Customizing the Collaborative Process to Client Needs

The personal and financial situations of divorcing couples are varied and unique, and I enjoy working with my colleagues and our clients to tailor the collaborative divorce process to address the clients’ particular circumstances. Doing so facilitates our collective ability to help the clients consider creative options and win-win solutions that meet their particular needs as they separate and divorce. For example, in circumstances where children are involved, their interests are, of course, critical, and we frequently involve child psychologists to help identify those interests and become the “voice of the children” as the parents are considering elements of their parenting plan. In other cases, where the parties have limited financial resources, we help the clients develop realistic projected budgets to help them acknowledge financial realities, assess options relating to debt owed, and adjust to the economic stresses of maintaining two households.

In one recent case, the parties are both engaged in the ownership and management of a successful business and wanted to accomplish a termination of the marital relationship while preserving the value and management of their business enterprise. The clients also co-own several commercial and residential properties. After significant discussion in our collaborative divorce “four-way” conferences, the clients ultimately decided that even though they were separating and divorcing, they wanted to seriously consider continuing their professional relationship for the foreseeable future. They wanted to formalize their business relationship and to discuss options that would allow either of them to have an “exit strategy” for selling their business interests in the future. They also wanted to consider options regarding the real estate that they co-own. It quickly became obvious that to comprehensively assist these clients, we needed to enlarge the professional team.

In the collaborative process, the parties agree in each case that when a consultant or other professional would be helpful to add to the professional team, the clients will retain the consultant jointly. In this case, we brought on board a residential real estate appraiser, a commercial real estate appraiser, and a corporate attorney. Because the legal costs of collaborative divorce generally are significantly lower than the costs in a litigated case, clients are able to consider utilizing professionals from multiple disciplines and still keep the overall costs of the process at a reasonable level.

The appraisers conducted appraisals of the various properties and met with our clients and us to discuss their conclusions about values and their opinions about current trends in the real estate market. The clients and attorneys were then better equipped to discuss options such as whether to sell some or all of the properties, to divide the properties between the clients, or for the clients to continue to co-own some of the properties for some period of time.

The corporate attorney met with the clients and us to discuss alternatives for the clients’ continued co-ownership of the businesses and for a buy-sell process if one of them decided to leave. The attorney updated the corporate governance documents and drafted a new shareholders’ agreement, formalizing the business relationship between the clients and detailing the buy-sell structure.

Particularly where a closely held business has significant “going concern” value, such as in this case, the process of continuing to work together not only yielded a result the parties felt was equitable and desirable, but also one that permitted them to preserve and maximize the value of their assets. Had these clients chosen the adversarial litigation model for divorce, it both is highly unlikely if not impossible that the clients would have considered continuing to work together and to co-own their business, and highly likely that there would have been a forced liquidation of assets and a division of the proceeds, which may well have led to a failure to capture the full value of such assets. Even in cases where the parties in litigation reach a settlement prior to trial, the contentious nature of the adversarial process does not lend itself even to considering creative options tailored to the clients’ unique situation, such as those described above and ultimately chosen by the clients in this case.