In June, John Kiernan gave a talk in which he argued that the ADR field has reached a first level of maturity but “ADR remains far short of its full, what might be called ‘level two maturity.’”  He gave the talk at a luncheon of Association for Conflict Resolution of Greater New York, where he received its ADR Achievement Award.

Mr. Kiernan is the chairman of the International Institute for Conflict Prevention and Resolution (CPR), president of the New York City Bar Association, and co-chair of the Litigation Department at Debevoise & Plimpton.

He said that “here has definitely been progress [in how ADR works in practice and how it is perceived in the marketplace of ideas], to the point where partisans of ADR rightfully believe there is a widely recognized first level (as it might be called) of increased openness to ADR that did not exist in the same measure a few decades ago.  And that ADR methods truly have established themselves as able to foster resolution of disputes faster, more efficiently and less expensively than litigation would do . . ..”

He continued, stating that we have not reached the second level of maturity.  “Universal buy-in remains held back by shortcomings in individual participants’ particular experiences with ADR efforts;  by disputants’ understandable preference for winning over compromise so long as winning seems potentially achievable without intolerable expense;  by institutional or personal priorities that cause litigants to feel a need for a judicial resolution, and by a wide array of cultural sensibilities among disputing parties that can be deeply felt and are hard to shake.”

. . .

“To the extent that ADR partisans want to claim a universally accepted new paradigm about how disputes should be resolved, though, that might be a little more self-congratulatory than the objective evidence suggests.  In lots of contexts, at least absent court mandate, mediation remains exceptional rather than normal.”

He argued that “further advancement of ADR will require a continuation of the evolution of cultural sensibilities–and, ultimately, the wills of disputing parties and the perspectives of their most trusted advisers–that have already advanced mediation and other forms of ADR from a position of near-institutional invisibility a few decades ago.”

He suggested that a part of the problem is that most lawyers don’t routinely do a “deep dive” into early case assessments of new matters.

Moving From Level One to Level Two

I think that Mr. Kiernan’s analysis is exactly right.  He suggests that court mandates have prompted progress in use of mediation.  This is a systematic approach that has required lawyers and parties to experience mediation, prompting many to be more open to it than before they regularly used mediation.  And it makes it harder for parties to opt out simply on a whim or strategic calculation.

In many cases, however, the courts do not order mediation or, when they do order it, the mediation takes place late in litigation, thus losing the benefits of early efforts to resolve the problems.

In 1996, Catherine Cronin-Harris, then a CPR vice-president, published Mainstreaming: Systematizing Corporate Use of ADR, 59 Albany Law Review 847, in which she chronicled the use of ADR by numerous corporations and argued that businesses were at the “threshold” of a third phase of business disputing.  The three stages were “(1) the ad hoc stage, characterized by idiosyncratic ADR use;  (2) the strategy deployment stage, characterized by establishment of tools to encourage ADR;  and (3) the systems design stage, characterized by retooling of existing ADR strategies to integrate ADR use into the business and maximize its benefits.”

She said that the systems design phase emphasizes “(1) greater synthesis between the attorneys and business managers;  (2) greater involvement of corporate dispute participants in prevention, as well as resolution, of disputes;  (3) more effective ADR incentives with outside counsel and claimants;  (4) fine tuning and earlier use of interest-based ADR procedures;  and (5) industry-wide collaboration in ADR encouragement.”

I believe that the lack of a widespread dispute system design (DSD) approach along the lines that Ms. Cronin-Harris describes is a key missing element that keeps our field from moving to the second level of maturity that Mr. Kiernan describes.

Developing and disseminating resources like CPR’s excellent early case assessment toolkit are helpful but not sufficient to make a significant shift to level two.  I think that more systematic approaches would be needed.

Lainey Feingold’s structured negotiation process is an example of a systematic approach to early dispute resolution in which she resolves disputes with major corporations before filing suit.  It illustrates a planned effort at early dispute resolution, in contrast to ad hoc, unplanned efforts in which lawyers and litigants decided whether to try to resolve disputes early on a case-by-case basis without a strategic approach to handling disputes generally.

Peter Benner and I conducted a study entitled, Why and How Businesses Use Planned Early Dispute Resolution (PEDR), which identified numerous barriers to the use of early dispute resolution which were consistent with Mr. Kiernan’s analysis.  Our study was based on interviews with lawyers who develop and implemented PEDR systems.   (For a brief summary of our findings, click here .)

We wrote, “This study illustrates that key stakeholders have their own interests, which often are satisfied by continuing with the status quo of LAU [litigation as usual] rather than switching to a PEDR system.  The C-Suite often does not want to ‘get into the weeds’ of managing litigation.  Inside counsel and middle-level employees may feel that they currently handle disputes effectively, and they may resent efforts to reduce their autonomy.  Outside counsel may worry about interference with their professional responsibility to produce the best legal results and their ability to generate substantial revenue that generally flows from LAU.  Although general counsel have the formal authority to direct inside and outside counsel to use PEDR processes, the general counsel may not do so for various reasons such as their temperament, background, training, or reading of internal business priorities.  Even if they implement a PEDR system, the system is unlikely to be as effective as possible if key stakeholders resist.

“More generally, what may seem irrational to outside observers may seem quite rational to individual stakeholders.  Although the status quo may not seem optimal to some stakeholders, doing something different may seem risky, possibly subjecting them to criticism if things do not work out well.  Business people normally do not get involved in dispute resolution and they may not be interested in PEDR processes unless it ‘hits them personally.’  One lawyer said that the biggest barrier to adopting a PEDR system was simply agreeing to change.  ‘People get set in their ways.  Teaching an old dog new tricks is very tough.  Change is upsetting the apple cart and people don’t want to hear it.’   So, although adopting a PEDR system may seem like a no-brainer at first blush, proponents of this approach often face significant barriers that make it difficult to adopt and sustain this innovation.”

It should not be surprising that unplanned efforts at reasonable early dispute resolution don’t happen more often considering all the stakeholders who may be satisfied with LAU and the fact that it may take only one key stakeholder to veto an early dispute resolution process in a case.

Taking advantage of insights from behavioral economics, a systemic approach would recognize that people are more likely to engage in early dispute resolution if it is the default rather than something that requires an affirmative decision – especially agreement by a number of people with differing interests.

Based on our study, Peter Benner and I argued that to substantially increase the use of PEDR systems, businesses should use DSD methods, designate PEDR counsel to manage the process, and make PEDR a valued part of the corporate culture.

Using DSD is particularly important because there is no one-size-fits-all approach to developing a PEDR system for each business, just like there is no one-size-fits-all approach to resolving individual cases or developing court ADR systems.

Instead, each business seeking to move to Kiernan’s level two needs to identify its own strategic interests, dispute resolution goals, and potential barriers to successful implementation.

Businesses may need help to design a PEDR system tailored to their own circumstances.  Organizations like CPR and the ABA could provide technical assistance.  The ABA Section of Dispute Resolution established a PEDR Task Force, which produced a concise User Guide to help businesses develop their own PEDR systems and now has a successor task force.  CPR recently established an Advancing Dispute Prevention Task Force.

Individual dispute resolution professionals can also assist businesses in designing PEDR systems.  In our study, Peter Benner and I interviewed a lawyer in a big firm who has done this for many years.  Many lawyers serving as advocates may feel that such work is inconsistent with their firms’ interests, though the lawyer we interviewed said that it deepened his firm’s relationships with their clients and actually increased his firm’s business.

DR professionals working primarily as neutrals may be in an especially good position to advise businesses about developing PEDR systems as they normally would have fewer qualms about losing business.

 

Thanks to Peter Silverman (by way of Peter Benner) for the link to John Kiernan’s speech.