AAML NJ Blog

By Wilmington Trust | Leading provider of Investment Management and Financial Advisory Services | AAML NJ Bronze Sponsor

Wilmington Trust’s Meghan Shue, Head of Investment Strategy & Portfolio Construction, and Christy Watkins, Regional Investment Advisory Lead, discuss how women face unique challenges that highlight the importance of making planning a priority. They explore the characteristics that make women adept investors, and where opportunity exists for women to fulfill their potential as captains of their financial destinies, which is particularly important after divorce.

Read the full article: Women & Investing: A Stronger Grip on Their Financial Futures (wilmingtontrust.com)

Contact Sharon L. Klein, Head of Wilmington Trust’s National Divorce Advisory Practice at 212-415-0531 or sklein@wilmingtontrust.com to discuss ways Wilmington Trust can help your clients successfully navigate transition.

By: Nicholas Fecci | AAML NJ Gold Sponsor Marcum

Marital Lifestyle (Analysis):

The marital lifestyle or the standard of living experienced when a couple resides together during marriage can be a crucial element in divorce proceedings. Financially, how did the couple live while they were married? What amount and type of income supports this lifestyle? How much alimony/child support should be awarded to sustain this lifestyle? These questions can be answered by engaging a forensic accountant to perform a lifestyle analysis.

 

What is a Lifestyle Analysis, and what does it provide?

A Lifestyle Analysis is a thorough examination of the standard of living that a couple enjoyed during their marriage. This analysis is crucial to help establish a factual basis for the couple’s spending and saving patterns and overall financial status. Forensic accountants can paint a factual picture of the marital lifestyle and expected future spending through a diligent review of historical financial records such as bank, credit card and investment account statements, as well as tax returns, property records, and loan documents, to name a few.

By reviewing the above documents as well as interviewing the spouse who manages the financials (if that is a feasible option), a Lifestyle Analysis can play a crucial role in the divorce process, especially when it comes to the calculation of alimony/child support, uncovering hidden assets and identifying various sources of income.

 

Spending:

A look into historical spending from a party’s marriage can provide a benchmark for the future spending of each person. A review of the bank statements allows a forensic accountant to categorize individual transactions into the income and expense categories identified from the Case Information Sheet, taking into consideration the following:

·        Spending of the parties both individually and jointly.

·       Recurring and non-recurring expenses.

·       Dissipation of marital assets (depletion of marital funds), if any.

·       All of the above considerations can paint a picture of the amount required to maintain a similar standard of living post-divorce to help the parties and their attorneys determine alimony and/or child support payments.

 

Hidden Assets:

During a divorce, it is not unusual for one party to attempt to conceal certain assets from the equitable distribution process. Through a review of bank statements provided, forensic accountants can uncover various hidden assets by analyzing transactions within the account statements, such as the following:

·       Transfers to additional bank/investment accounts not known by one of the parties.

·       Payments to loan institutions uncovering additional assets purchased during the marriage.

·       Transfers of money to corporations or entities for investment in their business.

·       Uncovering hidden assets is essential to ensure a fair and equitable division of property during a divorce. Even though parties are required to be transparent in their financial disclosure, a thorough lifestyle analysis is an essential step in ensuring that all assets are on the table and considered during divorce proceedings.

 

Other Sources of Income / Earning Habits:

The Lifestyle Analysis can also provide insight into additional sources of income that may not have been disclosed, including but not limited to the following:

·       Spending in excess of reported income without accumulating debt can indicate additional, undisclosed sources of income or assets.

·       Review of the income tax returns can identify investment income such as interest, dividends, and capital gains. These income sources can also be identified and confirmed through analysis of bank statements.

·       Direct deposits from additional employment unknown to one party.

 

Once the entirety of income is disclosed there is a clearer picture of the true funds required to support the standard of living of the parties.

The above discussion is a glimpse of why a well-prepared lifestyle analysis can be essential in ensuring all income and expenses are identified during divorce proceedings. It helps to ensure the likelihood of an equitable settlement by revealing any discrepancies between the lifestyle maintained and the income and assets reported. It can also help the court make informed decisions based on the true economic partnership of the marriage, ensuring the dissolution process is not only legally sound but also adheres to the principles of fairness and equity for both individuals as they transition to their new, independent lives.

By: LEAP Legal Software

3 Habits of Successful Family Law Firms: Business Tips for Legal Professionals 

As a legal professional working in family law, you’re an expert in navigating legal matters, but your legal education might not have prepared you to successfully navigate another critical but often overlooked aspect of the profession: namely, how to manage the business of law. While business obviously isn’t the focus of family law, it’s important to remember that family law is also a business. In order to achieve the highest levels of success for you and your clients, you need to be able to negotiate the financials of lawyering in addition to the practice of family law itself.

In this article, we’ll look at 3 common habits of successful law firms to arm you with practical business tips that you probably didn’t learn in law school.

1. Dedicate time to building the firm as a business

For many lawyers practicing in family law in New Jersey, the word “sales” is an anathema. However, to maintain and enhance the financial security of their firms, attorneys have to get over their aversion to drumming up business.

If you want more clients and matters, you need to “sell” your firm, plain and simple— but it’s crucial to do this in a way that leaves your clients feeling satisfied and respected at the end of the interaction. Successful firms do this by ensuring that there is constant alignment between the legal services that they offer, what their marketing material says, and what they and their staff say when they are actually selling the firm’s services. It’s this alignment and consistency of messaging that builds a powerful reputation, which will eventually repeat more business and greater cashflow.

Tips for action:
Have a vision for the future of your firm and share it with your staff Be attentive to the concerns of disgruntled clients
Have a coherent and consistent marketing plan

2. Employ smart people and treat them well

In most family law firms, people are both your biggest expense and your greatest asset. When morale is low and the workplace is less productive as a result, your people can feel like a cost. On the other hand, when your team is satisfied, respected, and properly equipped to do their jobs, your firm will produce more value for its clients; in fact, research from the London School of Economics shows that satisfied employees do more for their companies. This rule applies to law firms both big and small.

To make sure that your firm’s employees remain satisfied and productive, it’s important to provide proper and regular training, equipment, and support, and in many cases, smaller law firms are turning to legal technology to help their employees succeed. 84% of law firm employees in a recent Statista report said that legal technology had improved their firm’s productivity. Proper technology, a welcoming environment, and regular training can help your firm do more with less.

Tips for action:
Organize regular training for your staff
Provide an enjoyable workplace environment
Provide the best tools for your employees to do their jobs

3. Become an expert in customer service
Attorneys don’t learn customer service in law school, but strong customer service

skills are one of the most important keys to success for smaller law firms.

Smart customer service begins with thoughtful communication; from the moment the clients walk through the door until the matter (no matter how big or small) is completed, successful attorneys keep the client fully and repeatedly informed about the progress of the matter. In doing so, they consistently demonstrate how the firm values the client, which helps build the firm’s reputation and bring in new business. Referrals from satisfied existing clients are a primary referral source for many firms, but lawyers sometimes forget this and, as a result, can often overlook the value of good customer service.

Successful law firms know that the success of the customer is integral to the success of their firm. These firms and their employees are always coming up with

new ways to better serve their clients, including self-service portals where clients can book appointments, pay bills and make deposits, view their matters, and more. Great customer service requires a smiling face—but it also requires proper tools and equipment to meet the client’s needs and expectations.

Tips for action:
Create a workplace culture that values good customer service Reward employees who go above and beyond for the client Keep in constant contact regarding matter updates

Smarter Business Practices Benefit Everyone

When you implement smart business practices at your firm, you’re doing your due diligence to secure its financial success, and, in turn, the livelihoods of everyone you employ. But even beyond that, New Jersey attorneys should understand that financially healthy firms provide a higher standard of service, which benefits their clients and the community at large.

For more practical tips on how to succeed in today’s legal world, download the free whitepaper, “11 Habits of Successful Law Firms.” 

By: Christopher Byrnes, MBA I Marcum LLP

Accuracy is not just a goal in business valuation—it's a necessity. Marcum LLP performs valuations regularly and understands that precise calculations and judicious adjustments are essential for reliable valuations. One of the most critical adjustments we make is determining 'reasonable compensation' for business owners, an aspect often overlooked yet vital for presenting an authentic financial portrait. This article delves into the nuances of reasonable compensation and its profound impact on business valuation, sharing why it must be carefully assessed to reflect the true economic health of a company.

Reasonable compensation is a critical adjustment in a business valuation as it ensures that the profit/loss recorded by the business reflects the true economic picture by adjusting for the appropriate level of compensation for the business owner. If an owner is over-compensated, the business might appear less profitable than it actually is, as would under-compensation inflate its profitability. Both scenarios would lead to inaccurate valuations. 

Numerous resources can be utilized to provide a guideline for reasonable compensation, as would using industry statistics of compensation within the owner’s industry. However, reasonable compensation is not simply based on job title and hours worked; it must also consider the annual performance. For example, the CEO of a consulting firm whose revenue is $5,000,000, where the CEO generates a small portion of the business revenues as compared to a CEO who brings in almost all $5,000,000 in revenue. If valuation experts were to utilize statistics based solely on the industry, the revenue of the company, and hours worked, they would have arrived at the same reasonable compensation for both CEOs listed above. However, this would not portray an accurate picture as an owner who generates $5,000,000 of revenue would obviously be entitled to a much higher compensation level than that of a CEO who originates very little in revenue. In this scenario, replacement compensation should consider what benefits the CEO brings to the company instead of only focusing on their hours worked and job title. 

For example, let’s compare the reasonable compensation levels of professional athletes. There are thirty-two teams in the National Football League, each with a starting quarterback. Over the course of a season and career, there will be significant differences in their statistics and success despite all having the same job and working the same hours within the same industry. If an athlete were hypothetically replaced, the amount paid would vary based on their actual accomplishments. The same approach must be utilized when considering each business owner’s reasonable compensation.

The art of business valuation hinges on the fine balance between numbers and judgment, and nowhere is this more evident than in establishing reasonable compensation. As we have seen, this is not a simple arithmetic or a one-size-fits-all approach but a complex consideration of individual contribution and industry standards. This is why choosing a firm with the experience of having valued thousands of businesses, such as Marcum, is paramount.

By: LEAP Legal Software | AAML NJ Silver Sponsor

As a legal professional working in family law, you’re an expert in navigating legal matters, but your legal education might not have prepared you to successfully navigate another critical but often overlooked aspect of the profession: namely, how to manage the business of law. While business obviously isn’t the focus of family law, it’s important to remember that family law is also a business. In order to achieve the highest levels of success for you and your clients, you need to be able to negotiate the financials of lawyering in addition to the practice of family law itself.

In this article, we’ll look at 3 common habits of successful law firms to arm you with practical business tips that you probably didn’t learn in law school.

1. Dedicate time to building the firm as a business

For many lawyers practicing in family law in New Jersey, the word “sales” is an anathema. However, to maintain and enhance the financial security of their firms, attorneys have to get over their aversion to drumming up business.

If you want more clients and matters, you need to “sell” your firm, plain and simple— but it’s crucial to do this in a way that leaves your clients feeling satisfied and respected at the end of the interaction. Successful firms do this by ensuring that there is constant alignment between the legal services that they offer, what their marketing material says, and what they and their staff say when they are actually selling the firm’s services. It’s this alignment and consistency of messaging that builds a powerful reputation, which will eventually repeat more business and greater cashflow.

Tips for action:
Have a vision for the future of your firm and share it with your staff Be attentive to the concerns of disgruntled clients
Have a coherent and consistent marketing plan

2. Employ smart people and treat them well

In most family law firms, people are both your biggest expense and your greatest asset. When morale is low and the workplace is less productive as a result, your people can feel like a cost. On the other hand, when your team is satisfied, respected, and properly equipped to do their jobs, your firm will produce more value for its clients; in fact, research from the London School of Economics shows that satisfied employees do more for their companies. This rule applies to law firms both big and small.

To make sure that your firm’s employees remain satisfied and productive, it’s important to provide proper and regular training, equipment, and support, and in many cases, smaller law firms are turning to legal technology to help their employees succeed. 84% of law firm employees in a recent Statista report said that legal technology had improved their firm’s productivity. Proper technology, a welcoming environment, and regular training can help your firm do more with less.

Tips for action:
Organize regular training for your staff
Provide an enjoyable workplace environment
Provide the best tools for your employees to do their jobs

3. Become an expert in customer service
Attorneys don’t learn customer service in law school, but strong customer service

skills are one of the most important keys to success for smaller law firms.

Smart customer service begins with thoughtful communication; from the moment the clients walk through the door until the matter (no matter how big or small) is completed, successful attorneys keep the client fully and repeatedly informed about the progress of the matter. In doing so, they consistently demonstrate how the firm values the client, which helps build the firm’s reputation and bring in new business. Referrals from satisfied existing clients are a primary referral source for many firms, but lawyers sometimes forget this and, as a result, can often overlook the value of good customer service.

Successful law firms know that the success of the customer is integral to the success of their firm. These firms and their employees are always coming up with

new ways to better serve their clients, including self-service portals where clients can book appointments, pay bills and make deposits, view their matters, and more. Great customer service requires a smiling face—but it also requires proper tools and equipment to meet the client’s needs and expectations.

Tips for action:
Create a workplace culture that values good customer service Reward employees who go above and beyond for the client Keep in constant contact regarding matter updates

Smarter Business Practices Benefit Everyone

When you implement smart business practices at your firm, you’re doing your due diligence to secure its financial success, and, in turn, the livelihoods of everyone you employ. But even beyond that, New Jersey attorneys should understand that financially healthy firms provide a higher standard of service, which benefits their clients and the community at large.

For more practical tips on how to succeed in today’s legal world, download the free whitepaper, “11 Habits of Successful Law Firms.” 

Practical Considerations in Representing the (Un)Happily Married (Pt. 3 of 3)

By Wilmington Trust | Leading provider of Investment Management and Financial Advisory Services | AAML NJ Bronze Sponsor

Spouses getting divorced. One is the beneficiary of a trust. Can trust assets be reached by the other spouse? In part 3 of this 3-part series, Sharon Klein discusses tax traps, creative planning techniques & practice tips when trusts feature on the divorce balance sheet.

Listen to Sharon L. Klein, EVP, President-Family Wealth, Eastern U.S. Region,  Fellow of The American College of Trust and Estate Counsel (ACTEC), explore the topic of attacking or defending trust assets in divorce in this 3-Part podcast series:

Part 1 – What to look for in the trust agreement

Part 2 – What to look for in the history of trust administration

Part 3 – Tax traps, creative planning techniques & practice tips

Listen to the full episode: Practical Considerations in Representing the (Un)Happily Married (Pt. 3 of 3) (actecfoundation.org)

Contact Sharon L. Klein, Head of Wilmington Trust’s National Divorce Advisory Practice at 212-415-0531 or sklein@wilmingtontrust.com to discuss ways Wilmington Trust can help your clients successfully navigate transition.

Experienced attorneys know that manual time-tracking methods often lead to underreported hours and lost revenue. In fact, according to a report from Thompson Reuters, 56% of lawyers admit to underestimating their billable hours. This means that many New Jersey family law firms are losing money due to inefficient billable hours tracking procedures.

That’s why a growing number of NJ family law firms are abandoning outdated timetracking software and embracing modern legal timekeeping solutions that use automation to track billable hours more efficiently. Unlike older legal software solutions, which require attorneys to manually track and input their time, today's leading timekeeping solutions offer billing technology that eliminates manual work and simplifies the process of getting paid for all the services provided to clients by law firms.

Outdated services no longer receive ongoing support or new product updates, but with the latest legal timekeeping software, you’ll get access to innovative features and other resources to ensure that your firm never misses a billable minute. In this blog, we’ll take a closer look at how this technology works and examine where it might be headed in the future.

How Modern Legal Software Boosts Profitability for NJ Family Law Firms

Innovations in legal billing technology have transformed the way that lawyers keep track of their billable time. Before the arrival of the latest timekeeping software, attorneys kept track of their hours through a variety of different means — either on pen and paper, in a spreadsheet, or in several legacy legal software programs. Each of these methods had its own inefficiencies, and each of these contributed to underreported hours and lost revenue for firms. But now, with today’s legal technology, New Jersey family law attorneys can rely on the power of cutting-edge features to improve accuracy in billable hours tracking and earn more money for their firms:

• Instant timekeeping to capture all billable work: Attorneys are busy, and during the course of a busy day, you might easily forget to check your watch or activate a timer to keep track of the minutes or hours that you spend working on a particular matter. With legal software available through LEAP, you no longer have to worry about keeping track of your time on a watch or in a spreadsheet. Instead of checking the clock, you can simply click a button, and have the time monitored and recorded for you directly in LEAP. 
• Streamlined timesheets to optimize time management: Legal professionals are used to bouncing from spreadsheet to spreadsheet and folder to folder, often navigating a vast mountain of paperwork, files, and programs in the course of a single day. When attorneys have to bounce between different spreadsheets or legacy software programs to record billable time, view financial reports, and access other crucial matter information, they risk wasting energy and time on tedious and error-prone tasks. But with today’s legal timekeeping technology, this is no longer an issue; you’ll be able to enter time for multiple matters in a single window, monitor your performance against budget, and even view a brief financial summary for the selected matter. 
• Mobile access to capture time on the go: Unlike outdated technologies, modern legal timekeeping technology is access via mobile device, making it possible for users to capture time from the courthouse, on the go, or from any other location with an internet connection. This is a huge development for all legal professionals, particular those in NJ family family, since they’ll no longer have to worry about losing or incorrectly recording billable time when they’re working away from the office. 

Future Outlook on Technology in Billable Hours Tracking

As legal technology continues to advance, the role of technology in legal billing will continue to expand, and NJ family law is no exception. According to the American Bar Association, 12% of corporate legal budgets will be spent on legal tech in 2025 — that’s way up from 3.9% in 2020. With the latest innovations in legal software hitting the market at a rapid pace, law firms can expect to see increased efficiency, accuracy, and profitability both in the near- and long-term.

One area of development is mobile apps, which enable particular lawyers to track their billable hours from anywhere, at any time. This means that even when they're on the go, they can easily capture every minute of billable work, reducing the risk of lost revenue. Another area of focus is automation, with new software continuing to streamline the time-tracking process and allow for more accurate and efficient billing. This technology can eliminate the need for manual input, reducing the risk of human error, and increasing productivity.

Both the future and present of legal timekeeping software are looking bright, with technology poised to continue its transformation of law firm productivity. By embracing new tools and staying up-to-date on the latest trends, family law firms can position themselves for success in years to come as the pace of innovation continues to accelerate. See how timekeeping software can make your NJ family law firm more profitable.

By: Leap Legal Software | AAML NJ Silver Sponsor

“LEAP is awesome! LEAP helps me to be more efficient at practicing law. The forms and auto-population help me to work smarter and not harder. The product and customer service have been fantastic!” — Lori C., LEAP User

Lawyers are known for working long hours. In fact, according to a recent Bloomberg survey, some attorneys even exceed 60 hours per week. While this might not come as a surprise to legal professionals, it does make us wonder: how are lawyers spending their time?

As all legal professionals know, it’s not always the case that lawyers are confined to courtrooms or boardrooms. In fact, a significant part of their workweek is likely spent on crucial but repetitive tasks such as data entry, legal form and document completion, and composing written correspondence. While these tasks are essential to a firm's success, they can be tedious, slow, and prone to errors that can be both costly and time-consuming to rectify.

That’s why legal publishing technology is helping family law firms in New Jersey boost productivity. By automating the creation of forms and documents, streamlining legal drafting, and supporting other key administrative and legal functions, legal publishing software is helping NJ family lawyers achieve optimal performance. These features enable family law lawyers to complete more work in less time, leading to increased efficiency and profitability, regardless of the number of hours they work per week. 

How Legal Publishing Technology Saves Time and Money for NJ Family Law Firms

Legal publishing technology offered by the LEAP legal practice productivity solution saves firms time and money by delivering five key benefits: 

1. Easily open matters: LEAP has over 3,000 pre-built matter types for all common areas of law, which means that LEAP users can easily create, modify, and resolve all of their matters through LEAP. Instead of creating a new matter framework from scratch in every instance, users can pick up where they left off with readymade templates, delivering a seamless user experience that helps professionals and firms be more productive than ever before.

2. Reduce mistakes with automation: Full Microsoft and Adobe integrations allow LEAP users to quickly create documents, forms, and letters with data pulled directly from the LEAP legal practice productivity solution. This means that users don’t have to spend hours of every month inputting the same client information over and over again. With LEAP, you can simply enter client information once — this information then auto-populates across all relevant fields, reducing errors by eliminating manual data entry.

3. Simplify document production: Before the arrival of legal publishing technology, legal professionals had to obtain and complete all necessary legal forms and documents by hand. But with LEAP, this is no longer an issue. Instead of scrambling to manually obtain and complete a document or form, LEAP can turn to a library of over 12,000 legal forms and documents that cover the most commonly used forms and areas of law in their state. LEAP also helps you import custom, firm-specific documents into the LEAP practice productivity solution. This makes the workday less stressful and more productive.

4. Streamline legal drafting: The LEAP Clause Library simplifies the process of legal drafting, which puts time back in the hands of LEAP users. With LEAP, you can access all of your clauses from one location and quickly insert them in another location with a single click. Expedite the drafting of contracts, forms, pleadings, and more, so you can increase your firm's efficiency and profits. 

5. Ongoing client support: Access free training resources like bi-weekly webinars to ensure you're getting the most out of automated forms and legal publishing features in LEAP. LEAP is committed to helping our customers get the most out of our platform and will provide ongoing support to ensure that our users are getting the greatest possible value.

Together, these features create new efficiencies within your organization that streamline operations and boost productivity. Save money with modern legal technology.

Go Further with LEAP 

As the only legal practice productivity solution, LEAP has been helping firms succeed for over 30 years. Our long-running track record of client success was one of the reasons why we were named “Best Software as a Service Product for Legal Services” at the 2023 SaaS Awards. It’s also one of the reasons why LEAP is the preferred technology provider for New Jersey family law firms.

LEAP offers best-in-class legal publishing features to optimize your firm’s operations. With a library of over 3,000 pre-built matter types and 12,000 of the most commonly used legal forms and documents, LEAP delivers unparalleled access to cutting-edge tools and automation services that deliver value from day one.

Schedule a demo today to see these features in action.

By Wilmington Trust | Leading provider of Investment Management and Financial Advisory Services | AAML NJ Bronze Sponsor

Spouses getting divorced. One is the beneficiary of a trust. Can trust assets be reached by the other spouse? In part 2 of this 3-part series Sharon Klein will examine what to look for in the trust's history to see if assets are vulnerable in divorce.

Fellow of The American College of Trust and Estate Counsel (ACTEC), Sharon L. Klein, EVP, President-Family Wealth, Eastern U.S. Region,  discusses an important step in analyzing whether trust assets could be on the table in the divorce proceedings, which is the review and consideration of the history of the trust administration. This podcast is Part 2 of a 3-Part podcast series:

Part 1 – What to look for in the trust agreement
Part 2 – What to look for in the history of trust administration
Part 3 – Tax traps, creative planning techniques and practice tips
 

Listen to the full episode: Practical Considerations in Representing the (Un)Happily Married (Pt. 2 of 3) (actecfoundation.org)

Contact Sharon L. Klein, Head of Wilmington Trust’s National Divorce Advisory Practice at 212-415-0531 or sklein@wilmingtontrust.com to discuss ways Wilmington Trust can help your clients successfully navigate transition.

By Wilmington Trust| Leading provider of Investment Management and Financial Advisory Services | AAML NJ Bronze Sponsor

Spouses getting divorced. One is the beneficiary of a trust. Can the trust assets be reached by the other spouse? 

Listen to Sharon L. Klein, EVP, President-Family Wealth, Eastern U.S. Region,  Fellow of The American College of Trust and Estate Counsel (ACTEC), offer 8 key questions to ask to determine if trust assets are vulnerable during divorce. This podcast is Part 1 of a 3-Part podcast series:

Part 1 – What to look for in the trust agreement
Part 2 – What to look for in the history of trust administration
Part 3 – Tax traps, creative planning techniques and practice tips

Listen to the full episode: Practical Considerations in Representing the (Un)Happily Married (Pt. 1 of 3) (actecfoundation.org)

Contact Sharon L. Klein, Head of Wilmington Trust’s National Divorce Advisory Practice at 212-415-0531 or sklein@wilmingtontrust.com to discuss ways Wilmington Trust can help your clients successfully navigate transition.