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Divorce Mediation Blog

What's In a Retainer? A Cautionary Tale

Wednesday, March 05, 2014

We were recently surprised by a client's statement she thought that a retainer is non-refundable. Our response was easy. The Massachusetts rules that govern the practice of law make clear that non-refundable retainer is an oxymoron. Retainers are advance payments that may be used to fund future services, with any unused portion refunded to the client. Isn't this something that lawyers have known for decades? Maybe not.

Lawyers Weekly recently reported that an attorney represented a criminal defendant and lost big when the client sued for what he alleged was an over charging: $120,000.00 for a case that resulted in a continuance without a finding. While the lawyer tried to characterize his initial $40,000.00 fee as part of the larger "flat fee", the judge whose jury found in favor of the client, re-branded the payment as a non-refundable retainer. The result: a $90,000.00 finding of unreasonable fee, tripled for consumer protection violation, and inflated to nearly a half million dollars, with accrued interest.

What was he thinking? The fundamentals of a retainer are long-known. While this already suspended lawyer may not be a reasonable measure of normal, we have to wonder how many lawyers engage in unethical billing practices because they do not know better? Even worse, are there some who do it purposefully because of the long odds of being caught?

There is nothing wrong with a retainer. If properly explained, it provides client commitment, a certain level of security and cash flow reliability in a field where "what have you done for me lately?" is a common lament. We use small retainers to fund work that occurs outside of our divorce mediation sessions, such as session summaries and agreement drafting. We explain how they work to clients up-front, and no one has yet declined.

The recent case tells us that all we need to be even better at explaining our retainer practices. For firms in which large retainers are the norm, this need is magnified. In divorce and family law, all new clients share some level of vulnerability, and many are prone to re-interpret their relationship with counsel when the need for services abates, especially if the results have been disappointing (as they often are). Ethics and fairness aside, our reputations and ability to earn a living depend on it.

 

DIVORCE MEDIATION: WHAT’S A LAWYER TO DO? Part 3 (Lawyer-Attended Mediation)

Wednesday, February 20, 2013

Lawyers who are representing clients in divorce mediation, sometimes for the first time, ask divorce mediators: what are we supposed to do? We introduced this subject in our last two entries, including specific attention to lawyer-assisted mediations (where one or both parties have consulting counsel who do not attend mediation sessions) in Part 2.

Here, we discuss the role of counsel in lawyer-attended mediation. A lawyer-attended mediation is one in which clients have counsel with whom to both consult before and after divorce or other family law mediation sessions, but who also attend the divorce mediation sessions with them. In addition to fulfilling the traditional roles as educator, and counselor (as considered and described in Part 2), these lawyers also play a direct role as negotiator for the client. But how is this role different in lawyer-attended mediations, as compared with litigation or traditional lawyer-led negotiations?

First, despite counsel’s presence, divorce mediation is intended to be a client-centered process. Knowing, voluntary deals with which both parties can live remain the goal, and attending counsel must acknowledge this critical focus. Hard advocacy for extreme positions or distinct one-party advantage is out-of-place and counter-productive.

Second, counsel attends to be supportive and encouraging of the client’s self-expression, as part of a collaborative team with the client. The concept of a client remaining silent while his or her advocate articulates a sophisticated and perhaps polarizing position on his or her behalf is inconsistent with the parties’ intention to speak, as indicated by the choice of mediation. Counsel need not be mute, but the lawyer-attended mediation that works best is one where lawyer and client negotiate a balance in speaking roles, supporting and reinforcing each other. The client needs to “be heard” in mediation, and develop a rapport with the divorce mediator, a process that is stunted by consistent silence. Technical competence and subject matter expertise will guide counsel nicely is determining how much or how little he or she ought to be heard. The lawyer’s support, emphasis and correction are invaluable, critical to the client’s comfort and essential to the mediator’s understanding of facts and interests.

Third, counsel needs to resist the temptation to use loaded words and phrases, especially when working in joint session. Language that promotes hardened positions, and harder feelings, is inconsistent with the search for common ground. Divorce Mediation is not meant to be a different forum for litigation: it is a new place for a different kind of discourse. There will be plenty of time and opportunity for personalized advocacy if the mediation fails; but its presence in the mediation room will only hasten that day, with one more painful failure in the parties’ memory bank.

Fourth, compromise is the order of the day. Family law matters are rarely zero sum. The search for openings, trade-offs and pie – expanders is dynamic. It is encouraged by candor, and it is undermined by rigidity. Divorce counsel needs to support the client in critical listening to the other party, to his/her lawyer and to the mediator; and to maintaining an open mind. Far more often than not, reasoned compromise will solve the matter if the parties stay flexible and open.

Fifth, patience is more than a virtue. Divorce mediation does not succeed without it. The process requires confidence building, across and around the table. This is often the parties’ first opportunity for open communications, shielded by confidentiality, and bounded by reasonable etiquette. When the parties feel comfortable, confident in the divorce mediator’s impartiality, knowledge, judgment and “people skills”, and convinced that the opposing party and counsel are serious negotiating partners, real negotiations ensue. Impatience – cutting to the chase so to speak – can subvert this process fatally.

Sixth, counsel needs to be frank with his or her client. Cost-effectiveness and “BATNA” reminders when timely made are critical. In other words, “If we don’t make a deal here, court will cost $X and the likely outcome will be Y.” Without this context, the client lacks true parameters. Stepping back and examining the actual dollars at issue in a particular aspect of the negotiation often reveals that it is just not worth the fight.

Finally, the divorce lawyer needs to realistically assess the client’s true bottom line. Simply saying “no”, or labeling a truly last and best offer for what it is, after allowing the process to work reasonably, is part of every lawyer’s job: no less so in mediation. The process is purely voluntary, and a client deserves counsel’s absolute candor when he or she feels that the process is spent.

 



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