What Will Settlement Cost?

by | Jun 27, 2017

The question asked in every initial consultation. And, a question clients should ask throughout the attorney-client relationship.

The truthful, but dissatisfying, answer: It depends.

It depends upon you, the other person, the other attorney, and the complexity of your situation.

That is not, though, the end of the answer. While no attorney can guarantee the cost if charging an hourly rate, an attorney can give estimates for certain tasks that add up to an overall picture of the potential cost.

For example, the cost of settling a case depends upon:

– whether litigation is also going on;

– how much time is spent negotiating the settlement terms;

– who negotiates the settlement terms;

– how complicated the settlement terms are;

– how much advice you/the client seeks;

– whether other professional services are required (for example, to value assets); and,

– how much drafting is required for the agreement and any other settlement-related documents (for example, retirement orders and deeds).

I find that estimating negotiation time is the most difficult because my client and I only control our actions and reactions – not those of the other person and other attorney. There are various strategies that may help save negotiating costs – negotiations between parties/without attorneys, mediation, and 4-way settlement meetings, to name a few.

If nothing else, an attorney should be able to give you a cost estimate for drafting an agreement based upon the average number of hours it takes to draft and the attorney’s hourly rate. And, an experienced attorney should be able to give you a range for potential total cost based upon your circumstances and her experience. If an attorney cannot or will not give you any estimate, ask yourself how important this is to you when deciding whether to hire that attorney.

Cost is driven by time worked representing you. The more “homework” you do, the more you are likely save. The more aware and careful you are about how often and how long you communicate with your attorney also saves costs.

Budget how much you are willing to spend to resolve your case and discuss that with your attorney. Take that amount into account when deciding what dispute resolution process to use, how much time to put into any particular task, and whether to accept or reject a settlement offer.

And, once representation is underway…

Review your attorney invoices to understand how time is being spent on your case and ask questions throughout the representation about what certain tasks will cost, how necessary certain tasks are, and what homework you can take on. Every avenue pursued adds to the cost. If your approach is to leave no stone unturned, that comes at a cost. Ask yourself and your attorney whether those avenues are worth it – because the settlement process is an ongoing assessment of costs and benefits.

The cost of settlement is not just financial – it tolls your emotions, time, and energy. Only you can put a value on these. Understand that these – especially emotions – often fuel negotiations, which in turn, add to the cost. Weigh your emotional reactions to a settlement offer against the financial advantages/disadvantages of the proposal, the cost of continued negotiations, and the likelihood of success of your proposed response.

Settling a family matter is a very personal and emotional experience. Approaching settlement from a cost-benefit perspective is the path to understanding and managing the cost on the journey to settlement.