I really think that involving a lawyer at this point would be jumping the gun. If she publishes it as fiction - then that's all it is. If not, then you would have to read it to know if she says anything that would be derogatory/slanderous, and warrant action on your part. She's within her rights to write and publish a manuscript and there's not much you can do about it, unless it is harmful to you or the kids.
How did you find out about this anyway? Could it be that she's just blowing smoke???