What Lawyers Need for Successful ADR
Increasingly litigators look past the emotion of going to court, and pursue alternative dispute resolution (ADR) through arbitration or mediation as the best strategy to achieve client objectives. Doing so successfully of course requires understanding the law and the appropriate ADR techniques. But it also requires creating a foundation of trust such that the client accepts the idea that negotiation and settlement, rather than a fight-to-the-death approach, is in the client's best interests. These are some key points that any lawyer can emphasize to show the wisdom of taking a more conciliatory dispute resolution approach.
The adversarial nature of lawyers' training risks creating a win-lose mentality when dealing with opposing counsel. Such behavior often merely entrenches the opposition further. Aiming to "win," sometimes under the pressure to generate fees, is counter-productive for lawyer and client. The lawyers who serve their clients best are problem solvers. It's essential that the client knows what the lawyer is doing, and that the client approves of the tactics to be taken to achieve the client's strategy/goal. Effective ADR requires finding out not only what the parties need, but also what they want. A "satisfactory" result may leave clients on both sides feeling that their full objectives have not been met. A collaborative resolution of the dispute, based on a foundation of trust created in an interactive negotiation process, has the best chance to satisfy the objectives of both sides. Through discussion with clients, counsel should establish how much money they want to spend to resolve a problem. A higher initial cost may be acceptable if the long-term return on investment justifies it. Sometimes a legal problem is large to justify spending big sums. Most issues, however, involve everyday costs of doing business. It makes no sense to budget spending $2 million to try a case if a $100,000 settlement meets the client's objectives.
When budgeting for ADR in a risk-sharing arrangement, there should be different budget milestones tied to success. The budget can be for the entire case, or just to that point in the proceeding where a negotiated settlement has a good chance for success. The engagement goal is tied to that probability, as a success bonus if the process has stayed within budget to get to that milestone. Different parameters define different success outcomes. Client and lawyer work as a team to achieve them and both parties benefit: the client gets out of the lawsuit and the firm gets a success bonus. It is a win-win situation for everyone.
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