Articles
Continued from Page 1
New Lawyers and their Transition into the Marketplace
by Thomas F. Liotti
Q – Mr. DaSilva, you have been involved in many Bar Association activities. Do you believe that Bar Associations provide substantial training and warnings for lawyers about some of the problems that you have described?
A – Not at all. I think it is a terribly inadequate area. You have to go back beyond the Bar Association, go back to the law schools. I think the law schools just turn people out. Sometimes I would say the best qualifications for getting into law school is to have the ability to sign the tuition check.
Many of the law schools will take everybody and anybody. People should not be lawyers sometimes. When they get in the law school, they do not focus on the practical aspects of a practice. They teach law primarily.
They may even have some clinics where you have a mock trial of the matrimonial case. I know Hofstra Law School, I have been involved with some of their intern programs where they have a situation where you represent a wife and somebody else represents a husband and you now negotiate, and I as a lawyer will observe what is going on and give my impressions, what they are doing right and wrong.
They don’t deal, I don’t think, with the business aspect of funding a practice. I don’t know any law school that has a course in business, of funding a practice, what it means, what you have to go through. I think these people come out of law schools totally unprepared to run a practice. Yet many of them do. It was several years ago you could not get jobs. That was eight or ten years ago, and if they couldn’t get jobs, they hung up shingles and they ran into problems.
Q – If a lawyer is having difficulty functioning, are there programs in place for lawyers such as lawyer counseling programs that can deal with the lawyer who has problems in maintaining or managing a practice?
A – There are some, but they are inadequate.
Q – Thank you. Mr. DaSilva, I started this line of inquiry by asking you about what is required and what is needed when a lawyer is coming out of law school and attempting to set up a matrimonial practice. What exactly do you need, a desk, chairs, telephone, what is required?
A – Basically the simple physical set-up, a place to see clients. Some people do it in their homes, sometimes they set up an office. It depends on how much funding they have available. If it is a person with limited funds, you rent an office in someone’s suite, you have a telephone with an answering machine, a computer, and you sit and do your own work.
Then here is the question of getting clients in these days, in the last ten years or more, so you put ads in papers, PennySaver, Newsday or whatever . Newsday is expensive for advertising, but you use some of the PennySaver type publications and you wait for the phone to ring.
Q – Do you have to have employees?
A – No, not at all.
Q – Can you function without employees?
A – It is possible, sure, if you know how to use the computer or typewriter or have the ability to generate paperwork.
Q – You have indicated that matrimonial cases are, to use your words, very expensive. You have indicated that lawyers fresh out of law school doing this advertising would have difficulty making their overhead and so forth. New York is known as a grounds State; am I correct?
A – Yes.
Q – Would you please tell us for the record what a grounds state is?
A – A grounds state is sometimes called a fault state. You cannot get a divorce by consent. You cannot get it because the parties simply want it. You have to show that there are grounds for the divorce.
New York has fault grounds. At least four of the six grounds for divorce in the State of New York are fault grounds, and the only two non-fault grounds are where you have a separation agreement, and the other one where you have a separation judgment and you have lived under either the judgment or an agreement for a year, and if the parties substantially complied with its terms, that becomes the grounds for the divorce.
The other four are really the fault grounds and they fall within most of them. The most common one used is cruelty. Ninety percent of the uncontested cases or more are based on constructive abandonment, refusal to have sex for at least a year prior to the commencement of the action without justification, so we do have fault grounds, and you do have to get into the nitty-gritty of what the people are doing to each other. If it is going to be contested as cruelty, you have to deal with a possible violence. If there is no violence, you have to deal with emotional cruelty, you have to deal with issues of medical problems as the result of the cruelty.
A – Is there something called an uncontested matrimonial case?
A – You are using a word which now has been divided into two words, two kinds of cases. We used to have what we called uncontested cases. The matrimonial part have now segregated these into uncontested case and settled contested cases.
According to them, the uncontested cases where the parties do not have any issues, they have reached an agreement, there has been no litigation and they are simply now proceeding to a divorce on the basis of an agreement. That’s an uncontested case.
The settled contested cases are where there has been some litigation and the case has been settled. The settlement means that all of the issues have been resolved by an agreement, so that would be coming under the generic term of uncontested case.
Q – What is a contested matrimonial?
A – A contested case is where there are issues upon which the parties cannot agree as to their resolution and it is necessary to present those issues to a judge for resolution. That’s a trial.
Q – When someone first comes into you office on a matrimonial case, do you know at the outset whether it is an uncontested matrimonial or a contested matrimonial?
A – There is no way to tell. In fact, many times clients come to me and say they have a simple case, “We have agreed on everything, we want you to write up an agreement.” That to me is trouble, because it is inconceivable that a layperson who has never been in the field can think of everything that should be considered in creating a complete settlement agreement or separation agreement.
The agreement does two things. First it should resolve whatever issues presently exist and secondly it should contain in its framework the basis for a resolution of issues that you can anticipate may arise in the future and try to avoid them.
As a simple one, the kids are three and five, what do you do about college. The Court will not deal with it at that age, but in doing an agreement you know at some point that that will become an issue. You put it in the agreement as something that may come up in the future. Most people don’t think ahead in that fashion.
Q – If someone comes to you, Mr. DaSilva, on a matrimonial question and they ask you for your representation, do you charge a minimum fee retainer?
A – I have a basic fee. The basic fee will vary with the case. In other words, when I see a client for the first time, I schedule two hours with the client. I cannot do it in less than two hours. I spend a full two hours going through the history of the case, the history of the marriage, what is involved with the people, and try to perceive what the issues are in the case, and ascertain, if I can, the possibility of which of those issues appeared to be settleable and which ones are not.
Based upon my conclusion of that two-hour session, I am able to give some recommendations to the client, give them some kind of advice as to what should be done, and I can also formulate in my mind what that case minimally will take in order to handle it. That’s on a case by case basis. They have no set fee minimum.
Q – Is there a uniform rule or a minimum fee, if you will, that you. ll charge on any matrimonial case?
A – Yes. It depends upon the case.
Q – Let’s take the simplest case.
A – Okay. $2,500.00. The reason is that that would be where all of the issues have been resolved, and I create the agreement and handle the paperwork for a divorce, and part of that function in my mind is to assure that the agreement fulfills my responsibilities to put in writing, in language that should not be challenged, the deal that was made and to see that the deal is complete and that it projects some of these future problems.
Also it is a responsibility and a liability that I am assuming to perform that task, because as a lawyer I do have a liability to clients to perform a task in accordance with the standards of practice.
Q – Where you say minimum fee, do you mean that you would not undertake that case for less than $2,500.00?
A – That is correct.
Q – Do you also keep track of your hours against the $2,500.00?
A – Yes.
Q – Your hourly rate is what?
A – $400 an hour.
Q – Do you know of matrimonial lawyers who work for less than an hourly basis?
A – Certainly.
Q – Do you know of matrimonial lawyers who would undertake the simplest matrimonial case for less than $2,500.00?
A – Yes.
Q – Let’s take the most gruesome set of circumstances, a couple, the wife comes to you and they have two children, maybe there is some indication of battering, a husband is not providing for, he is not providing maintenance, the wife is not a moneyed spouse, not earning any money, the husband has left the marital home, in a case like that where you think you may have issues involving custody and other problematic concerns, what would you charge?
A – You left out some factors such as the types of assets that are involved. If he has stock options, it is extremely complex. If you deal with certain types of pension plans, it is very difficult to deal with some of them. The man may be involved in the corporate business that has a complex structure that may require difficult evaluations. He may be involved in the real estate business of some sort.
You have to look at the asset picture as well, but you mentioned one thing, custody. When I hear the word custody my ears go up. Is this a true custody issue? If it is, that’s one thing. If I smell that it is not a genuine custody issue, I will talk turkey with the client and maybe not even handle the case, because if I think a client is trying to use the custody issue as maneuver for a financial advantage, I am going to tell the client flat out, “You are not going to do it with me as your lawyer, because there is too much scarring with children.”
The worst thing that a child can have in his lifetime perhaps is a custody battle. I will not be a party to it. I explained that to him, and I am surely successful in deferring a client from suing on a custody issue if it is really not genuine. Even where there are some issues, there are ways to work them out without the fight of a custody battle such as shared parenting.
If you have a client that you perceive could be reasonable, you can deal with that.
If you have a true custody case, it is enormously expensive. I tell most of them they cannot afford it.
Q – The same statement of facts that I gave you, let’s take one fee that you would charge as a minimum where it is not a true custody situation and one where it is?
A – The difference for custody would be $10,000 to $15,000. When you have a custody case, it is going to be tried, almost certainly, if it is a genuine issue. There are very few of them. Most custody cases are unnecessary. If you do have one, you are looking at ultimate expenses in the $50,000 to $75,000 range including the expert testimony and everything else you’ll need.
You. ll have a Law Guardian who will be paid on standard rates for a Law Guardian, which could be $150 or $250, and you have forensic evaluations, $200 or $300 per hour, and sometimes 20 or 30 hours of forensic time is necessary, so you are dealing with very, very big bucks there. As the attorney, you have to devote yourself very assiduously to that case.
– Do I have it right that you just indicated that as the lawyer, forgetting disbursements or the payment of experts or anything else, but just for the legal fees, you would charge on a contested matrimonial case involving custody $75,000 up front?
A – No, not at all.
Q – What would you charge?
A – I would determine what the case is worth in terms of a retainer. If custody were not involved, and I would add $10,000 or $15,000 to the retainer for the custody issue. I would lump it altogether, but in my mind, that’s how my mind works.
Q – For the underlying matrimonial?
A – It depends how complicated the issues are the magnitude of assets we are dealing with. Bear in mind that the larger the assets the bigger your liability is if you make a mistake. There is more time you have to put into a case. If I am dealing with megamillion dollar assets, I am going to have a much higher retainer, not because the people are wealthy, but because of my responsibility in dealing with those assets, the complexity of them, and I could charge anywhere from $25,000 or $50,000 as a retainer.
Q – The concentration of work in a matrimonial case, where the most work is done, is it, for example, as in criminal law, done at the trial or is it done in the investigation stage, pleadings stage, the pendente lite application stage, the Order of Protection stage, and so on?
A – The least time is spent at the time of trial. Most time would be in developing the case. It is called marshaling the facts, the evidence, putting them in the form that you can use as representing the party in that case in terms of the issues being presented. That’s where the bulk of the time is spent. The pendente lite or temporary support or temporary application is not really that time consuming, because usually it is limited to a specific issues, support and temporary support, what was the family living standard, what do they really need to carry them through this trial, what is the capacity of each party to bear that burden, and that’s pretty much it.
Q – What if you have an exclusive use and occupancy situation where, let’s say, the wife is being battered?
A – The simplest thing to try to avoid expense, I send the client to Family Court to get an Order of Protection. It is cheaper and easier. The client goes there and the intake at Family Court will write up the Petition. I can do it, but I don’t because it is time consuming and the client would have to pay for it.
They usually get a temporary order of protection the same day and then you return on a hearing day, and that is when I appear on the scene. It is usually one day or less that it takes me. I would guess two or three hours of preparation time for each hour in Court. If I anticipate two hours in court, five or six hours preparation time, so seven or eight hours I am in and out on that issue.
Q – Based upon your experience, let’s say you get a fee in a contested matrimonial case using the same example that we have before, husband and wife and two children, I gave you the example, you remember it, right?
A – Yes.
Q – Let’s say that you charged $25,000 up front as your minimum fee. Within the first month of that case, you are able to anticipate how much of that $25,000 will be eaten up through the course of litigation and everything that you do as a matrimonial lawyer?
A – The first month, not much, because . . .
Q – After the first month, Mr. DaSilva you said in the first month not much of the $25,000 would be eaten up in that fact pattern that I gave you?
A – Yes.
Q – After the first month, can you tell me how much would be eaten up?
A – It would depend on whether there was a temporary motion that was required. That would probably cost $2,000 to $4,000 of time, typically, and when I say of time, I am referring to a blended time rate, which includes not just my time, but the time of people in my office, and the case goes down to $100, so it would not be eaten up as quickly if other people in the office are doing things, although I do review, supervise, and rewrite everything. I am a fanatic of that. It has to go as my product, so I will not accept anybody else’s work in the office.
Usually the times when the money gets eaten up – – one time will be phone calls. Telephone time is very consuming of a retainer. I don’t think most people realize it, and I constantly remind the client, . You asked me this question yesterday, and I gave you the answer, and I think it is pretty much the same, nothing is different, and the only thing new today is the fact that it is costing you another $40 to get you the same answer you had yesterday. Do you realize how quickly you are eating up the retainer?.
I suggest instead of calling me when they think of a question to ask, that they keep a list and ask them all at one time and conserve the retainer for when it is needed most.
That retainer is needed most, I would say at the beginning of the discovery stage in terms of Interrogatories. They can be very time consuming in answering. Preparing them is pretty standard for the most part. You take a standard set and tailor it to the case, but in answering them you have to be very careful because the Interrogatories are the equivalent of testimony and you have to be sure that they are accurate. You don’t ever accept a client’s response. You want the response documented to the extent that you can, because the client and you will have to live with that response throughout the balance of the case.
The next stage where a lot of time and money is consumed would be depositions. Depositions generally run and cost about $2,000 a day in time and costs, not including preparation time. Preparation time for depositions is not as bad as preparation time for a trial. Preparing for a deposition, depending on the case, I would say an average of three to five hours of preparation time for a deposition. The deposition itself can take one or two or three days. The deposition stage consumes a lot of time.
Trial preparation is extraordinarily expensive. Many of the judges now require what is called a trial notebook, and that is a notebook which consists of all the pleadings and all of the pertinent orders and all of the exhibits that are anticipated to be used.
Some of the judges want an agreement in advance on the propriety of the exhibits and if there are any disputes to indicate those that are in dispute.
A trial notebook in my office usually requires 30 to 50 hours of time, because it brings the whole case together, all of the evidence, and it is true trial preparation. I use a trial notebook, I always had one of one sort or another, I had it in folders, but now I am switching over to notebooks. I also add to my trial notebook things the judge may want, all of the depositions, every deposition is outlined. If the deposition consists of 300 pages, I will have it condensed to five or six pages so I can find things very readily.
The trial preparation requires that I review every deposition, every document, every affidavit and have them clearly outlined and resumes at my fingertips so that when a witness testifies at variance of what was said in an affidavit or in a deposition or in an Interrogatory, I can reach and grab it quickly, and I usually have what is called a second seat at a trial, somebody who has worked with me in preparing this trial notebook that I use, so that when I indicate by a motion, a paper is given to me which expedites the course of the trial. The preparation for trial is extraordinarily time consuming.
There are court conferences which unhappily are time consuming and not very productive. When a case is first filed with the Court and a judge assigned, there is a preliminary conference where the judge is required to have the parties and the attorneys come in and lay out a schedule of a course of events up to the point of the trial, schedule of depositions and all the disclosure items, so it gets on a time track.
Before that schedule is approved, you see the judge or the judge’s law secretary and, unfortunately, part is that sometimes you. ll wait one or two or more hours before you can get in to spend ten minutes having this schedule approved. Then there are other conferences where appearances are required.
The problem is that the judges are so heavily overburdened that they cannot handle the caseload. It is impossible, physically impossible. As a result, everybody lines up and waits. They can have 20 cases scheduled for a day. Ten, at least 15 for conferences. If you get in early and everybody gets in early, you can sometimes get out early. If you have an adversary who shows up half an hour late, you may be tenth in line to get into the conference and you sit there for an hour or even two hours, or sometimes they say to come back at 2:00 and that kills the afternoon also.
It is horribly time consuming to go litigate. If clients understand this, you have a basis for settling, because they are paying for all of it. That’s where the money is going. My preference is to have the money go to the parties rather than the lawyers.
The parties are unhappy, but you can do more in a settlement than a judge can do, because you have variations that a judge has no authority to deal with. I can have a $1 million insurance policy in a settlement agreement and the judge is limited to the amount of life insurance to the value of the support obligations.
You are involved in some cases where you have not gotten enough money up front and you are in a situation where you have to chase after a fee or chase after a client in order to get paid; is that correct?
A – Yes.
Q – Does that happen a lot?
A – Yes.
Q – Why does that happen?
A – Two reasons. The client feels sometimes that I have the lawyer, gotcha, and I, frankly, find it extremely difficult or almost impossible to walk away from a client because the bill is not paid. Some lawyers do this.
The retainer runs out and I usually go on monthly billing after that. I do put in my retainer letters, which I normally don’t enforce, that if there is contested litigation I will ask for an additional retainer in increments of $5,000. I sue that as a settlement device to sober the client up to the reality that litigation is expensive. Put the money on the table if you are fighting for principal. I just go on monthly billing after that. Sometimes the client can pay and sometimes they can’t. Many times I get stuck.
Q – If you are unfortunate enough to have a practice that is devoted to servicing low end matrimonial clients and you have not gotten enough up front on one or more cases, you are really as the lawyer between a rock and a hard place?
A – You are in deep trouble, personally. There is, I think, an obligation to continue with the case unless there is extenuating circumstances, particularly where you took the case on knowing the people didn’t have sufficient funding and it ran out and how could you abandon the person, where is that client going to go. If they had money to pay the bill, they would have money for a retainer for another lawyer, so you can’t abandon them. I don’t think it is right.
You are stuck with the case and you just spend your time and run the case to its conclusion and hope that some day you. ll get some money for it. Sometimes you get money in drips and drabs and sometimes the client will simply say, . I will wait to the end,. and at the end they say, . I need the money myself more than you.. You take your chances there.
I think one of the worst things you can do is sue a client for a fee because that is an invitation for a malpractice claim. If there is not basis, they’ll do it anyway. It is extremely difficult and that is why my retainers are fairly high as retainers go, because I know that if I take the retainer and it is used up I may be stuck on the case.
Q – By the same token, you have a reputation, you have been practicing for over 50 years and you have the luxury of not having to advertise for business.
A – I never have.
Q – What should a young lawyer do, let’s say starting out in the field of matrimonial law in the early nineties, if the choices are between advertising and not eating?
A – You do what you have to do. You certainly advertise. You need the clients. You hope that the cash flow will give you the means of maintaining your office, maintaining yourself, and sometimes you just hope that the flow of new clients, new business coming in will keep you going.
Q – You hope that there will be bigger and bigger cases where you can charge more up front?
A – I took a course once in how to build a practice and how to build the right kind of practice about three years ago, how to have the right kind of practice, the right kind of client. I was told there were four kinds of clients, A, B, C and D. The A client is the client who listens to you, who follows your advice, pays the bills on time and does not give you any grief, no excessive phone calls.
The B is not quite as good. C is below the line and the D client is the other extreme, does not pay the bills, does not listen to you, gives you a hard time, so the course was to train you on getting the A and B clients and eliminating the C and D ones.
The bigger you get, the higher the overhead, you know that. What happens if you have a lot of expenses that have to be paid and there is no money in the till and now here is a client you know is a C or D client offering you $10,000? The answer is you refuse it, you don’t take the case.
If necessary, go to the bank and borrow the money and use that time that you would spend on that client trying to develop good business.
Q – Then you may wind up waiting for your phone to ring and it may never ring?
A – That’s right. That assumes that you need to have the ability to borrow, that you have some resources to keep you going, and young lawyers do not have that, most of them do not have it if they are just starting out. They are forced into taking new fees from what I would consider the C and D clients.
I don’t think the new lawyer knows it. They cannot evaluate clients the way somebody practicing a number of years can. They just see a client with a picture of a matrimonial problem that has to be resolved and you get x dollars and take it and later you find out what you. ve got. A young lawyer does not know ahead of time.
As you get experience, you can evaluate the client better. You are tempted and you take the fees and try to cover your overhead and do what you can to satisfy the client.
Q – Going back on your experience, let’s focus for a moment on the late eighties into the nineties up until the present time, has it been difficult for women in particular out in the suburbs here in Nassau County and Suffolk County to break into the matrimonial law field as attorneys?
A – Traditionally women have had a difficult time in law.
Q – Why is that?
A – Prejudice, male chauvinism. It is particularly true in terms of good cases. The good cases, even the women, want experienced lawyers, and usually women in the field are relatively new in my lifetime, my career. They have come into the filed – – when I went to law school, we had six women in a class of 300. Today the women – – it is about half now at Hofstra, I just saw a statistic.
Women are predominating more and more. I think it will take another one or two generations before they hit equality with men in terms of recognition and respect.
I think that men would prefer to go to a male lawyer and some of the women would prefer male lawyers because of the feeling of experience. Women have not been that well established in the law field for the last hundred years as have men. That has an impact, so we find that the women in the field, at least in the last ten years, the new ones coming into the field, have these low end cases representing most women.
That has been my observation in terms of being in court, talking with lawyers. I think it will be another generation or more before that changes. I think that women have a very difficult time in law getting the respect that they deserve.
Q – You spoke about gender bias among our colleagues and members of the bar. Is there also gender bias, in your opinion, stemming from the judiciary on down to the lawyers who come before you?
A – I would say so. There have been complaints made to the Commission on Judicial Conduct for that reason. I have personally observed a difference of attitude. I could not pinpoint specifically a judge dealing with a woman differently from a man just on the gender basis, but I kind of sense it by being in a courtroom and seeing what happens. That’s my opinion. That’s based on my observations.
I think women have a tough time in the role of attorney, particularly the younger ones. I know there is one judge in Suffolk County who loves to have young women in his courtroom to crucify them. I believe there have been complaints.
EXAMINATION BY COUNSEL FOR THE GRIEVANCE COMMITTEE:
Q – Mr. DaSilva, I found your testimony fascinating. I will use some of it in my work here. You are better than my family law teacher.
Mr. DaSilva, you testified that you often have a minimum fee which is stated in your retainer, but that you still keep hourly time. Could you explain why you do that?
A – The minimum fee is based upon case law that you are permitted to do it. There is no such thing as a non-refundable fee. You are permitted to have a minimum fee under the Court Rules governing matrimonial cases providing the retainer letter states the basis for the minimum fee.
However, in the event that your services are terminated prior to the conclusion of the case by way of settlement or trial, the judgment, or, in the event of a reconciliation of the parties, you are required to refund to the client all of the money not consumed by your time rates if you are going on a basic time rate.
I maintain that if I, for example, received a retainer of $10,000 and the client says to me after a period of time that she and her husband are reconciling, they want to terminate my services or go to a different lawyer or for whatever reason, I simply add up my time records to see whatever that is and see how much I have earned of the retainer and refund the balance.
Q – You made a differentiation between clients that come in with a great many assets and those you characterize as lower end clients. How you characterize that client; do you believe you have the same obligations to that client no matter what position they are in as an attorney?
A – Absolutely, because even the client with minimal assets is a human being with the same rights and the same privileges and the same expectations as the person with a lot of money. There is no difference.
Again, I said the difference is where you place the decimal point, but the work and the way you treat the client, what you have to do is exactly the same.
You are dealing with issues and how to handle issues. It is the same whether you have a low end or a high end client. You have to devote the same kind of attention and responsibility to both clients. It makes no difference.
New lawyers need help, lots of it and fast. Like the 19th Century Philosopher, Thomas Robert Malthus, who postulated that war, disease and famine were good because they put a check on the population, there apparently are some established lawyers who believe that a certain number of new lawyers will destroy themselves by being forced into making poor business decisions and that this is a way to control the supply of too many lawyers.
The quality of legal services that these new lawyers are capable of delivering is diluted by virtue of the low fees that they are compelled to charge, their advertising that creates more “low end” business with its diminishing returns of ratcheting up overhead without having sufficient staff, time or experience to deal with labor intensive and emotionally taxing litigation, such as matrimonial law.
The response of the profession can be continued indifference coupled with more disciplinary prosecutions or lawyers can come to the aid of their brethren by doing what lawyers do best, namely, defining the problem which hopefully this article has begun to do and finding a solution to it.
Possible solutions may include active committees at bar associations that can offer to new lawyers various types of cost effective or even free mentoring advice on the establishment and maintenance of a practice, inclusive of proper management information; the development of business; and the resolution of ethical dilemmas. So too, such committees may assist lawyers in coping with the stress associated with the practice of law where we frequently see as its sequelae, drug and alcohol dependence; depression; anxiety and various stages of poor health from obesity to high blood pressure, diabetes, heart disease and cancer.
If lawyers enter the profession to help others, then we should also pay attention to each other. We are not insensitive, or invincible high tech machines that just run and run without a turn off switch. We can burn out or lose our youthful exuberance. We are better advocates when we have not been brought way down by these real life concerns. That is the holding of this case and this article. Let’s help each other to have more productive practices and lives.
End of this article