In re Marriage of Kilbourne is a older family law case which addresses the issues in valuing a law practice so that the parties can divide the value of the business in a divorce.
The parties were married for more than 12 years, and the husband owned his own law practice. The wife hired an expert to value the law practice.
The wife’s expert valued the law practice using the work in progress method and the time rule method. The expert excluded from calculations those cases with unpaid contingency fees and the family court reserved jurisdiction over the distribution of funds from cases that had not been settled but were opened before the date of separation. The husband appealed the reservation of jurisdiction over unpaid fees.
The appellate court held that the reservation of jurisdiction was proper. For law firms, the major asset is generally the rendering of professional services and not the capital assets of a business. Therefore, the accounts receivable and the work in process are both assets the court must value for a law firm. Since the cases had not been settled, giving them a value would be speculative. The reservation of jurisdiction was a valid way to preserve the issue.
If you need legal advice and are looking for a family law lawyer in Orange County to address a dissolution issue such as the value of a business or any other divorce matter such as legal separation, annulment, custody, child support, spousal support and/or property division, please consider Treviño Law in your divorce attorney search. We are located in Laguna Hills right off Lake Forest exit to both the 405 and 5 freeway.
Although the posting of this information can be considered free legal advice for a divorce in Orange County, it does not address other factors which may play a significant role in a particular dissolution. Circumstances in your divorce may alter the results in your dissolution.
Please note that this legal advice does not establish a family law attorney-client relationship. This is a legal advertisement for Treviño Law, Inc.