Speaking Out on Financial Abuse: Joe Dillon on Mediation vs. Litigation

Host: Lorie G., Speaking Out on Financial Abuse
Guest: Joe Dillon, Equitable Mediation Services

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Lorie: Hello and welcome to Speaking Out on Financial Abuse – stories of survival and hope after financial abuse in a marriage or romantic partnership. I’m your host, Lorie G. Are you thinking of divorce but afraid to go further because you fear you’re going to lose your shirt and your sanity over an indefinite period of time? Our guest today has another option for divorce that might save you a ton of money and years of legal agony.

Today I’m excited to welcome divorce mediator Joe Dillon. Joe is co-founder with his wife Cheryl of a full-service divorce mediation and coaching business that serves a wide portion of the United States. Joe is going to tell you how to get out without losing your mind and without losing your future. Joe, welcome to the program.

Joe: Hi Lorie, thanks for having me.

Lorie: Where in the world are you now and where are you originally from?

Joe: Right now I am in Southern California in the San Diego area. Like the old song goes, it never rains in Southern California, but here we are in the middle of July and it’s pouring, which is very odd because we usually stop getting rain in May and it doesn’t kick in until about December.

I’m originally from the New York City area, from northern New Jersey, with a stop in Chicago along the way. I’ve definitely gone coast to coast and it’s been interesting seeing the country and getting to know different cultures. I can tell you all the stereotypes about Southern California are true – people love to surf, everybody’s very laid-back, it’s all about the beach. Being originally a native New Yorker, it’s all about go, go, go.

Lorie: What was money like growing up in your own household?

Joe: My parents were pretty cooperative when they were married. I’m a child of a litigated divorce. My dad worked in construction, so he got paid every Friday. He’d take his check to the bank, they’d cash it, and they’d sit down at the table Saturday morning. I remember they had this system with envelopes – they’d put money for the electric, water, mortgage. They worked together very well.

But when I got a little older, probably about 11, things started falling apart. My dad started going out more, buying things. My mom wasn’t working outside the home – she was busy raising me. When she saw that, she got a part-time job because she was wondering what was going on.

Then they litigated their divorce, and it became a really drawn-out, contentious battle. One thing I remember as a kid – I was in high school when the divorce finally settled – is that one day the alimony checks just stopped coming. My dad just decided he’d had enough and wanted to spend that money elsewhere. I came to learn he was getting remarried.

They both spent a lot of money on the divorce, and my mom just didn’t have the money or emotional bandwidth to go back after him and get the alimony agreement enforced. That’s a form of financial abuse – you take this legally binding agreement bestowed by the courts and just decide to ignore it, counting on the other person not being able to enforce it.

That’s when my mom started working multiple jobs. I was becoming a junior and senior in high school, getting to college time. So that’s what I saw – they went from being very cooperative to very antagonistic. It was an unfortunately powerful message that things can change in the blink of an eye.

Lorie: When you say litigated divorce, you mean using attorneys and going to court as opposed to using a mediator. What’s the difference between hiring a divorce attorney and hiring a mediator?

Joe: The attorney is going to fight for their client and their client only. They’re going to represent and advocate – they’re only concerned about that one person’s interests. As a mediator, I’m concerned about both parties and their kids. I advocate for both of them and their children when applicable. I want the family unit or the detached couple to have the best agreement – not just the husband or just the wife. I want them to collectively have the best agreement.

When I go in that way, I explain that I work for both of you, acknowledging that to come to agreement, you’re going to have to both give and get. If you want to get something, you’ve got to be able to offer something in return. With attorneys, it’s “I want to get something, but I’m not going to give anything in return,” and that just grinds and grinds.

Attorneys are very focused on the law, getting what the statutes say. Their thinking tends to be very much in the box, very linear, and they’re just concerned about the settlement. As a mediator, I tend to be outside the box. I try to be creative and come up with settlement agreements that work for the couple – unique agreements that fit their own profile.

I’m concerned about not only their agreement and how they get there, but also their emotional well-being. I know from seeing my parents that litigated divorces will destroy you. They drag on for years and destroy your nervous system. It’s bad enough your marriage is ending – now you have to go through another two to three years of hell to end it. Mediation takes a few months and helps you move on with your lives.

Lorie: I can imagine that must save a huge amount of money to use a mediator as opposed to an attorney.

Joe: Litigated divorces cost hundreds of thousands of dollars. People say, “Oh, that’s not going to happen to me,” but yes, it is. You focus on those two or three issues where you’re just digging in on your positions – “This is black. No, it’s blue” – and you’re not getting anywhere.

As a mediator, we focus on what we call interest-based negotiations. That’s my forte, my background. Instead of arguing about what we think the answer should be, we ask: What do you have an interest in doing? I have an interest in putting my kids through college. Great. I have an interest in not spending a lot of money on divorce. I have an interest in keeping the house. Great – let’s find something you can offer to the other side so they’ll be agreeable to let you keep the house.

This reframes the conversation. It’s not a screaming match where the loudest voice wins or the most expensive attorney wins. We’re trying to get you to understand this is a cooperative process where you can spend thousands instead of hundreds of thousands of dollars.

We even had a client who called us after litigating for seven years and spending close to $800,000 on their divorce, and it still wasn’t resolved. Obviously something was preventing them from agreeing after seven years and $800,000.

Lorie: What are some of the common things you see a partner do to try to hide assets or income during divorce?

Joe: A lot of mediation is centered around debt, believe it or not. If you’re spending money out of a joint bank account, someone’s going to notice the balance goes down. But if you’re amassing debt on a credit card that’s only in your name and you grab the statement or use paperless statements, the other party has no idea what you’re doing.

We see several instances. One is the rise of the internet millionaire or billionaire – folks convinced they have this great app or startup investment that’ll make them billionaires. They keep throwing hundreds of thousands of dollars at startups while the other person has no idea how much money they’ve promised or invested. Of course, 99.99999% of these fail.

Another thing is day trading – trying to beat the market with margins and options. I have an MBA in finance and that’s complicated even to me. Those losses are accruing in an investment account that might not be visible to the other spouse. They’re not sitting on some credit card or being drawn out of a checking account. These are losses that are accruing, and this person may have to come up with $80,000 – that’s an ugly surprise.

But the most common one I see is gambling, and that’s my soapbox issue. I’m sick and tired of everything being sponsored by FanDuel and DraftKings. I’m trying to watch a baseball game and some little scroll crosses the bottom: “Odds of Kyle Tucker hitting home run 1 in 600. Place your bet now.” We’re an addicted nation.

When we think of addicts, we think of the drug addict in the alley, but there are a lot of addicts addicted to the dopamine of gambling and risk. They’ve got the app on their phone and they’re just amassing debt or doing online poker or betting on sports, dissipating assets left, right, and center.

When we think about financial abuse, sometimes we think of someone being overtly abusive, withholding money, using money as a weapon. But financial abuse takes many forms, and one is spending our money on nonsense like this – bankrolling your bookie from your kid’s college fund.

Lorie: How do you balance it when you notice you have a more aggressive partner and a more passive individual at the mediation table?

Joe: One of the things about being a numbers person is you like structure, process, spreadsheets. Over many years, we’ve developed a structured process we take clients through. Sometimes they push back because sometimes someone thinks they can use mediation to get around the legal system and pull one over on somebody.

What they don’t realize is that someone like me with a financial background lives for this stuff. I love digging into numbers and asking pointed questions because I want to help my clients, but I’m also genuinely interested.

Some people think mediation will be less invasive, that because I’m not a lawyer, they can walk right over me. What I remind people is that I don’t require you to have an attorney in mediation, but you always reserve the right to have a lawyer review your agreement. If I see something concerning, I’m going to require you to do that.

The number one mistake a client can make with me is saying, “Why do you need a copy of that?” As soon as I hear that, my alarm bells go off. I put up the red flag and say, “Why do I need a copy of that? Because I said so.” If you push back, I’ll tell you about what a forensic accountant does, what a lawyer does, what a judge will do.

Just because I’m not representing one party doesn’t mean I’m not advocating for both. If I see someone being taken advantage of who’s at a disadvantage or financially illiterate, I’m the playground bully you’re going to bring to the fight. I’m trying to explain what we need and how this works.

Lorie: How did you become involved in this part of the legal field?

Joe: I’m not a lawyer by trade. My background is MBA in finance and negotiation. When I was working for corporations – publishing companies – I was director of sales administration with the sales department and legal department reporting to me.

Sales people just want the sale and their commission – they’ll give away the farm. The legal department doesn’t want to give an inch. Meanwhile, the poor customer who wants to give us millions of dollars is saying, “When you figure out your internal squabble, let us know and we’ll cut you the check.”

I was mediating between the customer, attorneys, and salespeople to get everyone to agree to terms. I realized I enjoyed helping multiple parties come to agreement. So I took coursework at Harvard University – the Harvard program on negotiation taught by Fischer and Ury, who wrote “Getting to Yes,” the modern treatise on interest-based negotiation.

After some years in corporations with downsizing and buyouts, I was having lunch with my mother-in-law who said I should be a mediator. I spoke to a friend of hers who was a mediator for the police union in Jersey City. I thought about where I could do the most good with my background in finance and negotiation, and decided on divorce mediation because my parents litigated their divorce.

When you think about divorce, you have child support, alimony, and property division – three of the four issues are financial in nature. Even parenting plans are inputs into child support calculations. So three and a half of them are financial, and my background really comes in handy.

I try to help people avoid what happened to me. I literally had to get a haircut and put on a suit at 15 years old to sit in the back of a courtroom so I looked nice and the judge would give us good child support. That’s how I spent my teenage years – in the lobby of lawyers’ offices. I’m the walking billboard of what not to do.

Lorie: What are some digital courses you offer?

Joe: We have four courses. One is free about what divorce mediation is. Of our three paid courses, the first is our financial preparation kit – it helps you wrap your brain around tactical steps to prepare. We have proprietary budget workbooks to help you plan and show what your marital spending looked like. We teach you how to put together a budget for moving forward because you’re going to be a separate financial entity once divorced.

The second is our planning for divorce course that expands on that and goes into emotional aspects – caring for yourself, telling your kids, caring for your kids through the process, explaining parenting, child support, alimony, property division.

The third is how to negotiate a divorce course, which is my favorite. It teaches actual negotiation tactics that professionals use – there’s a lot of psychology, technique, and preparation that goes into this. A colleague calls it “soft power” – it’s not screaming “This is what you’re going to get.” It’s going in calm, organized, with what you know you’re willing to give to get what you want.

The financial prep takes a Saturday afternoon. The planning course and negotiation course each take four to six weeks if you do one module per week, though you can do them faster.

Lorie: Can you explain what a divorce coach is?

Joe: When I work with people, I’m focused on financial matters, tactical matters, drafting agreements. I’m a nice guy, but my job is to help you move forward, not handle the emotional aspects of divorce.

A lot of folks make their attorney their best friend, complaining about how their spouse didn’t pick up their jacket or never goes to family events at an hourly rate. That’s not the person you want to talk to.

A divorce coach like my wife helps you work through emotions and feelings, diffuse tensions, work on strategies and negotiation techniques so when you get in session, you’re not triggered. She works on strategy, mantras, keeping you calm, helping you formulate your strategy for moving forward.

Even in situations with financial abuse – and I want to be clear, men and women can both fall prey to financial abuse – she helps them say, “I deserve this. I want this. This is what I need.” She helps them work through that and stand up for themselves. She’s like your cheerleader, an educated best friend with professional background in psychology and certified professional coaching.

Lorie: How long does the average mediation last?

Joe: For us, probably somewhere between 10 to 14 weeks because of our structured process. We meet with you up front, formulate strategy, negotiate, draft, review. Then you’re at the mercy of the courts – some have no waiting period like New Jersey, while California has a six-month waiting period.

The good news is the substantive part of your divorce is the negotiation and drafting. If you can get through that in two to three months, you’re just waiting for the powers that be. Litigated divorces probably take 2 to 3 years, and scheduling is much harder with two lawyers and two people versus one mediator and two people.

Lorie: You charge a flat rate, which is different from the endless gravy train of attorney fees.

Joe: Exactly. When we meet with prospective clients, I gather information and share how our process works. I go away and put together customized options – we don’t have the same flat fee for everyone, but based on the level of service you want, we can offer basic mediation or more comprehensive services.

The flat fee says to them, “I’m willing to put my reputation on the line to say we can finish this, and I’m counting on you to do it with me.” It’s not open-ended – I want to move you to agreement, not rush you to agreement, but keep us focused on the end game.

We have a 98% case resolution rate. We lose one client every 2 to 3 years, usually because of financial impropriety – a tax return that wasn’t filed because they owe $300,000, another family in another country, a bank account, or a business startup someone drained their 401k for that no one knew about.

Lorie: What’s your advice for somebody considering divorce – should they hire an attorney or secure a mediator?

Joe: I’d always say start with mediation first. Talk to mediators and be transparent. I tell prospective clients, “I want you to get the best result in your unique situation, even if that means not working with me.” A good mediator will ask questions and get a feel – that comes from mediating for 28 years.

Sometimes I’ll tell people right at the end of our initial meeting, “I don’t think mediation is a good fit, or at least we aren’t a good fit for you.” The good thing about mediation is it’s not legally binding until you say it is. You can always try it, and if it doesn’t work out, you can escalate to attorneys.

Even if you don’t come to a full agreement in mediation, you still save time and money because you agree on some things. You bring that to your attorneys and say, “Here’s everything we’ve agreed on. Let’s just focus on this handful of issues.”

Lorie: What’s your advice for someone who has had very little financial control in a partnership and doesn’t have much financial understanding but has agreed to use a mediator?

Joe: Build your team. That team includes a financial advisor and a CPA. Offer to take them to lunch, buy an hour of their time. These folks have spent their lives studying this – it’s their job and how they earn a living.

Buy an hour with a CPA to pepper them with questions and gain financial understanding. Reach out to a brokerage house – you can find younger professionals who are more willing to give you education. When your settlement happens and you walk away with some amount, you’ll have a professional who can help you grow it.

An accountant and financial professional can really help you understand where your knowledge gaps are so you can fill those blanks in.

Lorie: Where can people find you?

Joe: You can find us at equitablemediation.com – be sure to spell it mediation, not meditation. We practice in six states: Washington, California, Illinois, New York, New Jersey, and Pennsylvania.

If you’re in one of those states, you can book a free info call with Cheryl. Click on the learning center button for hundreds of blog posts, podcasts, videos, and courses organized by categories. Get educated and get knowledge, because knowledge is power. You don’t need to know everything, but you need enough information to ask intelligent questions.

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