THE CPA IN MEDIATION AND ARBITRATION

March 2000

BREAKING UP IS HARD TO DO: THE CPA AS DIVORCE MEDIATOR

By Anju D. Jessani

In divorce mediation, a neutral person helps the separating couple address the financial, parenting, and other decisions needed to restructure their family into two units. The two spouses usually meet with the mediator together, for three to nine sessions of 60 to 90 minutes each. At the end of the mediation process, the mediator prepares a memorandum of understanding that summarizes the agreements reached. Although attorneys generally do not participate in the mediation sessions, the two spouses are advised to have their attorneys review the memorandum. They may also use the services of an attorney to prepare their separation or divorce agreement, based upon the decisions reached in the memorandum.

The combined cost of mediation and attorney's fees is often less than one-third the cost of a litigated divorce, and lower fees are only the beginning of mediation's advantages. Couples that successfully mediate spare themselves and their families the bitter courtroom battles that often characterize an adversarial separation. For couples with children, mediation also provides a framework for resolving future disputes.

Who Are Divorce Mediators?

Most divorce mediators are attorneys, psychologists, social workers, counselors, clergy, or financial professionals. Some state and court programs require that family mediators obtain certain degrees and training, but many states have no requirements. At least initially, many mediators incorporate this specialty into their practice rather than create a separate unit.

The Academy of Family Mediators (AFM, www.mediators.org) establishes and maintains training and ethical standards. With approximately 3,200 members nationwide, AFM is the largest professional organization for divorce mediation. Approximately 50% of AFM members are attorneys, whereas less than 1% are CPAs.

How Do Mediators Get Started?

Interviews with three divorce mediators that are also CPAs reveal that training and hands-on experience are key to becoming a mediator. Jody Davis's training included observing mediations by a family counselor. He then co-mediated with a partner through a court-sponsored program for low-income families undergoing divorce.

"I've been a CPA for approximately thirty years and have seen the heartache and bad settlements that have occurred in divorces going to court," Davis said. "I've been an expert in divorce cases and have witnessed that during court proceedings, each side is trying to demonstrate what they want, not what will work for both parties. I truly love [mediation], for I feel I'm helping both parties now and in the future."

Becky Emerick, after conducting private mediations for three years, performed 10 hours of supervised mediations and also co-mediated divorce cases. In addition to being a CPA and a divorce mediator, Emerick is trained as a marriage and family therapist.

Paul Paris started providing divorce mediation services in 1978, when two clients asked him to mediate their divorce. In addition to his basic training, Paris took a 30-hour practicum that included observing other mediators as well as being observed. All three mediators also completed the AFM's basic training requirement of 40 classroom hours.

Divorce mediation accounts for 15% of Davis's practice, 40% of Emerick's practice, and 10% of Paris's practice. The three mediators discussed the trade-off of marketing accounting services, which have a long-term payback, vs. divorce mediation services, which have almost no recurrent business. The CPAs normally receive their standard billing rate for divorce mediation services, yet personal satisfaction appears to be a strong motivating factor. Mediators express a great deal of passion for their work.

"In just about all cases, both parties thank you, and you really feel good about it," Davis said. "You don't get this in regular accounting work."

Davis, who provides both mediation and expert witness work, indicated that expert witness work is potentially more lucrative. The hourly rate is slightly higher and other staff can assist in the preparation.

"Once I started doing mediation, there was a noticeable drop-off in the amount of expert witness work I was doing," he said. "Several of the attorneys that I used to do expert witness work for now want me to do mediation. Frankly, I would much rather do mediation than expert witness work."

Practice Issues for Divorce Mediators

The AFM Code of Conduct states that--

A mediator's actual or perceived impartiality may be compromised by social or professional relationships with one of the participants. If such services have been provided to both participants, mediation shall not proceed unless the prior relationship has been discussed, the role of the mediator made distinct from the earlier relationship, and the participants given the opportunity to freely choose to proceed. The mediator should be aware that postmediation relationships may compromise the mediator's continued availability as a neutral third party.

Providing mediation services to accounting clients previously served as a couple is usually not a problem for the CPA. However, providing postmediation accounting services to either individual would probably mean the CPA could not continue as the couple's mediator.

Each profession contributes a different set of benefits to divorce mediation. For example, attorneys generally have a better understanding of how a judge may rule on a particular issue. According to Davis, CPAs bring a broad financial understanding to the table.

"They have seen firsthand how poor settlements can affect one or both parties negatively for years to come," he said. "Understanding the tax ramifications and being creative in possible solutions can result in both parties coming out ahead of their original request."

Who Makes a Good Mediator?

According to the Mediation Information and Resource Center (MIRC, www.mediate.com), there is no universal answer to this question:

No particular type or amount of education or job experience has been shown to predict success as a mediator. Successful mediators come from many different backgrounds. Competence depends partly on the context of the dispute and the parties' expectations. It also depends on whether the mediator has the right mix of acquired skills, training, education, experience, and natural abilities to help resolve the specific dispute. Important skills and abilities include neutrality, the ability to communicate, the ability to listen and understand, and the ability to define and clarify issues.

Emerick and Paris agree that not every CPA can or would want to do this type of work, because of the emotional issues involved and the communication skills required. Paris indicated that divorce mediation is well suited to sole practitioners that do not typically leverage their practice. He added that the CPA must understand that in divorce, not everything is numbers-driven.

The field of divorce mediation holds much promise for the CPA willing to invest time and energy to get the necessary classroom and practical training. Providing divorce mediation services is emotionally challenging. The CPA's primary motive must go beyond financial rewards. *