How to Set Up and Develop a Divorce Practice

Each year, more than two million Americans become involved in a divorce. In a majority of the cases, attorneys represent the husband and wife. In an increasing number of cases, an accountant also is used to assist one or both of the attorneys in the divorce process. An accountant also may be engaged by the court to represent both spouses.

An attorney may ask the accountant to serve as a consultant or as an expert witness and to provide financial calculations for settlement negotiations. These financial calculations generally include:

• Determining the amount of alimony and child support.
• Identifying and valuing marital assets to be distributed in a settlement.
• Performing forensic examination procedures to uncover assets and/or income not disclosed by one or both of the parties.

One of the complexities that can occur in a divorce, where the relationship between an attorney and accountant becomes especially important, is the issue involving the distinction between separate and marital property. According to New Jersey law, a marriage is an economic partnership, and property accumulated during the marriage is to be divided equitably upon divorce, regardless of which spouse holds legal title. Separate property, as defined by the statutes, usually remains the property of that party.

Separate property consists of all property acquired prior to the marriage, inherited or gifted by a third party. If an asset was acquired prior to the marriage and there is an increase in value due to the direct efforts or work by the other spouse, the increased value may be marital property. Such issues require an in-depth review of financial records and, that being the case, an attorney will need the services of an experienced divorce accountant.

If you are considering starting a divorce planning practice, first consider whether you or your firm have the skills needed to successfully perform the services required by divorce/matrimonial attorneys. Attorneys usually prefer working with accountants who possess:

• Strong analytical skills and a capability for identifying and analyzing problems quickly.
• An awareness of legal concepts and the ability to talk the 'legal language.' It is important to be aware of specific legal issues, as well as the case law that pertains to each individual case.
• An ability to work with minimal supervision.
• A capability for dealing with the pressure of cross-examination by opposing attorneys.

The best way to begin a divorce practice is to work directly under the supervision of an experienced divorce accountant. You can gain a wealth of knowledge by working side-by-side with an experienced person and assisting in the preparation of various reports covering the results of an engagement.

If you decide to pursue the area of divorce planning, continuous education is essential. The American Institute of CPAs offers national conferences on divorce-related topics, including the "AICPA Advanced Conference on Divorce," "The AICPA Business Valuation Conference," and "The AICPA Advanced Litigation Services Conference." In addition to these conferences, the New Jersey Society of CPAs and the various bar associations offer a variety of courses on divorce topics. An upcoming NJSCPA conference is "How to Avoid Getting Burned in a Divorce: Tax Traps, Tricks and Planning," on Tuesday, October 23, at The Mansion on Main Street, Voorhees, NJ.

There currently is no special certification available for accountants providing divorce services. However, various organizations offer certifications relevant to CPAs who provide specific types of litigation services. There are many benefits associated with expanding your or your firm's services to include divorce planning. First and foremost is the potential to increase the profitability of your firm. Divorce services can usually be billed at higher rates. Other benefits include strong market demand created by a high divorce rate and an increased reliance by attorneys on the assistance of accountants. Plus, the service is not seasonal.

To successfully grow a divorce practice, it is important to market your services. Since much of your divorce work will be obtained through referrals from lawyers, it is imperative to develop and maintain contacts with lawyers specializing in family law.

Begin building your client base by contacting those attorneys you have worked with previously on other matters. Inform them about your new divorce planning services and how you can assist them. Your base can be further expanded by asking your current clients for introductions to new attorneys, joining divorce-related associations, accepting speaking engagements and giving presentations at meetings attended by family law attorneys. Other forms of marketing include:

• Advertising in the yellow pages or professional publications.
• Setting up a website.
• Sending newsletters to existing and potential clients.
• Leaving brochures in waiting rooms and mailing them to clients.

Of course, one of the best ways to ensure future business is to provide high-quality service. The first time you work for an attorney on a divorce engagement, the attorney will be watching you closely. Make a good first impression and you'll increase your chances of obtaining new clients through the attorney's referrals. No matter what marketing methods you choose, make sure to monitor them regularly to verify that they are working as planned.

The field of divorce accounting can be very exciting, but as with any type of service, you will encounter challenges and frustrations. When a marriage fails, both the husband and wife can become emotional and often hostile toward one another. The desire to seek revenge is not uncommon and there may be a lack of cooperation from both parties. This requires being able to handle people with a combination of patience, empathy and professionalism. In addition, it is not uncommon to find that much financial information is either lacking or difficult to obtain.

Challenges aside, divorce planning services present an opportunity to expand your client base, branch into new areas and increase your revenue. The unique skills we possess as CPAs also provide us with a particular advantage for becoming an integral part of the divorce settlement team.