Innovation

The new way to get divorced

Written by Kim Shiffman

Hell. In a word, that¹s how Karen Stewart describes her divorce, which was sealed in 2004. The breakup dragged out over more than four years, exposing the couple’s three kids to the ugliness of the court system and costing Stewart upward of $500,000 in legal fees. What’s more, it created an irreparable rift between two people who still had to raise kids together.

The experience led Stewart, a serial entrepreneur in the financial-services industry, to question whether all the pain, suffering and expense had been truly necessary — and whether others were as frustrated with the traditional system as she was. “I started to wonder, ‘Am I alone here?'” she says. “Am I the only idiot who just dropped a fortune on legal bills?” She hired a market-research company to find out, and its report strongly confirmed her suspicions. In 2006, Stewart launched Calgary-based Fairway Divorce Solutions, with the intent of giving couples in Canada and the U.S. access to a faster, cheaper and less adversarial way to split up.

Stewart began franchising her model in 2008. She has sold 20 franchises in Canada and seven in the U.S., and expects to sell another 40 by the end of 2010. With plans to move into the U.K., Australia and Mexico in 2011, Stewart’s ultimate goal is to replace the traditional system and transform the industry “like Starbucks did for coffee shops.” With an innovative, potentially paradigm-shifting service that fills a burning need in the market and exploits consumers’ growing compulsion to seek alternatives to traditional ways of doing things, her goal just may be in reach.

The traditional system for getting a divorce is designed for conflict, says Stewart, as lawyers fight to get their clients the best deal: “There is almost always a tug of war, known as ‘position bargaining,’ over money or the kids.” And, she says, the process can take years and cost tens of thousands of dollars — more, if the situation is complex. What¹s worse, the decisions that create the final outcome may be coloured by emotions and financial pressures, which can result in a settlement that isn’t ideal for the divorcees or their children.

Founded on cooperation rather than confrontation, says Stewart, Fairway’s model is different. A couple engages Fairway together, then each spouse works separately with the same Fairway advisor through a well-defined, step-by-step process to negotiate an agreement. The advisor does not represent either party but helps the couple find a middle-ground position that’s acceptable to both; once it’s agreed upon, they move on to the next issue. The point is not for either party to win; rather, says Stewart, “It’s designed to get people to a resolution that’s fair.”

Fairway markets its service as being quick, often wrapping up the process within 120 days of receiving a couple’s financial documents. “We move people through the process quickly because we¹re in complete control,” says Stewart. “There are no interruptions, no waiting for trial dates and lawyers.”

As for costs, couples pay a flat fee based on the complexity of their financial situation, emotional issues and whether they have kids. Stewart says Fairway is “way cheaper” than the traditional system. (Fairway clients must still engage an attorney to look over and paper the deal.)

The foundation for Fairway’s success is built in part on consumers’ increasing willingness to reject conventional models in favour of time-saving, cost-cutting and stress-relieving alternatives, an ability supported by the information democracy known as the Internet. “Consumers are more empowered than I’ve ever seen them, and they’re more inclined to look at all their different choices,” notes Janet Lazaris, a consumer-trends expert and managing director of Toronto-based market-research firm Vision Critical.

Still, Fairway isn¹t the only alternative to the traditional method of getting a divorce. There are mediators, collaborative lawyers and even do-it-yourself kits. The burgeoning alternative-divorce industry is in direct response to a real need in the marketplace, says Brenda Cossman, a professor in the University of Toronto’s faculty of law. “We definitely need to find new ways to help people through the process,” she says. “The full retainer model isn¹t accessible to everybody. The cost of representation can feel astronomical to most Canadians. It¹s crazy how much it can cost.”

But in a rising sea of divorce options, Fairway must work doubly hard to inform the public about its services. It does so by investing heavily in marketing and advertising. It engaged public-relations firms in Canada and the U.S., as well as a branding company that, among other things, coordinates a marketing blast each time Fairway enters a new city. Fairway is also using Twitter, a blog and other online social media. “Our goal is to be top of mind,” says Stewart.

The company hasn’t had to work quite as hard to attract franchisees. To be awarded a Fairway location, you must have a legal or financial background, strong negotiating skills and be at least 35 years old. (“I look for people with a certain level of wisdom,” explains Stewart.) But despite the narrow field of potential franchisees, Stewart says, there¹s no shortage of promising applicants; she had 335 inquiries in February alone.

Getting this far hasn’t been easy for Stewart, even if she has sold 27 franchises. One of her biggest challenges has been fighting a nagging feeling of being alone: “The innovator’s journey can be quite lonely.”

She might not be lonely for long. By 2014, Stewart hopes to have grown big enough to be partially acquired. “When I decided to do this, I wanted to go big,” she says. “I plan to change the way divorce happens globally.”

Originally appeared on PROFITguide.com
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