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In Case You Hadn’t Heard…NAVA/IBA Conference: Hot Topics in Family Law

by Rebekah Smith

I am attending the NACVA/IBA 2011 Consultants’ Super Conference this week in San Diego, CA.  The presentations focus on the latest developments in business valuation, litigation support and forensic accounting.  Thursday afternoon I attended a session entitled “Hot Topics in Family Law” which included a panel presentation moderated by Karen Kaseno with family law experts, Maryane Foley, Esq (Alaska), Randy Kessler, Esq (Atlanta) and Columbus’s own Scott Friedman, Esq of Friedman and Mirman.

The panel discussed the changes they have seen in their practices over the past few years, the impact on financial experts and what they expect from financial experts.  The panel agreed that both family law attorneys and experts who advise them have faced challenges in the past several years as a result of:

  • Valuations when income is much lower
  • Businesses that are showing a loss but still seem to have cash flow
  • Difficulty determining support and maintenance orders
  • Increased need for experts to help simplify the issues, particularly with limited funds for professional fees.

Scott Friedman indicated that his clients have become smarter and more frugal.  With less money to spend on professional fees, clients really question the value an expert brings to the table.  Scott indicated that a financial expert can really lend value to these cases by helping clients find solutions to what is becoming a more common problem, which is a lack of liquidity in the marital estate.

For many individuals going through a divorce, their largest asset is a closely held business.  In better times, people had plenty of cash and liquid investments to payout their spouse for one-half the value of the business, but now, that is not always the case.  Compounded with a lack of liquidity, many people are facing a lack of borrowing power as well.  When this is the situation, the attorney is going to look to the expert to assist in coming up with a creative settlement structure.  It might involve paying out monies over a long time period while making sure the spouse receiving the payments has adequate security.  It may also mean that the spouses have to stay in business together for awhile but with an operating agreement that protects them both.  Whatever the solution, the panel all agreed that financial experts can provide valuable input into the economics and financial implications of the structure.

The Panel wrapped up with their top tips, ala Dave Letterman style, for financial experts:

  1. As an expert, help the attorney get the client focused on the financials
  2. The attorneys are relying on the financial expert for sound financial advice, be sure that you are communicating with the attorney
  3. Get to know your client, it will help you help them craft a settlement
  4. Avoid being a firms’ or attorney’s expert
  5. Credibility is everything for financial experts
  6. It is okay to admit that you don’t know something, that builds credibility
  7. Don’t try and testify to expertise you don’t have – you’ll lose credibility
  8. Know your judges and magistrates
  9. Don’t appear to be overly vested in the case
  10. Communicate clearly and not in “accountant speak” with your client

 

I’ll be blogging from the conference on Friday about the latest in computer forensics to detect corporate fraud.  On Saturday we have a live mock trial and jury deliberation and I will be sitting on a panel afterwards to discuss how to present your opinions to a jury.  Leave a comment if there is something you’d like for me to ask our live jury and experts about presenting damages and financial information to a jury!

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