Can You Use Collaborative Law Without Trust?

A common concern many people have when considering using Collaborative Law is whether they can trust the other party. Some people think they can't or shouldn't use Collaborative if they can't trust the other side. To some extent that's true, but trust really exists on a continuum ranging from complete trust to no trust at all. Trust is not an absolute and it changes, to some extent, from issue to issue. Most of the time, parties have a trust level somewhere in between the two extremes. That means that they trust the other party some of the time, but not always.

For the cases where there's no trust at all, neither Collaborative nor litigation can guarantee a comfortable result. There will probably always be a suspicion that the other party lied, hid facts or misled. For the cases where there's some trust, but also some suspicion, the choice of process becomes a judgment call.

In reality, Collaborative Law and litigation rely on the same ultimate enforcement mechanism, which is having a court take action. In Collaborative Law, that would require the parties to change attorneys, which would cost both sides. In addition, each system has some additional means of ferreting out the truth.

Litigation.

• Written discovery is often used to obtain documents, explanations and admissions about assets and other issues. That can be supplemented by oral depositions where direct questions are asked of witnesses (usually at least the parties) who are required to answer under oath.

• Inventories . In divorces in Texas, we usually rely on sworn inventories and appraisements prepared by each side. In litigation, each party prepares his/her own inventory. Each inventory document usually has language saying that the party swears that all assets and liabilities have been correctly disclosed, to the best of the party's knowledge.

Collaboration.

In Collaborative Law cases, we don't use written discovery or depositions usually. Instead, we rely on a cooperative process with many layers of protection built in. These layers include the following, that don't occur in litigation.

1. The Participation Agreement that is signed by everyone at the beginning of the process has a commitment by each party to be truthful. It also has many comments about the importance of honesty, transparency and cooperation. While there's no guarantee that every party will always comply, having the written explanation and the discussion at the signing probably enhances the chances for success.
2. The roles of the attorneys and other professionals are different. Attorneys are required to make sure that both parties are operating under the Collaborative rules. All of the professionals are charged with making sure the process is honest and transparent.
3. The neutral financial professional (FP) is an extra safeguard for both parties. The FP reviews and analyzes all the financial information for both parties and makes sure it is complete and accurate. That's an extra set of trained eyes reviewing everything.
4. The neutral mental health professional (MHP) also helps make sure the parties are being open and honest. The MHP works with the attorneys to help manage the process and ensure cooperation by both parties.
5. The financial professional usually prepares either a sworn inventory or a very detailed spread sheet to organize all the parties' financial information. The FP usually reviews the original financial documents to complete the inventory or spreadsheet.
6. If necessary, the parties can sign a sworn statement that all relevant information has been provided.

Bottom Line: No system is perfect. There will always be people who try to lie or hide information or assets. There are at least as many ways to catch cheaters in a Collaborative case as in a litigated case, but there are more people watching normally to prevent cheating in a Collaborative case. From my experience, people in a Collaborative case take their agreement seriously and the professionals ensure that everything is done properly.

Regardless of the system, the ultimate remedies are the same whether the case is in Collaborative or litigation. People hide assets and lie all the time in litigated cases. There, an attorney can file a motion to enforce or to divide undisclosed assets or to take some other action to punish a dishonest party. If necessary, that can be done in a Collaborative case, after the attorneys withdraw. Normally, the person caught cheating is also required to pay attorney's fees.

Having Collaborative Success

Most people going through a divorce or dealing with another family law issue want to do what they can to have a good experience with the Collaborative Law procedure. While it's hard to anticipate all possible problems that can arise in a case, the parties can act in certain ways that will help avoid potential pot holes as they work toward an agreement. Here are some suggestions to keep in mind.

1. Be willing to follow the structure set out by the attorneys and other professionals. Many people want to jump ahead and immediately start working out agreements without following the preliminary steps of setting goals, gathering information and generating options. Years of experience and input from many different experts have lead to the current procedural steps that the professionals plan to follow. You will forfeit your chances of success if you won't follow the normal steps of the process.

2. Do what you agree to do. Keep your word. If you agree to provide information, attend a meeting, follow a certain schedule or anything else, please do what you said you would do. If you can't be trusted to keep your word, the process will fail.

3. Stick to the agenda. The professionals and the parties set the agendas for the meetings. It is important to follow the agenda. Surprises lead to upset feelings, a sense of insecurity and a loss of confidence in the process. Straying from the agenda also wastes time and money for the parties. There will be time to get to all the necessary issues. The order of progress is set by the professionals based on our experience in finding the most effective ways to deal with issues.

4. Don't go rogue. Follow the agreements that are made as we go along. Don't suddenly decide to start taking actions on your own. That causes a lack of trust and will lead to a termination of the process.

5. Be patient. It takes some time to progress through the "Road Map to Resolution" that we follow. We don't skip steps because each step adds a significant part of the foundation for future actions. It may seem like the process is moving slowly, but it is virtually always the case that litigation would take longer to get to a final resolution.

6. Be respectful of the the other party's needs. It will be hard to you to get what you want in the end if you are unwilling to give in some to what your spouse wants. Try putting yourself in your spouse's position to better understand what s/he wants and why. That should make it easier for you to agree to what your spouse is asking for or to help you find or create a viable alternative.

7. Speak up. At joint meetings, be sure that you speak up to share information, opinions and choices. If you have special concerns or valuable information, make sure you inform the other professionals when you meet with them separately. Any problems you are having can be more easily dealt with if you let others know about them.

If you will follow these suggestions, you can greatly improve the likelihood of success for you in the Collaborative Law process.

How it Works -- Putting a Team Together

Although some attorneys still work on Collaborative cases without a neutral mental health professional (MHP) and a neutral financial specialist (FP), most attorneys in North Texas routinely, and exclusively, insist that both neutrals be brought on board before the joint meetings start.

Putting together a team of professionals to work on a case usually involves the two attorneys meeting or having a phone conference to discuss which MHP and which FP they want to use. They end up with one or two or three candidates for each category and then find out who's available. The attorneys discuss who they have worked with before and try to determine if any special skill sets or experience are needed for the case.

For example, they may need to find someone who is strong on tax issues or financial planning or debt management. They may need an MHP who has worked as a parenting coordinator, or who has worked with special needs children or parents with certain emotional issues. The attorneys will try to find the most compatible professionals to work with the personalities and needs of the parties.

It is essential that the professionals be seen by all as being completely neutral, so they can not have worked with either party in the past. They likely would have worked with one or both of the attorneys previously, but that is disclosed and it's not an issue for their neutrality.

Once the attorneys have gotten commitments from the other professionals, all four join in a conference call to preview the case, discuss the potential issues and needs and then come up with an agenda for the first meeting.

Finding the right professionals is one of the most important steps in getting the Collaborative process started.

Collaborative Prenuptial Agreements

Our good friend Sam Hasler from Indiana has a brief post in his blog today about using Collaborative Law as the process for creating a prenuptial agreement. His blog, "Sam Hasler's Indiana Divorce & Family Law Blog" is always a source for new ideas and good approaches for dealing important family issues. Here's what he wrote about prenuptial agreements and Collaborative Law:

"From Family Law Week comes Collaborative prenuptial agreements find favour

"According to The Law Society’s Gazette, a rising number of clients contemplating marriage are asking for prenuptial agreements to be prepared using the collaborative law model. The report records a shift in attitude among clients who would prefer to adopt a more consensual approach to agreeing a pre-nuptial agreement rather than employ the more traditional, oppositional method of negotiation."


I have previously written about using Collaborative Law for prenuptial agreements for professional athletes and using it generally for prenuptials for anyone. Prenups are very often put off until the last minute before a wedding, which makes the process much more stressful and difficult. Sometimes weddings are cancelled or postponed because of intense negotiations that aren't resolved satisfactorily.


Here's why you should use Collaborative Law for prenuptial agreements:

1. The process fits the need. I am a strong advocate of using the Collaborative process for prenuptial agreements. Working out a prenuptial is almost like doing a divorce in advance. There must be a lot of disclosure, planning and problem solving. The parties need to be able to look into the future and make binding, very important decisions about their lives and financial well-being.

2. The (Texas) process utilizes a mental health professional. The negotiations often bring out the worst in people, if the issues aren't handled well. With Collaborative Law, we normally bring in a mental health professional to assist the parties to communicate effectively and deal with the stress, and that would be essential in this type of negotiation.

3. The (Texas) process utilizes a financial advisor for both parties. We also bring in a neutral financial advisor who can help each party understand the financial consequences of the terms under consideration. The financial advisor also helps evaluate the tax effects of various options. Another helpful element is having someone who can assist both parties with budgeting and projecting their needs and capabilities in the future.

4. There is greater assurance of transparency and the sharing of all relevant information. That is a fundamental element of Collaborative Law, so there would clearly be an emphasis on providing the needed information and openly discussing matters.

Using all the Collaborative professionals to prepare a prenuptial agreement will benefit everyone involved and help avoid the disasters of a failed agreement or an uninformed agreement. The Collaborative process would require that the parties start well before the wedding date, instead of waiting until the week of the wedding, which is what sometimes happens now. It should result in a better agreement, everyone feeling better about the process and a happier wedding.

Get a Second Opinion on Using Collaborative Law if....

Choosing the right attorney is a critical step in using Collaborative Law to help you resolve a family law issue. In any kind of legal matter, you have to carefully select your legal advisor and advocate, but with Collaborative Law, extra care is necessary. Collaborative Law attorneys receive additional training so they can learn new skills and a new mental approach to handling cases. We call it a "paradigm shift". We realize that Collaborative Law requires a different orientation by the lawyer. It's not just a question of whether we can negotiate effectively. Our whole approach to a case is radically different and lawyers who haven't been to at least a 2-day basic training in Collaborative Law don't have a clue about what we are really doing or how we approach cases differently.

Unfortunately, some lawyers who are not trained will claim to be Collaborative lawyers. Some do it because they are genuinely interested in the process and have been persuaded of its value by things they have read or heard. Others, however, claim to be Collaborative and then work hard to talk any potential client out of using Collaborative Law. Sometimes they put their uneducated opinions on their web sites, where it is obvious that they are strongly biased against Collaborative Law even though they claim to practice it. Others wait until the prospective client visits them and then the attorney verbally attacks Collaborative Law in general or as it would work in their case.

How to evaluate an attorney for handling a Collaborative case.

If you are searching for a Collaborative lawyer to help you in your case and you run into a lawyer who tries to convince you that Collaborative Law wouldn't be appropriate or wouldn't work in your case, you should look into these questions:

• Has the attorney had at least one 2-day basic training in Collaborative Law? Tip -- the more training the attorney has had, the better (for you). If the attorney hasn't been to a 2-day basic training, don't waste your time with him/her.

• Has the attorney had any Collaborative training recently? Recent training is always good. Some attorneys went to a basic training years ago and have never worked on a Collaborative case. A lack of experience combined with outdated training results in bad advice for you.
  

• How many Collaborative cases has the attorney handled? If there haven't been any and the attorney is trying to talk you out of using Collaborative Law, you should move on.

It is very true that not every case is a good candidate for Collaborative Law, but you need an unbiased, qualified attorney to help you decide if you should use Collaborative Law. If you meet with an attorney who tries to talk you out of using Collaborative Law, please do yourself a favor and get a second opinion from a qualified Collaborative Lawyer.


How do you find a good Collaborative lawyer? Get referrals from friends or lawyers and other professionals, and do research on the Internet. A good starting point is the list, with background information, on the CLI-Tx web site at www.collablawtexas.com. If you really want to try Collaborative Law (and you should!), don't take no for an answer from the first lawyer you meet with.

What Happens to the Family Business?

Sometimes, families facing a divorce have a successful family business which must be included in some fashion when a plan is agreed upon to divide the parties' assets. Because Collaborative Law encourages the parties to be creative when they decide how to divide their assets, there will usually be numerous possibilities to consider. In traditional litigation, the options are usually somewhat limited. Probably the two most common approaches: a value is put on the business and one party buys out the other, or they just sell the business. To have a buy-out, usually each party will hire his or her own expert to value the business and then they negotiate or have a hearing to determine the value.

A Collaborative case is different.

Setting Goals
The Collaborative approach can be radically different. One of the first steps in the process is to determine the goals for each party. The goals may include retaining an ownership interest in the business or might be a desire to exit the business. Instead of planning to arbitrarily split the value of the business, the parties are free to begin by stating their preference. The preference could be to share ownership and operation of the business, it could be to sell to someone else, or it could be some other choice they come up with. The key is to start by asking what the goals, needs and interests of the parties are, and then fashioning a plan around those objectives.

Neutral Expert
Another difference between Collaborative Law and litigation is that Collaborative normally uses a single, neutral expert, chosen by both parties, to place a value on the business if that value is important to their approach. That saves money for the parties and reduces the arguments between the sides.

Gathering Information
As the parties gather information during their Collaborative divorce, the attorneys will evaluate the facts to determine if there are any legal issues, such as possible separate property or possibly a reimbursement claim, that need addressing. In a Collaborative settlement, those issues aren't automatically major issues. Their importance depends on what the goals are for each side.

Creating Options
After the parties gather information, they will generate options. Dealing with a family business, the parties may consider a wide range of choices. They could include some of the following:

• Continuing in business together, even after the divorce is final. Each might control certain aspects of the business.
  
• One side buying out the other, either immediately or over time.
  
• One party taking the business and the other party taking another valuable asset.
• The parties could jointly sell the business.
• They could dissolve and liquidate the business. Sometimes the components may be worth more than the intact business.
  
• They could agree to change the format or the products of the business, or go from retail to wholesale, or vice versa.
  
• They could divide the business or assets where there are multiple locations, such as a restaurant chain or several pieces of real estate.

And there could be other choices as well!

Conclusion
With expert financial and legal guidance, both parties can reach agreement on the best financial terms for themselves, consistent with their underlying goals. Collaborative Law provides the best chance of coming up with a win-win solution for both parties. Usually, couples don't continue to operate a business together after a divorce, but that is one of many options available with the Collaborative process. How ever they slice it, couples benefit by keeping control over the outcome of their family business.

What If Your Spouse Doesn't Want to do Collaborative Law

A situation that comes up occasionally is that one spouse will decide that a Collaborative divorce is the best approach, but the other spouse doesn't agree. Unfortunately, it is impossible to force someone to use Collaborative Law if they don't want to use it. It can be very frustrating for a husband or wife to research the subject and come to the conclusion that Collaborative Law would be best for both parties and then find out that their spouse disagrees. In some cases, maybe you are just stuck in litigation. In some other cases, you may be able to have a mature discussion and persuade your spouse to join you in collaborating. If you want to try to do that, here are some ideas to consider.

1. Try to find out the reason or reasons for the objection to Collaborative Law. Once you understand that, you may be able to come up with reasons to overcome the concerns.

2. Be sensitive to the need to avoid the appearance of pressuring your spouse. Sometimes that alone will make your position unacceptable to your spouse. A spouse may believe that if you want something, it must be bad for them. Try to promote your suggestion in a way that appeals to your spouse.

3. Try to explain the benefits of the process from your spouse's point of view. Some of the following may appeal to your spouse:

• Avoiding public exposure by meeting and discussing matters in private.
• Having control over the outcome.
• Keeping financial records private.
• Ensuring that the negotiations are held on a level playing field. Expert guidance is available to help eliminate the advantage of more knowledge or experience with some issues.
• Avoiding the duplicate expenses of having competing experts for property appraisals or business valuations.
• Encouraging creative new solutions, instead of the statutory guidelines or minimums.
• Focusing on planning for the future.

If those reasons don't seem to appeal to your spouse, talk with your Collaborative attorney or other professional and come up with some other approaches to present. The Collaborative process can't be forced on someone, but it's really worth a strong, intelligent effort to show the benefits to your spouse so you can both win.