interim counsel fees to the nonmonied spouse during the course of the litigation. Because of the importance of such awards to the fundamental fairness of the proceedings, we hold that an application for interim counsel fees by the nonmonied spouse in a divorce action should not be denied — or deferred until after the trial, which functions as a denial — without good cause, articulated by the court in a written decision.

So reads the first paragraph of the Appellate Division decision in Prichep v. Prichep, which offers a primer on interim awards of counsel fees in divorces.

In Prichep, a wife with an annual income of only $4,000, sought an interim award of attorney’s fees from her husband, a cardio-vascular surgeon, with an annual income in excess of $400,000.00.  By the time of this application, she had already owed her attorneys more that $159,000.

As the court explained, an award of interim counsel fees ensures that the non-monied spouse will be able to litigate the action, and do so on equal footing with the monied spouse. This award may be:

appropriate to prevent the more affluent spouse from wearing down or financially punishing the opposition by recalcitrance, or by prolonging the litigation'" If the playing field were not leveled by an award of interim counsel fees, "a wealthy husband could obtain the services of highly paid (and presumably seasoned and superior) matrimonial counsel, while the indigent wife, essentially, would be relegated to counsel willing to take her case on a poverty basis.

The Court was sensitive to the disparity in the Pricheps’ financial resources. The wife had incurred large legal bills that she would never be able to pay without exhausting all, or most, of her resources. The husband, on the other hand, was able to pay his legal fees without any substantial impact upon his lifestyle.

The Appellate Division recognized that deferring the award of attorneys’ fees until the final resolution of the case, could compromise the non-monied spouse's ability to adequately litigate. How long can an attorney be expected to work without being paid? Absent an ability to pay, certain theories of prosecuting or defending a case have to be abandoned, giving the wealthy spouse an unfair advantage.

Indeed, until this court’s ruling, Mrs. Prichep’s attorneys had to decide whether it was better to: 1) withdraw because their client could not pay their bills, 2)continue to represent their non-paying client, run up a large bill, and gamble that the court would grant them their fees at the conclusion of the litigation; or 3) simply to work for free. Mr. Prechep’s attorneys, on the other hand, would, in all probability, be regularly paid in full.

Fortunately, the Court realized, this just would not be fair

• Email This
• Print
• Comments
• Trackbacks

Benjamin Stevens offers a thoughtful series of articles on why attorneys and clients benefit from fixed fees in a divorce action.

Some of the benefits cited by Stevens are:

•Clients know the total cost up front, which enables them to determine prior to retaining the attorney whether or not they can afford his/her services and to budget for the attorney's fees and costs.
•Clients have another basis upon which to compare attorneys, both in the manner they charge for their services (fixed fee vs. hourly) as well as the amount charged ($X vs. $Y).
•Clients never end up in fee disputes with their attorneys, because all fees were negotiated and agreed upon before the representation began.
•This method encourages open communication from the client to the attorney. In hourly billing situations, clients sometimes hesitate to provide information to the attorney because they know that they will incur fees and costs for doing so.
•Clients have a higher level of trust with their lawyers, which results in a better working relationship, which frequently yields better outcomes in the clients' cases.
While a flat fee may be appropriate in a matter where the legal representation is somewhat limited in scope, for instance, representing a litigant in an uncontested divorce. At flat fee may be inappropriate in a litigated matter or in a case where the issues will have to be extensively negotiated.

Too often, and particularly in matrimonial mattes, parties take irrational and economically untenable positions fueled by emotions. In the worst cases, parties, left to their own devises would fight about assets with no value. The billable hour is one mechanism of bringing a litigant back to realty. A gentle reminder that cost of litigating about a particular item exceeds the benefit to be achieved oft reins the client in.

In fact, a client who paid his attorney a flat fee has absolutely no incentive to give up the fight and every incentive to assert a position “on principle.” After all, in the case of a flat fee, the legal bill is the same whether or not you prevail. 

I would expect an attorney, working on a flat fee in a contested matter, to price into his fee the potential for a client to act irrationally and to set the fee on the high side. On the other hand, I have heard lots of complaints about attorneys who do not return clients’ calls (I understand this to be the leading cause for attorney disciplinary action) - maybe these are the attorneys that charged too low a flat fee.

• Email This
• Print
• Comments (1)
• Trackbacks (1)