This conversation started with my post about planned early dispute resolution (PEDR). My friend, Peter Benner, and I exchanged comments in that post. Because we decided to continue this conversation for a while, I am posting our ideas in new posts, starting with the last one (Part 2-ish). Here is Peter’s response to my last post. Watch this space for my response.
Your post has many important points, not the least of which is highlighting the persistent dilemma of how to get businesses and law firms to give thoughtful consideration to institutionalizing PEDR and ADR more generally, as well as expressing the critical concern that PEDR not just be done, but be done well.
Addressing your questions in reverse order, your analysis of application of the SUCCESs model places the challenge in sharp relief. I must admit, whenever I read something describing the barriers as you have through that analysis, I wonder whether efforts are well spent in trying to advance PEDR, or similar, processes. It is not as though any of this is a secret or new. For corporate leaders, legal or otherwise, who are interested in developing ways to make disputes less of a burden on resources, the “how to” early resolution models are there for the googling (to wit, the PEDR User Guide). Yet, in what I believe are most cases, the CEO/CFO types don’t even inquire. The “default to litigation” is deeply rooted in their own corporate upbringing and, as we have said, most often serves the interests of those who are in a position of influence.
The answers (to the extent there are any!) are different between business executives and law firm partners. As well-intentioned and client-centered as outside counsel may be, particularly those in litigation, they are operating within an environment in which threatening market forces remain about as present as they have ever been, as the “big law” model experiences increasing stresses, financial and otherwise. One way, at least in the short term, of sustaining that model is through earning revenues that fulfill longstanding expectations regarding partner compensation. Change within that environment has to be client driven, via normative isomorphism, responding to the norms imposed by clients.
For companies, it’s a different matter, and that is what is so confounding, about which we remonstrate.
In talking with corporate executives, there remains a pervasive knowledge vacuum about options and creative and effective ways to shift litigation from burden and risk to opportunity. I am surprised by how uninformed executives or in-house counsel are about the real value and potential of those options to bring about better results at lower cost. As you say with respect to isomorphism, delving deeply into the options and becoming more conversant with them is too far outside the norm, and they can’t tolerate the personal risk involved in promoting creative processes, as opposed to turning the problem over to “our litigator.”
Something I hear a fair amount is that CEOs and CFOs, who have responsibility for overall corporate performance, delegate oversight and of and accountability for third party disputes to the legal department, while the “C-Suite” focuses more on what they consider to be more fundamental corporate direction and strategy. Lawsuits are nuisances (unless really big), that interfere with business rather than complement it, so “it’s yours to handle, and come back only if there is something I need to know.” Then there is little or no incentive for the handler to do anything differently from what s/he has always done.
Lastly, to your first question—what do business execs really want when it comes to dispute resolution? The glib answer is that they just want it to go away; no muss, no fuss. It’s easy to presume what they should want: lower cost, quicker time to conclusion and the best business result achievable. And that may be the answer from some. Although there is no way to generalize, since how execs personally and emotionally relate to a dispute, as well as their willingness to “think different”, varies all over the lot.
Your question is critical, however, since what the influencers and decision-makers want will drive what they will entertain. Let’s imagine for a moment that they may well want what we in the field believe they should want. The problem may be that, even so, and getting back to where I started this post, they are not being exposed (or actively exposing themselves) to options or ideas that, explained in the right way, can pique their interest and obtain their buy-in. That may be a cop out in addressing your question, but in some sense it has to be true because the prospective benefits to the company they shepherd, particularly compared to their probable experience with litigation, are so compelling.
Back to you: Assume (and you of course may disagree with the premise) that a business executive (CEO, CFO, etc.) will respond positively when presented convincingly with the following: through some form of PEDR, there is a means of potential no-risk escape from the litigation trap, and even beyond that, the possibility of turning the burden of a dispute into an opportunity. Who most effectively can present that, and how, such that the value of PEDR, well implemented, rises in the level of strategic rank that the CEO/CFO takes seriously?