Attorneys in California are not permitted by the state bar to accept contingent fee arrangements or a percentage of pay at the end of a family law case based on financial gains or “winnings.” But many couples have a really hard time coming up with the money needed to hire an experienced attorney to get them through what could be the most financially significant challenge in their life. One option for paying your attorney is to request the other party pay attorney fees, either based on need and ability, or based on punishable behavior or sanctions. If the Court refuses to issue an attorney fee award, another option is a “FLARPL.”
A FLARPL is a Family Law Attorney’s Real Property Lien. It allows an attorney to have equity in only their client’s interest in real estate to cover fees that are earned or anticipated to be incurred in a divorce or separation proceeding. Family Law section 2034 was revised in 2011 to expand the power of courts to approve FLARPL’s to ensure that people in complex cases involving substantial issues have access to representation.
To be a reliable form of security, the property that encumbers the lien must have enough or significant equity to cover costs and fees at the end of the divorce. For example, an attorney determines that a home owned by the divorcing couple is community property, or is owned one-half by each party. This home has a fair market value of $700,000 and a mortgage of $200,000. This leaves $500,000 in equity, or profit after sale. Since the home is community property, this means your client will have a $250,000 interest in the equity. If the attorney attaches a lien or promissory note in the amount of $20,000, he or she would be satisfied that adequate security exists in the home to get paid at the end of sale. The lien and deed of trust are signed by the client and attorney, and then gets recorded.
FLARPL’s are not favored by attorneys. They are considered to be the least attractive means for securing that fees will be paid, mainly because they must wait until the end of the case and the end of the sale of the house to get paid. The positive side is that when they do get paid, they get paid in full.
If you are concerned about how to pay for your attorney fees, or if you will be required to pay the other party’s fees, then contact a family law attorney with Cage & Miles, LLP today to discuss your options. We offer free 30-minute consultations. Call (858) 376-7251 to schedule one today.