General Practice, Solo & Small Firm DivisionBest of ABA Sections
ADR and the Law Firm of the Future
Michael Spafford, Lawrence Freedman, and Connie Reeve
Twenty years ago Harvard law professor Frank E.A. Sander spoke to the Pound Conference of his vision of a multidoor courthouse. His vision has yet to be realized, but the increased use of alternative dispute resolution evidences an unmistakable trend in that direction. We believe that ADR activity will continue to increase, requiring the law firm of the future—and in particular its litigation group—to be proficient in the use of ADR mechanisms to stay competitive and be responsive to its clients’ needs.
Why ADR? Competitive pressures demand proficiency with ADR. More and more clients are using ADR to reduce their legal costs. In a recent ABA survey of 159 Fortune 500 companies, 81% of the survey respondents actively used ADR techniques. Another poll of 400 senior executives conducted by Business Week reported 97% responding favorably to the use of ADR. Growing membership in private ADR associations is further evidence of its popularity. For example, 850 corporations, 2,800 corporate subsidiaries, and 1,500 law firms have signed the Center for Public Resources’ Policy Statement on Alternatives to Litigation. In Canada the new Canadian Foundation for Dispute Resolution reports that its membership is increasing. And companies as diverse as Motorola, Marriott, NCR, Toyota, and Ernst & Young have adopted ADR programs.
Moreover, a majority of the courts in the United States and a growing number in Canada have adopted or are exploring court-annexed ADR on a mandatory or voluntary basis. For example, a recent survey by the CPR Institute for Dispute Resolution indicated that seventy-eight of the ninety-four United States federal district courts had some form of court-annexed ADR. Other studies show widespread use of ADR in state and local courts, where judges are increasingly using court-supervised ADR to clear congested calendars.
In response to these client- and court-imposed demands, more and more law firms are offering ADR-related services. And, interestingly enough, more nonlawyer businesses, such as accounting firms and ADR associations, are competing with attorneys in offering ADR-related consulting services. Firms that don’t recognize and react to this trend will find themselves at a competitive disadvantage.
The reason for ADR’s popularity is simple. When used properly and in the right circumstances, ADR drastically reduces the amount of time and cost needed to resolve a dispute by focusing the parties on the key issues in dispute and limiting or eliminating discovery and unnecessary motion practice. It also provides the client with a measure of control and predictability by getting the client more involved in the process. It thus responds to a key client demand—provide Cadillac service without the sticker price. And, it frequently yields unexpected dividends—increased client participation fosters greater communication and can strengthen the attorney’s relationship with the client.
How Will the Law Firm of the Future Integrate ADR? Some firms have and will develop separate practice groups or committees that focus on ADR initiatives. Others will designate ADR specialists, develop an ADR library, develop ADR expertise in specialized areas that are compatible with the firm’s practice specialties, and/or train their associates and partners in ADR techniques. Still others may rename their litigation practice group as the "dispute resolution" group, offer their services as mediator or arbitrator, or focus on proactive ADR clauses in contracts or other mechanisms designed to avoid disputes. How they do it will vary with the law firm culture, but the result will be the same: providing more efficient, problem-solving oriented service.
Perhaps the greatest future effect may be on the modern litigator. Increasingly, clients are demanding an early assessment of the risks and costs of potential litigation and early development of a case management strategy. Early Case Assessments, or ECAs, are being used to identify key legal and factual issues, to narrow issues for litigation, to decide on whether and when to attempt settlement, to define client objectives (both monetary and business), and to agree on litigation budgets. Another purpose of an ECA is to determine whether, and what type of, ADR promotes the client’s interests. Thus, the ECA focuses on how to solve the problem, not necessarily on how to win the litigation.
In performing an ECA, most clients will not consult separate specialists in litigation, trial, and ADR for advice; they instead will consult with one litigator or law firm proficient in all phases of dispute resolution. The litigator or law firm ill-equipped to provide advice in all areas will not get the business. The modern litigator must be able to draw on not only her litigation and trial expertise, but also her negotiation, mediation, arbitration, and other ADR skills to offer the client advice on how to develop the most cost-effective and efficient strategy for resolving the dispute.
Are Litigators Best Suited for ADR? Many of the skills of an effective litigator are readily applied to ADR: the realistic assessment of legal or other risks and their potential costs; the ability to distill complex issues and present them in a succinct and persuasive manner; the ability to organize and marshall resources to your clients’ advantage; the ability to develop an overall strategy for resolving a dispute; and the ability to advocate and execute that strategy. Most importantly, the threat of litigation in many cases is the ultimate hammer driving parties to the table to discuss alternative mechanisms for resolving their disputes, and ultimately to resolve them.
But ADR is not litigation. The litigator must recognize the subtle differences and adjust accordingly. First, ADR is not appropriate in all circumstances. For example, we have found ADR to be particularly useful in resolving disputes with customers, clients, employees or other business partners with whom the client has an ongoing relationship; where both parties share some blame for the event giving rise to the dispute; where confidentiality is required, e.g., a dispute involving trade secrets or copyrights; where a neutral expert is needed to resolve a technical issue; or where it is an international dispute. Whether one ADR mechanism is more preferable than another frequently depends on the parties involved and the individual circumstances. In contrast, litigation may be preferable where your client or the opposition views the dispute as a matter of principle, where the parties have no continuing relationship, or where there are no other external factors pushing the parties toward a compromise.
Second, the litigator must adjust her behavior to fit the circumstances. A confrontational, no-holds-barred litigation approach is not usually effective in ADR. Rather, it is important to foster an atmosphere that allows the adversaries to develop a working relationship, a relationship dedicated to solving a problem rather than victory. For example, it may be appropriate to provide an honest assessment of the weaknesses in not only the opposition’s case but also yours, and thereby promote a realistic discussion of the risks involved. Even if litigation commences, it is usually wise to keep the lines of communication open because subsequent events may make ADR a more palatable alternative than initially contemplated.
Third, ADR demands a better understanding of the client’s objectives, both business and monetary. Only by understanding those objectives can the modern litigator match them to the appropriate mechanism for resolving the dispute. The days of litigating to win at all costs or of engaging in the litigation equivalent of the four corners basketball offense (sometimes referred to as "dilly, dally and delay") to wear the opponent down are fast disappearing. Thus, the modern litigator must quickly learn the subtleties of a problem, focus on the key issues involved, assess the clients’ objectives, and be creative and flexible in developing a strategy for resolving the dispute in a cost-effective manner. In sum, she must become a problem solver.
The good news is that ADR provides the attorney and her law firm with tremendous opportunities for professional and business development. Clients are looking for new and creative ways to resolve their disputes and are willing to work with the attorney and her firm to find them. The challenge for the law firm of the future is to meet and exceed its clients’ demands. ADR will be an integral and necessary part of that creative process.
Michael Spafford is a litigation partner with Swidler & Berlin in Washington, D.C. Lawrence Freedman is an ADR specialist with Arter & Hadden in Washington, D.C. Connie Reeve is a litigation partner with Blake, Cassels & Graydon in Toronto, Canada.
This article is an abridged and edited version of one that originally appeared in Dispute Resolution Magazine, 1996 (3:2).