Funding and financial considerations in family law matters are often not the first priority for parties and their lawyers, however, they can have significant bearing on the outcomes for the client including the length and cost of the matter. Ask yourself these questions as you work on your family law matters to see if you are utilisiing the best financial strategy for your clients. 

1. Have I considered how the funding method could affect the matter and my client?

There are a variety of ways clients may fund their family law matter, each with their own pros and cons. How will your client fund their matter in a way that achieves the best outcome with the legal representation they want (you)? 

With the increase in living expenses and rising inflation, many clients do not have excess discretionary income with which to pay the often significant legal costs associated with a separation. However, the options to fund can be limited - borrowing from family and friends can be stressful and also raise questions around how the liability is dealt with by the courts. Clients could also apply for personal loans or credit cards that are often expensive and require an income to be eligible. Even if clients do have significant income, often the income has already been allocated to fixed expenses, so an independent source of funding, like a Plenti Legal Loan, can also provide some peace of mind that they won’t need to source along with the other stresses they are dealing with during separation.

Independent funding can also provide certainty and speed of financing for the matter with no need to wait for interim orders for part property settlement and as a lawyer you can be sure your invoices are paid directly from Plenti rather than the funds being used for other purposes. 

Many firms are also now suggesting solutions like Plenti Legal Finance to pay the legal fees of a matter as they find it empowers their clients to source independent funding outside the court process and outside requesting funds from an ex-spouse. The funding can be used for mediation, consent orders or any process to achieve settlement and can include fees for parenting matters (provided there is a property settlement element) so your client does not need to wait for proceedings to be issued before they are eligible. 

2. Am I making the most of interim applications?

Interim orders are one of the most useful tactics to achieving outcomes before final orders are made or before an agremeent is reached between the parties, however, with the number of interim applications being capped at 2 per party one should be selective as to what they are used for. 

Where a client would struggle to pay for their legal fees upfront but there are funds held by the other party or in joint property that needs to be sold, often the first move is to apply for a part property application by way of interim order. However, more firms are using independent sources of funding, like Plenti legal loans in order to fund the legal costs especially considering:

• The cost to their clients of putting on an interim application for part property orders can be at least $15,000 - $30,000, whereas obtaining funds from an independent source of funds through Plenti may be less than that and are usually obtained much faster than an interim order
• as both sides and their respective legal representatives use resources for the part property application instead of urgent parenting or other financial matters including housing and spousal maintenance, the progress of the matter is often delayed 

3. Should I defer fees until settlement or part property is paid out? 

Another previously common funding option was for firms to differ fees until the resolution of the matter, however, many are now avoiding that particularly considering:

• rising inflation and opportunity costs reducing the actual value of the money received by firms on settlement
• the risk of clients ceasing instructions or disputing the invoices at the end
• reduced cashlow over often a significant period of time affecting the firm more broadly
• a sense of ethical conflict where the firm benefits from an earlier settlement by being repaid
• they do not want to be out of pocket for disbursements e.g. counsel fees and reports
• they would prefer to focus on the matter, and not the unpaid invoices that can build significantly over the course of a matter

There are many ways that finance come into play in a legal matter - from simply funding your legal fees, to how best to utilise interim applications. But considering family law matters in a holistic way by looking at it not just from a legal perspective but also from a financial perspective can help your clients achieve a fair outcome and, in turn, encourage referrals. 

Want to offer another funding solution to your clients? Join over 440 law firms accredited with Plenti Legal Finance and make a time to speak with Rose Dravitzki, Head of Legal Finance on (02) 7202 2427. Learn more.

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