Divorce Practice--Money Issues.

• Author: Barson, Kalman A.

This is the first article in a series on divorce practice engagement issues.

Let's face it, as much as we may all like the challenges of divorce work, we are in it to make a living. Therefore, we need to intelligently address the myriad of financial issues relevant to divorce practice.

Retainers for divorce services

A basic rule is you do not take on a case--you do not even begin work on a case--until you have the retainer check, along with the written engagement agreement, in hand. Frankly, this concept is not a bad idea to apply across the board for all kinds of accounting services. However, the reality is that our profession has a long way to go before a retainer for a routine, repeat client is generally accepted. However, for special assignments for one-time clients, in doing litigation work, retainers are the norm: They are expected, and you should not leave home without one. Don't rely on assurances that the money will be forthcoming shortly, and don't invest your valuable time for a client who, outside of this litigation, has no relationship or involvement with your office. You are being asked to take on a more-difficult-than-average assignment for a client with whom you have no relationship, in a situation where fees can build up rapidly. Furthermore, if you are representing the nonbusiness or nonmonied spouse, the unfortunate reality of divorce practice for accountants in many areas is that, after the retainer, there may be a long dry spell until you receive another payment.

How much of a retainer to ask for is another issue, one that often depends on your specific market, what your peers are charging, what your experience and reputation are, and perhaps even how much you really want that case-and along with that, how much you are willing to risk not getting paid anything else. I am not aware of any hard-and-fast rules in terms of determining the retainer amount, but it is not unreasonable to expect two to three days of partner time to be paid up-front. Unless you are either a trailblazer or looking to achieve a high volume of low-billed write-offs, for the most part you should probably keep to something in the vicinity of what the going rate is in your business community.

The concept of a retainer needs to be a flexible concept. For instance, you might establish a standard base retainer for a typical divorce case. However, if extra complicating issues come to your attention in the round of qualifying questions that go into your determining whether to accept this case, you need to evaluate the situation before you commit to a figure. You may then need to call for a greater retainer. We find that increased retainers are generally required for cases where there are cash businesses, multiple businesses, or complicated businesses, or where multiple valuation dates are involved. In addition, you might consider larger retainers when the time frame is short, the client already has a reputation for changing professionals, or perhaps the nature of the work is such that not only will significant time be required, but it will be disproportionately partner time.

All that being said, under what conditions or situations might you consider accepting...