We all know the old fable of killing the goose that laid the golden eggs, which warns against the dangers of excessive greed. The saying was applied by one Family Law Judge to situations where there is a family business.

There can be a fine balancing act between protecting income generated by a business for the benefit of the family, and extracting capital to satisfy a spouse’s claim. Collaborative law can help with this.

For separating couples in this situation there can be great concern, particularly for the party who is running the business. They can fear that divorce is going to spell the end of the business, and it having to be wound up or sold to release capital, or at least a severe disruption to its profitability.  However, a joint approach to the question of how to treat the business can pay dividends.

Family lawyers know that there is a great deal of uncertainty around business valuations, with two accountants often coming to very different figures as to the value of the business.  The liquidity of the assets in the business will need to be taken into account and usually, if the business is providing the only income for the family, it is in everyone’s interest to ensure the business remains as healthy as possible. It may be that a valuation is necessary or at least an accountant’s report to help a couple understand what income the business can generate and what capital, if any, can be extracted and when.

An approach that can help, pioneered by the family law group, Resolution, is the process known as collaborative law. Over 1,400 lawyers in England and Wales – all Resolution members – have already received training and can offer this option to their clients. Separating couples and their lawyers all sit down together and work things out face to face, under an agreement that the divorce won’t end up in Court.

Michael and Sarah separated after a long marriage of 20 years during which time Michael had built up his own small manufacturing business. “I was worried that, due to the divorce, I was going to lose everything I had worked for, for so long.  However, I knew that, at heart, Sarah was a reasonable woman who understood the need to keep the business afloat to provide us both, and the children, with income in the future.  We both also very much wanted to ensure that the divorce was ‘tailored’ to recognise our concerns about the business, rather than imposing a ‘one size fits all’ solution. We liked the idea of sitting around a table with our lawyers and working it out between us rather than risking having a judge, who might not have the time to properly understand our business, deciding things for us.

“I won’t pretend that the collaborative process was always easy, and Sarah and I had to have some very frank discussions about what could and could not be afforded in terms of extracting value from the business. However, we both benefitted from jointly instructing an accountant who was also trained in the collaborative process to assist with working out what was realistic in the circumstances.”

The collaborative process can provide a real alternative for couples who want to find a solution which takes account of their individual circumstances. It takes commitment and time, but for some people is the ideal way to manage what could otherwise be an impossible situation.

For more information about collaborative law or to contact a collaborative lawyer, log on to www.resolution.org.uk or contact a local lawyer listed below.

 

Jeff’s testimony from the London POD launch (possible testimonial?)

At the successful London launch of collaborative law, client “Jeff” gave his own

personal testimony of the client experience. Here’s what he said: –

Good evening everyone. My name is Jeff. I live and work in London and have been

married for 17 years. I have two teenage daughters aged 16 and 14.

When my wife and I decided to divorce 8 months ago we knew it was necessary to take

legal advice.

More by accident than design we stumbled across the idea of collaborative law. I

have nothing to compare it with, but I would like to tell you of our experiences of the

process and how it has helped us and our family survive the trauma of divorce. I’m a

layman, not a lawyer, so this is purely a personal view from the customers’ point of

view.

Neither my wife nor I like the stress of conflict, and she particularly doesn’t like

change. Both of us agreed that we did not want to hurt the children. I would also

like to think that we are both fair-minded people. I wanted to do not just what was

legally right but also what was morally right.

So when my lawyer introduced me to the possibility of a collaborative approach I did

like the idea, although to be honest at first I was somewhat sceptical. It came over

as a bit American, somewhat trite even – having to all sign up to an initial mission

statement and so on.

However, what it did do though was to commit us – really early on – to a contract to

sort it out together, my wife and I and our two lawyers.

Our circumstances were not straightforward. My wife did not want to sell our home

and have to move; ideally she wanted to stay there with the girls. I have a number of

pension arrangements and shares in my company and the assets needed dividing

equitably. Putting a value on these is not a precise science. We could have got

adversarial about it; there were times when the threat of recriminations arose, but

we and the lawyers were always drawn back to the binding commitment we had made

right at the start – to sort it out together, without going to the courts, and without

blaming anyone.

It was in that spirit that we thrashed things out. Don’t get me wrong, it is by no

means a soft option for anyone involved. It requires a level of maturity and patience

all round to reach solutions.

But I’m pleased to say we did.

And the outcome? I now have a better relationship with my wife than I have had for a

considerable time. We have managed to keep mutual friends and maintain good

family links on all sides. Mostly though, for the children, at such a critical time in

their teenage lives, the harmony we have maintained has been enormously beneficial.

And that is something which has mattered more than anything else – to both of us.

 

I do believe though that there is a major contradiction between the principles of

collaborative law and what currently resides on the statute book. We quite

deliberately worded our unreasonable behaviour petition mildly. During our

negotiations we felt it important not to be acrimonious, trying to avoid any blame

and recrimination. However, on first presentation to the court this was rejected on

the grounds that the behaviour of the respondent was not “unreasonable enough” for

the divorce to be granted. We have had to redraft the wording of our petition and

this time it looks like it is “unreasonable enough” for the court to accept. As I see it,

at the moment there is no such thing as a “no fault” divorce in this country and for

the collaborative approach to be successful this issue must be addressed head on.

Is collaborative the best way forward for everyone? I can’t say. But against some of

the horror stories I hear about divorce battles, all I can say is it has eventually

worked for us.

 

POSSIBLE FAQs section?

Tough questions to consider …and answer

Explain simply what collaborative law is and why it is better.

(See the collaborative law leaflet.) Remember, for some couples, in some

circumstances, the collaborative approach may not be “better” – it may not be the

best way to deliver the best solution. But we are finding that, for many, its holistic,

inclusive, co-operative ethos provides the very best scope for couples to reach

agreement, and move on. Let me explain the process and see if you agree…

If this is so good, does it mean that you lawyers have all been getting it wrong all this time?

Far from it. There are many excellent lawyers out there who are not collaborative

trained but who limit their practice to other more traditional techniques. These

techniques may well be the most appropriate in some cases. Good practice evolves,

and collaborative is one more option which is proving to provide the very best

approach for many families –especially those who like to maintain control over their

own situation and who recognise the healing benefits to be gained from jointly

reaching agreements.

Isn’t this just another way of lawyers making more money?

No – it is actually an alternative way of resolving disputes. Of course lawyers get paid

for their professional expertise, but they charge no more, or less, for working

collaboratively than they do for working in a more traditional way. What good lawyers

do is help find the best solutions, most cost-effectively. Many are increasingly

recognising that the collaborative approach does exactly that.

Is it cheaper?

Often, but not necessarily. Every divorce is different and sometimes it is hard to

compare what something might have cost if an adversarial approach, for example, had

been adopted, instead of the collaborative approach. Many case do demonstrate the

cost-savings to be achieved by all sitting round a table together talking through

solutions, rather than competing via adversarial solicitors for supposedly “the best

deal”. Those who adopt the collaborative approach quickly recognise that the best

deal is not necessarily the cheapest one, or the one in which they end up with most

material things. Factor in the emotional as well as the financial cost, especially where

children are involved, and the question of “cheapness” simply doesn’t apply.

Great idea – but who needs a lawyer to do it?

Marriage is a legal commitment. Divorce is a legal process, and it needs to be legally

untangled. Lawyers have a role to play in this process, whatever technique a couple

choose to use. One of the things that makes the collaborative approach so special and

effective is that it does not involve only lawyers. It is an inclusive process in which

financial advisers and even life counsellors are brought in to work, together with the

family and the lawyers, to agree the best holistic solution. It not only needs a lawyer

to be involved – it needs two very special lawyers, each wholeheartedly committed to

reaching agreed solutions co-operatively.

Another nonsense touchy-feely namby-pamby idea from the States – the nation that brought

us the pet psychiatrist!

In fact, Canada, as much as the US, is in the vanguard of collaborative family law

development. But that’s beside the point. Here in the UK, the practice has

developed in its own way, to meet the British requirement. It is true – the process

does eliminate the macho adversarial approach which may have typified divorce some

twenty years ago.

That’s a good thing. Don’t dismiss it as “touchy feely”. Instead, acknowledge that it

is in response to the significant proportion of divorcing couples who want to see

fairness, and who recognise that emotional welfare has its place alongside financial

welfare when marriages break down.

Can’t the richer of the protagonists just get a better lawyer?

It’s the wrong question. Couples who adopt the collaborative approach recognise that

they both want the best advice to reach the best solution for all involved. By working

together with two lawyers, and financial advisors and counsellors where appropriate,

they are best positioned to find the best resolution. Approached in the right way, it is

as close to everyone being a winner as it is possible to get when marriages break

down.

What if I don’t like it once I get started?

Hopefully you will go into the process with the full knowledge of what is involved.

Don’t think it is an easy route – it will be hard, but the alternatives are hard too. Of

course, if you find the process does not suit you, or is not delivering what you wanted,

you can withdraw. You are in control. It will mean you will both have to find new

lawyers though, because, as part of the process, your collaborative lawyer signs an

undertaking not to use the courts.

Are you seriously saying warring couples are going to get together and talk it through?

No – if couples are “warring” they are unlikely to choose to adopt a collaborative

approach. Collaborative is not right for all circumstances. It is couples who know

they want a negotiated, jointly “owned” settlement which minimises the emotional

cost of divorce, who choose collaborative family lawyers.

Come on – how do you achieve a power balance? One of the two is going to dominate, surely?

It can be difficult, and involves real skill and patience on behalf of everyone involved,

to get the balance right. But it would be wrong to think that there is something “soft”

or weak about collaborative lawyers. They are skilled in providing balanced guidance

for couples who, remember, are genuinely seeking a fair and equitable resolution.

Don’t lawyers just make any situation worse?

It’s an easy jibe, and a common myth, but simply not true. Good lawyers help couples

achieve their desire for fair solutions which take account of the emotional and

financial needs of families who split.

You’re not trained to counsel – your skills and counselling skills just don’t go together.

Actually, you may be surprised at the number of collaborative lawyers who are skilled

in other disciplines, like mediation for example. But you are right – we are mostly not

trained counsellors, or qualified financial advisors for that matter. That’s why you

will find that each regional network of collaborative lawyers has in turn an extended

network of counsellors, IFAs and others who it brings into the process at the

appropriate time.

Putting people’s emotional issues in the hands of lawyers is just playing with fire.

Actually, you may be surprised at the number of collaborative lawyers who are skilled

in other disciplines, like mediation for example. But you are right – we are mostly not

trained counsellors, or qualified financial advisors for that matter. That’s why you

will find that each regional network of collaborative lawyers has in turn an extended

network of counsellors, IFAs and others who it brings into the process at the

appropriate time.

You pretend the client is in control but you are disingenuous – you are in control really.

Simply not true. We are simply there to provide a structure, to offer guidance, and to

advise on the legal issues relating to relationship breakdown. Because of our

experience we are able to steer discussion if they get off track, but it is the client who

sets the agenda and the client who remains in control of arriving at their own

solutions.

How do you square your professional duty to meet your client’s best interest with the

collaborative approach?

Don’t get trapped in the outmoded perspective of the adversarial approach.

In fact, there is simply no conflict. By choosing the collaborative approach the client

has indicated that they want a holistic solution, in open discussion with their partners

and his/her lawyer. By effecting that, we meet our professional duty to facilitate

clients making their own decisions about what is best for them.