As part of wrapping up our book on divorce, custody, and child support laws in the 51 jurisdictions nationwide we talk to a lot of divorce litigators. We’ve talked to nine litigators since the Ellen Pao v. Kleiner Perkins jury came back and asked all nine “What do you make of the Ellen Pao case that has been in the news?” One litigator had been busy handling a trial and hadn’t heard about the Pao case. Among those attorneys who were aware of the Pao lawsuit, the first reaction was the same for 6 out of 8: “If you want to get paid for having lady parts you go to Family Court, not Superior Court,” was how one of the 6 phrased the general idea. “If she wanted money, what was she doing with a junior partner?” was an alternative response along the same lines. “Pregnancy with the boss is a better financial strategy than having a fling with a co-worker,” said another lawyer.
[What did the divorce attorneys who did not immediately volunteer the child support profiteering alternative lead with? “When I stage a gender war my client is going to win; the only question is how much.” and “Law firms are always desperate to have more women partners and will give a qualified woman a lot more breaks and chances than they would give a man.”]
How do the numbers work out? Pao’s boss was Kleiner Partner John Doerr, listed by Forbes as having a fortune of $3.4 billion. Let’s assume that a California family court would have imputed 7 percent per year in income to those assets and/or that Doerr actually can earn 7 percent per year. That’s $238 million per year in income for calculating child support or roughly $20 million per month. The official California child support calculator shows that Ms. Pao would have collecting a tax-free $1.05 million per month in child support ($227 million over 18 years). If she had used her Harvard Law School education to study the the Uniform Interstate Family Support Act, in which a factor for obtaining jurisdiction over a nonresident such as Mr. Doerr is the nonresident engaged in sexual intercourse in the state and “the child may have been conceived by that act of intercourse,” she could have made a lot more money accompanying Mr. Doerr on business trips to states where children are more profitable. For example, if Pao could have persuaded Mr. Doerr to have sex with her in Wisconsin she would have been entitled to between 10 and 17 percent of Doerr’s income over an 18-year period. That would have been as much as $728 million. Sex in Massachusetts and New Hampshire would also have yielded a better return than sex in California.
By spending one night with Mr. Doerr, Pao would have been in a good position to profit from any future period of inflation. State child support formulae are not inflation-adjusted. Thus if inflation rose to 9 percent per year and Doerr’s return on assets correspondingly rose to 14 percent in nominal terms, Pao’s child support profits would double.
In her lawsuit against Kleiner Perkins Pao had the burden of proof. To get $238 million in child support under California’s formula, however, Pao would have had the presumption on her side. Doerr would have had the burden to prove that he should be ordered to pay a different amount.
A divorce litigator with a tax background pointed out that had Pao prevailed in her discrimination lawsuit she would have had to pay income tax on at least the $160 million in punitive damages; child support revenue, on the other hand, is tax-free. Had Pao prevailed in her discrimination lawsuit she would have had to share her profits with her attorneys; she could have gotten guideline child support from a Kleiner partner, on the other hand, using taxpayer-funded child support enforcement personnel.
“Pao was sitting on something a lot more valuable than her Ivy League degrees,” concluded an attorney from a state with uncapped child support. “I just want to be there to represent her when Buddy Fletcher decides to go back to being gay.”
- my pre-trial posting on the Ellen Pao v. Kleiner Perkins case
- a post about how Ellen Pao showed that the U.S. moral landscape has changed
- post-trial wrap-up post
- Wall Street Journal report on Ellen Pao press conference; the comments show how different the WSJ readership is compared to the NYT! (and the photo shows that Pao is using my favorite Microsoft Natural Keyboard)
- WorldStarHipHop.com video regarding the opposite end of the child support spectrum from where Ellen Pao would have been