Pro bono representation perpetuates the illusion that his career is over and he can’t pay alimony. Past tactics argue otherwise.
In retrospect, quitting a $5 million law partnership to free up more time to volunteer around the White House was a classic divorce court maneuver.
Rudy Giuliani has used similar techniques before, deliberately pushing big paydays out past the support decree so he’d be the only one to benefit from the income.
Last time, he carved out enough assets and took on enough debt that his lawyers could claim with a straight face that he was only worth $7,000.
This time, he’s apparently borrowing money from those lawyers to pay his tax bills because the accounts are locked down while alimony talks drag on.
But he’s in a better position now. There are a few twists that make this particular split especially complicated.
Public service versus retirement
Not every slowdown in paid work is deliberate. Sometimes someone gives up a highly compensated position in order to accept a role in public service.
In other situations, the offers simply dry up. And at 74, Giuliani could always simply step back or retire completely.
These considerations were already in the air before his third wife filed divorce papers early last year. At the time, he was talking himself up for Attorney General or another high-level government position.
Those jobs just don’t pay enough to support his jet-setting lifestyle. According to his spending logs, he’d burn through a cabinet member’s salary in about three weeks.
Giuliani used to pad out his law firm checks traveling the world as a security consultant and motivational speaker.
However, a full-time public servant doesn’t have a lot of room to write his own ticket. He would’ve had to give all that up for the duration.
As eager as he was for join the administration back in 2016, I suspect he would’ve embraced the economic constraints as a kind of victory lap with a side of early retirement.
After all, his consulting firm would go on purring in the background. He’d still own it and participate in its income even if ethics rules would have pushed him personally out of the day-to-day operation.
But even now, “early” retirement looms. He’s already bought a lot of houses in Florida, Manhattan, Long Island. Court discussion suggests he’s worth $30 million.
He can stop any time to work on passion projects. Evidently being embedded in the White House legal team for free is one of those projects, even though it cost him the $5 million partnership.
Even his lawyers say he’s still making $5 million a year, which is a good thing when you’re still spending $250,000 a month and your estranged wife’s standard of living matches.
On that basis, the judge would deal out the houses and retirement accounts, split the $5 million as far as it goes and each spouse would need to live on maybe $135,000 a month after tax.
It’s a step down for both parties. So is actual retirement in most cases. If he decides to step away from the outside gigs that $5 million vanishes.
After all, you can’t split income that isn’t actually there. Less cash coming in forces tough budget choices whether you’re staying together or not.
Do lawyers work forever?
If anything, accelerating spending now ensures that the Giulianis burn through more of their marital assets while they’re still nominally drawing from the same bank accounts.
He wins because he can theoretically always find another law firm eager to boost its profile. After all, he’s moved his practice before.
And as his lawyers argue, current wife Judith can always go back to nursing. She’s only 64 and has a little time left to earn a living.
Just not the kind of living that burns through $250,000 a month. That’s all on his remaining career earning power, or at least what the experts his lawyers find will confirm.
I’ve consulted on these kinds of cases for asset managers in the past. Projecting income is all about making the statistics dance and assuming that the historical performance roughly reflects future compensation.
His team will want to argue that he’s washed up and will never earn $9-10 million a year again. The White House keeps him too busy, he’s too old and so on.
But then I think of Hollywood, where a lot of stars in their 80s and 90s keep taking any role they can to make their alimony payments. An old celebrity lawyer can find ways to make money.
Giuliani might have big prospects lined up once the divorce decree is finalized and he can stop playing around with pro bono work. Suddenly his “meager” $5 million a year doubles or even triples. Judith can’t have any of it.
He did it before, delaying a multi-million-dollar book deal until he knew it was out of the marital estate and he no longer had to share.
On the other hand, I have a feeling the Giulianis aren’t quite the big spenders their recent paperwork suggests. Their expenses are probably as exaggerated as his income prospects are discounted.
He naturally wants to burn down the marital estate as much as he can while it’s still “his” money. And she has a similar motive to spend, not to mention the incentive of being able to lock in a more lavish pre-divorce standard of living.
Support is all about what you can claim you need. This is her chance to make sure all the houses are well appointed all her country club bills are paid.
Back to the “retirement” model
In a way this is her retirement package. Being Rudy’s wife was her job and now she’s cashing out.
Of course it’s unsustainable. On their reported budget, they’ll burn through their estimated $30 million in assets before 2025 if Giuliani decides to stop working, stretching that period year to year as long as he keeps earning a paycheck.
Again, he’s 74 and a prostate cancer survivor. But she’s a decade younger and could theoretically outlive her half of the existing marital assets.
The more income she can lock in, the less she has to worry. The fact that objective runs directly opposite Giuliani’s desire to spend those same dollars on his current girlfriend is why some divorces are more contentious than others.
And maybe he’ll retire soon, work for nothing for clients he considers important, live on what the consultancy brings in.
He’s ultimately looking for a version of a comfortable retirement as well. In the meantime, he takes the cases he wants and lets the compensation sort itself out. It’s more a matter of nuance than any formal announcement that he’s ready to let the license lapse.
Arguably everything he’s done for years has been just the kind of victory lap that a more formal White House role would have provided. As long as he has cash to pay the bills and enjoy himself, the work/play line blurs.
He’ll be all right when the divorce is settled. So will Judith. Everything else is just numbers up for negotiation.
