Once the decision is made to divorce, one of the first questions people ask is – how do I pay my lawyer? Contingency fees are not permitted in family law matters in New Jersey. Thus, in divorce matters, the parties generally each pay a retainer fee to their respective attorneys to begin the divorce process.
What is a Retainer?
A retainer is an advance payment to secure, or “retain”, the services of an attorney for a particular legal matter. A retainer is generally based on an estimate of the amount of time an attorney believes he or she will need to begin your case. Since attorneys bill on an hourly basis, a retainer is basically an advance to pay for a certain number of hours of the attorney’s time.
Retainer payments are placed in an escrow account or client trust account to keep the monies separate from the lawyer’s (or law firm’s) funds. The money is withdrawn as the lawyer completes legal work on the case. Clients will receive an accounting, usually monthly, stating the details of the work performed and the amounts paid out of the retainer, as well as the balance remaining.
Costs are separate from attorney fees but will also be charged against the retainer. These are charges to be paid to the court for fees related to filing your case and to others, such as experts or custody evaluators. Costs may also include appraiser fees, photocopying, postage, service of process charges, and courier services, as well as other fees.
Often, a retainer will not cover the entire cost of your case and more funds will need to be deposited as the divorce proceeds.
What if One Spouse Does Not Have Funds to Pay an Attorney?
In New Jersey, each party is entitled to use marital funds to litigate a divorce. The Court may direct the parties to sell or mortgage assets and property to the extent necessary to permit both parties to fund the litigation.
Further, a party may file a motion requesting that his or her attorney fees be paid by the other spouse. The Court may order the spouse who has more income or assets to pay for the other spouse’s attorney, in whole or in part. This puts spouses who are not on equal financial footing on more equal footing in terms of the divorce litigation process.
To make the determination to award attorney fees to one spouse, the Court considers the financial circumstances of each spouse as well as good faith or bad faith of either spouse before and during the trial. Bad faith becomes a factor if one spouse takes such actions as draining the marital bank accounts, unnecessarily prolonging the case or violating court orders – for example, a court order to pay child support.
The Court may order one spouse to advance the other spouse’s attorney fees at the outset of the divorce. Alternatively, the court may order reimbursement of one spouse’s attorney fees by the other spouse during the proceeding or after the divorce is concluded. Attorney fee awards in civil family actions are governed by Court Rule 5:3-5.
Rule 5:3-5(c) and Attorney Fee Awards
Rule 5:3-5(c) provides the Court may award attorney fees based on the “prospective services likely to be performed and the respective financial circumstances of the parties.”
In determining the amount of the fee award, the court shall consider:
- the financial circumstances of the parties;
- the ability of the parties to pay their own fees or to contribute to the fees of the other party;
- the reasonableness and good faith of the positions advanced by the parties both during and prior to trial;
- the extent of the fees incurred by both parties;
- any fees previously awarded;
- the amount of fees previously paid to counsel by each party;
- the results obtained;
- the degree to which fees were incurred to enforce existing orders or to compel discovery; and
- any other factor bearing on the fairness of an award.