Divorce Blog

The HONEST Going Rate For A Divorce

By Karen Stewart

Several years ago, I had two people come in to see me and had spent $40,000 on divorce lawyers and felt hopelessly lost. In this case, the husband wanted to keep the home. His lawyer sent a letter to her lawyer saying, “we are keeping the home, here is what we think it’s worth.”  How did they come up with their number?  They used the property tax assessment. Her lawyer rejected the value and provided an alternate value to the home. How did they arrive at the alternate value? The client didn’t know.

Canadian MoneyHis lawyer sent a letter to her lawyer and included an appraisal report. Her lawyer rejected the appraisal saying, “I’ve had two appraisals on the same home that are $100,000 apart.  We are getting a second appraisal.” Predictably, his lawyer rejected the second appraisal and suggested a third appraisal report. This time they would jointly pay for the appraisal and then take an average of the three.  Every one of these letters back and forth cost $750 and each appraisal cost $375.  Neither client ever remembers their lawyer asking what they thought the house was worth. In an adversarial system, where there are a winner and a loser, this process makes sense; but it’s also expensive and is often unnecessary.

A typical person beginning a divorce process does not know where to start, how much it will cost, or what to expect when engaging any type of process. When people have spent time working through a process with their lawyers and come see me, they tend to be dug in and will often make two comments: 1) the legal system feels like a giant black hole in which they have no control over the decisions being made. 2) It was a lot more expensive than anybody had imagined.

Each June, Canadian Lawyer Magazine publishes an article called The Going Rate, which describes typical legal fees in different parts of the country. The June 2017 edition examines 2016 legal fees.

I hear people tell me they have spoken with a lawyer who quoted the cost to draft their separation agreement as $2,000. But what about all of the work that goes into negotiating the separation agreement? How much does that cost? According to the legal fees survey, the typical divorce lawyer in Western Canada will charge $16,507 per spouse in billable hours to negotiate the separation.  You will then pay your lawyer another $2,795 to draw up the child custody and support agreement, $2,390 for the separation agreement, and $2,085 for the divorce application. An Edmonton Divorce Lawyer will typically charge you their hourly rate for every phone call, email, question, or comment; you may even be charged to ask questions about your bill.  According to Canadian Lawyer Magazine, an Edmonton Divorce lawyer will typically bill $21,539.50 per client or $43,079 per family. In addition, you might also pay professional consulting fees for psychologists, mediators, actuaries, appraisers, and accountants. Assuming your lawyer is charging $325 per hour, the real-time cost is $5.42 for every minute you are on the phone. It is no wonder that 60% of Canadians try to self-represent while going through a divorce.

On the other hand, there are also services claiming that they can mediate your divorce for $1,500, or less. Unfortunately, you are largely left on your own to navigate an extremely complicated system.   Often these mediator reports are vague and demonstrate a lack of experience surrounding significant issues.  I recently sat with two people who had previously hired a low-cost mediator to negotiate their separation agreement.  When they took their mediator’s report to their lawyer for Independent Legal Advice, the lawyer identified numerous overlooked issues and called their hard work, “useless.” When I began asking basic questions I discovered their previous agreement missed properties, bank accounts and a pension.  Divorce can be complicated and you will need an expert to ensure that you are asking the right questions.   Yes, the price of a low-cost mediator is appealing, but we need someone to guide us through this very complex maze.

Certainly, there must be a high value, less expensive option. Someone who will ensure that the difficult questions are asked and who will walk you through a process, ensuring that you have a robust plan without charging you $5.42 per minute.  Fairway Divorce Solutions provides a step-by-step process that is a much less expensive alternative to the traditional adversarial system and will guide you through your divorce from start to finish. Your Fairway negotiator will work closely with you and your spouse to ensure that you have had the opportunity to fully address the issues that matter most to you.

Fairway Divorce Solutions will charge a fixed fee, which will be determined during the initial consultation and is based on the complexity of the case. Fairway costs on average 50-60% less than traditional litigation per person to complete a settlement and will typically charge between $3,000 and $8,000 per spouse.  Many cases are charged less than a typical retainer fee.  If you have questions about how Fairway can help you and your spouse navigate your separation/divorce, please contact us at 1-866-755-3247.