The Future of Workplace ADR The Future of Dispute Resolution
Sunday, September 1, 1996
As Chair of the NJSBA Dispute Resolution Section, this past year it has been my privilege to attend a number of national, regional, and statewide meetings devoted to judicial administration, arbitration law reform, and the growing popularity of Alternative Dispute Resolution (“A.D.R.”) in the public and private sectors. What emerged from my travels is a vision of a vastly changing dispute resolution landscape, in the following particulars:
- The roles of lawyers, judges, case administrators, and consumers are undergoing fundamental and long term redefinition.
- The public court system, traditionally viewed in this country as one of three co-equal pillars of government, has had its supremacy challenged with increasing success by the private sector.
- American legal education, which has resisted significant change for over 100 years, will have to reinvent itself from top to bottom or risk being rendered irrelevant to the way transactions actually are shaped and problems really get resolved.
- I often describe the scope and pace of these changes as “quietly revolutionary”. This essay predicts the nature, timing, and extent of that revolution.
The Changing Roles of Lawyers
Of the modern dispute resolution field, lawyers will continue to be the segment affected most by the A.D.R. revolution. We are instructed by New Jersey Supreme Court Rule 1:40-1 “to become familiar with” and “inform our clients about” available A.D.R. programs. Today, it is impossible to practice in the federal and state court here in New Jersey without coming into daily contact with court-annexed, court-supervised, or court-referred A.D.R. programs.
Our frequent exposure to A.D.R. has changed our approach to client preparation, pre-trial discovery, motions practice, and client advocacy. We now spend more time attempting to narrow the legal and discovery issues, engage our adversary counsel in more productive dialogue, and use the results of A.D.R. processes to conduct interest-based negotiations. Indeed, cost-conscious clients are directing us to solve their problems faster, better, and with less intense discovery efforts than were the norm just a few years ago.
Even when court-annexed A.D.R. does not resolve a case fully, good lawyers know that good judges appreciate our cooperative efforts in case management, including timely submissions of Consent Orders setting forth discovery deadlines and other data necessary to streamline the case.
Moreover, A.D.R.-savvy lawyers frequently suggest private sector direct negotiations, mediation, or arbitration at the start of a commercial, personal injury, or matrimonial dispute, instead of waiting for the courts to recommend or impose those methods after litigation has commenced. Such suggestions no longer carry a stigma of weakness with the receiving side, and more often endear the A.D.R.-recommending lawyer to his or her client as reflecting a reasonable, problem-solving mindset.
On the transactions side, business clients more frequently seek customized A.D.R. clauses in commercial contracts, as do less sophisticated parties even in relatively standardized matters. Increasing numbers of clients seek our advice in matters where they, not their lawyers, are doing the primary or even the exclusive negotiating.
Whether practicing primarily as transactions lawyers or dispute resolvers, we lawyers increasingly are required to demonstrate our negotiating skills. When I attended Harvard Law School’s summer school program a few years back, it was not coincidental that over half the attendees for the entire summer school curriculum had signed up for negotiation-related coursework. We simply did not get those skills in law school, but find we need them as never before to educate our clients properly, to negotiate for them, or just to survive as business people.
From a practice development perspective, as long as we obey traditional conflicts of interest restrictions, we lawyers increasingly hold ourselves out as competent private sector arbitrators and, with specialized training, mediators. Joint Opinion 676/18 of the Supreme Court Advisory Committee on Professional Ethics and Committee on Attorney Advertising states that a lawyer’s services as an A.D.R. neutral may be conducted as “part and parcel” of the lawyer’s usual practice, and similarly may be performed by non-lawyers who observe prohibitions on unauthorized legal practice.
In today’s increasingly competitive legal marketplace, A.D.R.-friendly lawyers have a distinct business advantage. We solve problems better, faster, and less expensively than our died-in-the-wool adversarial counterparts, and our educated clients know it.
The Winds of Judicial Change
While the A.D.R. revolution affects practicing lawyers most directly, the judiciary has experienced major changes as well. In days past, good judging was synonymous with bench time. Today, good judging means effective case management. Encouraging lawyers and litigants to settle their cases spends scarce judicial resources much more efficiently. Good judges know that.
Judicial referrals to court-supervised, court-annexed, or court-referred A.D.R. programs have played an important role in judicial administration for a number of years. In this era of tight public funding for courts, such referrals will take on an increasingly urgent role as courts are asked to do more with less.
Judges are being offered training in effective and ethical judicial negotiating techniques. They are seeking special skills as problem-solving intervenors. They are experimenting with differentiated case management techniques combined with A.D.R. modalities. Judges with administrative responsibilities are becoming increasingly sophisticated in the screening and appropriate referral of cases to arbitrators, mediators, special masters, and hearing officers.
Moreover, as the public has become more enamored of private A.D.R., retiring federal and state judges with excellent reputations on the bench have begun serving as private sector neutrals in increasing numbers. This service does not conflict with state prohibitions on court appearances by retired members of the judiciary. Since private A.D.R. is contractual, not court-based, this arrangement represents a “win-win” outcome for retired judges who do not want to jeopardize their pensions, and also for those litigants who want the comfort of a well-known former jurist on their case and can afford to pay the freight.
The Case for Enlightened Judicial Administration
On the court side, modern judicial administration techniques will be a hot topic for many years to come. Recent studies suggest that differentiated case management (“D.C.M.”) is highly effective when combined with appropriate and timely referrals to A.D.R. modalities. This only reflects common sense, as appropriate A.D.R. use requires differentiation by case and conflict type, assumes a high degree of hands-on management, and proposes efficient and managed discovery. A.D.R. and D.C.M. may be viewed as two sides of the same coin.
Good judicial administration asks: where are resources most needed, and who is in the best position to deliver services in a system of scarcity? Just as judges should try cases only as a last resort, they also should not be bogged down in administrative matters except in the most insoluble cases. Junior staff should handle all routine A.D.R. screening and referrals at the earliest possible time. Senior staff should handle more complex matters in consultation with trial court administrators. The most complex cases, such as mass torts, non-routine products liability matters, and the like, should receive immediate special assignment to a team that includes a judge and specially trained administrative staff.
If the public court system has a chance of surviving the rapidly changing world of dispute resolution, then enlightened judicial administrators must play a key role.
Public System Mythos, Private System Pathos
Since the days of the so-called Reagan revolution, we have witnessed increasing privatization of formerly public works, and the court system is no exception. In the last five years, private sector dispute resolution has taken off in ways previously considered unimaginable. This process has been aided by a number of developments:
- Federal and state court decisions have expanded the reach of the Federal Arbitration Act to the full extent of the commerce powers, thereby preempting inconsistent or obstructionist state law policies. Voluntariness of process and gross inequality of bargaining power continue to be debated vigorously, especially in the areas of consumer protection and employment A.D.R. in the non-union setting.
- Neutral A.D.R. administering groups, such as the American Arbitration Association, have emphasized improvements in the quality of due process, the caliber of neutrals, and the quality of outcomes, thereby enhancing the reputation of private A.D.R. initiatives.
- Federal and state legislators, the executive branches of both, and the federal and state courts have embraced various forms of A.D.R., mandating its use early and often. With wider acceptance by the legal culture generally, use of private A.D.R. has become very respectable. To compete with the private sector, the public courts now are examining new and creative uses of A.D.R. I analogize this phenomenon to the “Federal Expressing” of the U.S. Postal Service. It took the private sector to show a previously monopolistic public agency what the public really wanted and was willing to pay in exchange for high quality, reliable delivery service.
- Certain institutional users have become disgusted with the costs and delays endemic to the public court system. Legislative and judicial priority systems do not emphasize commercial dispute resolution, for example. In an era of shrinking budgets, the commercial and personal injury docket unquestionably will suffer. A recent poll of New Jersey’s civil trial lawyers showed a greater willingness than in other sectors of the bar to accept filing fee increases. Remember the bad old days when you just could not get trials in certain counties? Private A.D.R. will get a boost from these realities, and eventually may supplant the public court system’s dominance in the civil litigation field.
- As New Brunswick attorney Arthur Miller pointed out to me recently, the advent of electronic case filing will drive up private A.D.R.’s stock like nothing else. What commercial entity, or divorce litigant for that matter, will want inside information instantly available by keystrokes from friends, enemies, relatives, competitors, co-workers, the I.R.S., or even total strangers?
- Barriers between public and private dispute resolution are coming down as never before. The courts are referring more and more matters to private A.D.R. providers under the Rules of Court and the Civil Mediation Program. Private litigants are embracing court-annexed A.D.R. as “business as usual”. The professional A.D.R. community has begun to identify itself nationally, regionally, and across the state. The American Arbitration Association sponsored a national A.D.R. Super conference in Washington, D.C., this past April that attracted 500 attendees. Here in New Jersey, the Dispute Resolution Section co-sponsored four I.C.L.E. programs this year, highlighting family law A.D.R., employment A.D.R., tort law A.D.R., and New Jersey’s first-ever A.D.R. Day. ADR Day attracted over 100 participants from around New Jersey. We already are working on plans for a New Jersey-based ADR Super conference next May, with the following proposed co-sponsoring groups: American Arbitration Association – New Jersey Regional Office, the New Jersey Society of C.P.A.’s, the New Jersey Association of Professional Mediators, the New Jersey Corporate Counsel Association, and the New Jersey Institute for Continuing Legal Education.
- As has occurred nationally, the New Jersey State Bar Association has begun actively promoting A.D.R. in its own ranks. We have panels of experienced arbitrators and mediators capable of assignment in lawyer-to-lawyer disputes arising in partnership dissolutions, termination of employment, fee sharing matters, and the like. The Trustees recently gave provisional approval to our Section’s Lawyer-Client Mediation Program, which is unique nationally. The Program will accept referrals from lawyers or clients with disputes of any kind, including, where appropriate, low-grade ethics complaints.
Risks and Benefits to the Consuming Public
As A.D.R.’s use picks up speed here in New Jersey, it will present a number of identifiable risks and benefits to lawyers and the consuming public. Trials, already in short supply, will be reserved only for those cases that do not respond to alternative modalities. Depending on your viewpoint, that is either a good or a bad thing. Case management, including litigants’ mandatory exposure to A.D.R. processes, will take on increasing sophistication and importance. On the other hand, unequal bargaining power between or among parties will yield A.D.R. adhesion contracts that could frustrate the public and give the A.D.R. movement an unwelcome and undeserved black eye.
The New Jersey Supreme Court, generally a key supporter of A.D.R. enforcement, will have to resolve the tension between protecting consumers from unwanted mandatory arbitration clauses and the strong federal and state public policies mandating their enforcement. Our Supreme Court also will have to determine the limits of judicial intervention in privately rendered arbitration awards that touch on major public policy issues such as employment discrimination, environmental contamination, or basic consumer protection.
Increasing use of private A.D.R. will yield less public scrutiny, less availability to precedent-based decision-making, and fewer “thunderbolt” awards. On the other hand, in terms of purely distributive justice, A.D.R. makes legal representation more affordable, and therefore the public should have an easier time getting counsel in cases of questionable liability or marginal damages.
Finally, whereas the prospect of cheaper, faster, and more private A.D.R. processes undoubtedly will inure to the public’s benefit, and probably will heighten the public’s perception of the legal profession and lawyers in general, this news will not thrill lawyers already feeling the pinch of competition. Worse yet from that vantage point, there are competitive pressures from non-lawyer A.D.R. providers in this virtually unregulated marketplace.
The public has a more immediate concern in that a complete absence of regulation means the public is not protected adequately from untrained or unscrupulous A.D.R. providers. This could (and probably will) change as the New Jersey Supreme Court develops skill-based criteria for court referred matters, which undoubtedly would influence citizens’ selection of neutrals in the private sector as well.
Legal Education: Adapt or Perish
Although law school curricula have changed periodically to reflect cultural, ethical, and systemic pressures, in my view a more fundamental and desirable shift has yet to take place. My personal bellwether for the preeminence of the A.D.R. movement is when the Harvard Law School is renamed “The Harvard School of Dispute Resolution”. Don’t laugh; it will happen some day. For if it does not, those schools that retain a built-in bias for adversarial dispute resolution will suffer the fate of the earth’s dinosaurs.
If less than 3% of disputed matters are resolved by trials, why shouldn’t the educational system promote the 97% solution? As the A.D.R. movement deepens its hold on the public’s imagination, corporate and student demands for appropriate and relevant training will lead to teacher and funding re-allocations as well. Many academics and institutions are beginning to notice the A.D.R. groundswell, and for good reason.
When I attended law school in the mid-1970’s, clinical legal education was just coming into acceptance around the country. More recently, law schools have identified client counseling, lawyer negotiation skills, and basic transactions skills and methods as desirable adjuncts to the core curriculum. In my view, multi-disciplinary education is the next testing ground for real-world relevance. I predict we will see a rapid and widespread emergence of multi-disciplinary education around a core curriculum of dispute resolution skills. This is the model in use at Rutgers-Newark’s Certificate Program in Conflict Management, a cooperative venture of the Schools of Business, Law, and Psychology.
Such an approach reflects a common-sense understanding that no one discipline has a monopoly. Practitioners of dispute resolution arts must be conversant with principles of law, business, accounting, and mental health, although there may be a primary practice area affiliation. Emphasis will be placed on case screening and cross-referrals as required, to be certain the consumer is receiving proper systemic care. Interest-based negotiating and problem solving also will be emphasized, rather than the “win-lose” preoccupations of a bygone era.
Moreover, the current emphasis on transactional dispute avoidance, partnering, and dispute resolution in the commercial world will lead to further curricular changes. Students and young professionals alike will need to distinguish between negotiation of pre-dispute clauses and those that are created once a dispute has arisen. Such efforts will differ yet again from substantive solutions negotiated with or without a pre-dispute A.D.R. clause.
In this essay, I have presented a brave new world of professional dispute resolution, affecting primarily the practice of lawyering, but extending also to the judiciary, judicial administrators, educators, and the consuming public.
In the 1980’s, the legal profession moved toward a model of what came to be called “holistic lawyering”, in which lawyers identified their clients’ real-life context, no matter what the presenting legal issues may have been; asked the clients to take responsibility for solving those problems; and created a team approach to fostering resolution, including legal problem-solving. In my view, the emergence of professionals dedicated to dispute resolution is the next logical and worthy step in “holistic lawyering”.
As we have seen, a professional in dispute resolution is someone who can serve her client as an advocate in negotiations, mediation, arbitration, or litigation. She also may serve, barring conflicts of interest under the relevant Rules of Professional Conduct, as a neutral mediator, facilitator, or arbitrator when called upon by parties to a dispute. Finally, she will make appropriate client referrals in practice areas in which she is not conversant, comfortable, and/or licensed where licensure may be required.
For traditional lawyers, the development of a cadre of professional dispute resolvers presents risks, challenges, and opportunities. First, a profession already feeling beleaguered by competitive pressures may look dimly on the emergence of a movement requiring mastery of new skills, sharing of turf, and reduced fees if you are successful in your problem-solving style. Second, to the extent A.D.R. providers are not regulated, the consuming public is at risk of overreaching by unskilled or unscrupulous providers, unless and until certification, ethics, and enforcement rules are in place.
Another challenge is represented by the analogy between professional dispute resolution services and managed health care in this country. Are we going to take a cost containment approach, a consumer-oriented approach, or some combination of the two? How will the system balance the need to inform the public about faster, cheaper, more private approaches while still respecting the public’s right to refuse arbitration when the offer is made on a “take it or leave it” basis? Will it matter whether the negotiation is for a car? An apartment? A job? A surgical release?
On the other hand, may people properly be mandated to mediation without doing violence to self-determination, which is an identified core value of the A.D.R. movement? Does it make a difference that they retain the absolute right to return to court if the matter does not resolve?
A final factor influencing A.D.R.’s rapid rise in the near future likely will be represented by the advent of electronic filing capability. In all but the most pedestrian of cases, will parties abandon the “first strike” option of a lawsuit in favor of A.D.R.’s promise of absolute privacy?
In my view, A.D.R. represents the most profound set of changes to affect our professional lives in the past 50 years. The issues and questions raised in this article are more than simple abstractions or academically interesting debate points. Rather, they are at the heart of a movement that promises to reshape the practice of lawyering well into the twenty-first century. For our clients, the profession we love, and ourselves, you and I have an opportunity and a responsibility to choose wisely. Let us walk the new path together.