The spiralling cost of HNW divorce - Spear's Magazine

The spiralling cost of HNW divorce

The spiralling cost of HNW divorce

Finding the right solicitor is the number one priority for both sides of a HNW divorce, according to the Spear’s 2022 Family Law Survey. Regardless of your wealth, part of that equation is cost.

In April, Justice Mostyn called for a cap on spending after presiding over a case in which the parties had racked up £5.4 million since the husband filed his petition.

Lawyers’ runaway fees are nothing new. Charles Dickens poked fun at the phenomenon in his 1852 novel Bleak House, in which two barristers prolong the legal wrangling until their fees absorb the value of the property in dispute, at which point the matter is declared moot.

While other areas of the law have developed new ways to charge for their services such as ‘no-win, no-fee’ arrangements, family law firms – constrained by rules designed to stop firms profiting excessively from divorce – still predominantly charge for each hour of a lawyer’s time that’s spent on a matter.

How do you know you’re getting value for money?

Zoë Bloom and Hannah Budd have launched their new firm to help clients answer that question.

‘People don’t want to pay for the fluff any more,’ says Bloom. ‘I went to an FDR [financial dispute resolution hearing] the other day, by myself, and the [opposing legal counsel] turned up with a junior barrister, two partners, a senior associate, and we wiped the floor with them. We were literally half the price.’

The pair, who began working together at Keystone Law in 2019, are taking aim at several practices associated with ‘traditional’ fee structures. The first is ‘billable targets’, where firms set a number of working hours a solicitor should be charging for, which Bloom believes perpetuates a culture of presenteeism rather than productive work on behalf of
clients.

The second is the practice of double-charging for work done by a junior solicitor and then redone by a more experienced colleague. ‘Training staff is important, but it shouldn’t be a cost that’s passed on to the client,’ says Bloom.

To combat this, BloomBudd is taking a more discretionary approach. According to Bloom, the young firm prides itself on proactively ‘deciding how to spend clients’ money’. Without the tyranny of billable hours, the firm claims it is more able to outsource tasks to specialists.

Even if this means the firm’s margins are smaller than those of its competitors, Bloom says she hopes to earn her clients better results and her firm a better reputation.

All firms face pricing pressure

Larger firms are not immune to downward pricing pressures, however. In 2020 Withers launched Uncouple, a dispute resolution model that allows couples to share the cost of ‘outcome focused methods of evaluation’.

But Bloom believes the entire process is due for disruption. Boutiques such as Katz Partners and Bortoft Bell have bolstered the ranks of challenger firms.

Fees will be a key battleground, and both Bloom and Budd believe their experience working at Keystone – whose lawyers work almost as independent freelancers – gives them a unique perspective.

‘It’s interesting speaking to other new firms because they’ve all come out of traditional practices,’ says Budd. ‘So they’re coming at it from a completely different angle.’

Bloom adds: ‘But I think together, as a group, we will change the way that billing is happening. We will change the way clients are paying, and clients are going to start expecting a better service for less money.’

 

Image Credit: KimSongSak, Shutterstock



 

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