Most commercial cases are settled and no longer tried. This presents opportunities for lawyers to find ways to settle cases earlier, which provides noticeable value to clients. Clients want to avoid unnecessary expense, delays, disruptions of commercial activity, and the uncertainties that can haunt business planning and growth. They value lawyers that know how to get this done.
Knowledgeable clients understand that most of their commercial disputes will settle rather than be adjudicated. They also know that the amount they’ll spend to resolve the dispute depends on their lawyer’s strategy. In hiring lawyers, clients seek “value.” And determining value is much more complex than comparing hourly rates. In reviewing lawyers’ performance, clients analyze how the eventual settlement played out and how it compared to alternatives. They analyze how much time it took to settle and how many internal and external resources they used. And they analyze the process: whether they could have predicted the amount they spent and how they felt about the negotiations.
The Future of the Lawyer’s Role in Dispute Resolution
Clients have two choices at the start of a dispute: (1) they can participate in an adversarial process, e.g. court or arbitration, which involve discovery and motions; or (2) they can negotiate as soon as possible, even if a legal proceeding has started. Early negotiations can be difficult because the parties have different opinions about the law and the facts and judge, jury or arbitrator outcomes. The outcome factor is usually determined by internal investigations and with prediction input from lawyers. Recent studies have shown that lawyers involved in a litigation are often wrong in their predictions. It’s difficult to predict the strengths of your own case when you can’t fully and objectively analyze the strengths of your opponent’s case.
When participating in an adversarial process, clients seldom have a full understanding of the basis for their adversary’s position until discovery and motion practice is complete. Lawyers often pursue a “leave no stone unturned” approach to the process. In this situation, clients can only control costs by negotiating rates or capping legal fees. That could interfere with the quality of service the client receives.
Further, courts may be unable to schedule a trial date for several years, which makes discovery and motions drag on and on. The time span in an arbitration can be more predictable if the lawyers cooperate to limit the time involved in discovery and hearing. However, time-consuming expensive discovery is common also in arbitration.
Most clients would prefer to negotiate a settlement to get rid of a dispute as soon as possible. In addition, settlement gives them more control of the outcome than the adversarial system does. It also allows preservation of desirable business relationships It also reduces external and internal expenses.
The question is how to reach a settlement when the other parties show no interest in backing off from a position that has already been rejected by their opponents. Practically speaking, only a judge can force parties to negotiate and that is rarely done until the eve of trial. And most arbitrators will not bring up the subject of settlement. Without lawyer cooperation, settlement negotiations can be delayed until after discovery is complete. Settling after expenditures for full discovery doesn’t benefit clients as much as an earlier settlement.
But a mediator can help the parties resume negotiations and do much more than transmitting offers and demands back and forth. Rather, the mediator can facilitate the settlement process. The mediator has the unique power to have confidential discussions which can disclose important factors affecting the settlement process. Because of this knowledge, the mediator is usually the best person to determine that the parties are ready and negotiate and suggest the best negotiation process. This include recommending who should participate, in order to overcome any impasses.
Guided Choice and the Value of Earliest Possible Dispute Resolution
Many mediators do not utilize pre-negotiation process facilitation. Using a mediator familiar with Guided Choice tools gives attorneys an opportunity to deliver value to clients based on getting the case settled as early as possible. Even if some discovery is required, the mediator can help the party get the information necessary to settle much more efficiently. The discovery information needed for settlement is less and can be obtained more quickly than information needed to prepare for trial or arbitration.
To accomplish earlier settlements will require attorneys highly skilled in negotiation and advocacy. Convincing opponents to negotiate can be more difficult than convincing judges, juries, or arbitrators.
Early settlements also benefit lawyers. Lawyers face less pressure to reduce their rates when they can demonstrate to their clients that they can resolve disputes early. And if a lawyer is under a fixed fee arrangement, early dispute resolution avoids exceeding the estimate on which the fee was based. Finally, in this age where branding is so important, a reputation for knowing how to get the earliest possible settlements is a great way to develop business
As John Lande has said:
“In an all-too-common pattern in litigation-as-usual, settlement comes only after the lawyers engage in adversarial posturing, the litigation process escalates the original conflict, the parties’ relationship deteriorates, the process takes a long time and a lot of money and none of the parties is particularly happy with the settlement. Almost any disagreement can lead to an escalation of the conflict that diverts energy away from the critical tasks needed to resolve disputes efficiently. Although some lawyers enjoy this process and make a good living from it, many would prefer to use a more constructive and efficient process. They know that most cases will eventually settle—often only after a process that takes too long and costs too much—but they often feel powerless to steer clients toward a more productive path. They are often trapped in a “prison of fear” which locks them into unnecessarily long and expensive litigation. They fear that the other side would interpret the mere suggestion of negotiation as a sign of weakness and an invitation to take advantage of their clients. Logically, this is absurd because even lawyers with strong cases should have an interest in an early settlement under favorable terms. But this fear grips much of the legal profession, nonetheless.”
John Lande, University of Missouri School of Law, JAMS Global Construction Solutions, p. 6, Spring 2011. University of Missouri School of Law Legal Studies Research Paper No. 2011-13
For more on this subject listen and watch the 2016 AAA Online On Demand Program:
Using Guided Choice to Increase Satisfaction with Value of Mediators.