At what price glory? The lure of ADR in a down economy

Great post supporting mediation from someone who counts here.

Why do insurers spend money fighting claims rather than paying them?

A recent study by Prof. Jeffrey O'Connell of the University of Virginia School of Law and Patricia Born of California State University-Northridge analyzed settlements of personal injury and defective product cases against companies between 1988 and 2004 in Texas and Florida. Their study was published recently in the Columbia Business Law Review.

The report tested an "early offers" system, which encourages businesses to promptly pay injured parties their essential losses: out-of-pocket medical expenses and wage loss.

Such a plan would reduce claim costs for general liability claims - by an average of $114,000 per claim and by $670,000 per claim for severe injuries.

The savings come mainly from eliminating non-economic damages, such as pain and suffering, and from reducing legal fees.

The early offers regime is projected to save an average of $32,000 in legal expenses in all cases, and about $211,000 in severe injury cases [read more]

RE: What’s Hot And What’s Not in The Legal Profession

In this memo to Law School Deans the ABA informs law schools across America of the results of its what's hot investigation.

Mediation is in fine company as 'getting hot' along with libel, foreclosures, art theft & fraud and bankruptcy.

Already on the boil are immigration, employment, complex litigation, global warming, family law, pro bono, estate planning, elder law and animal law.

Stone cold are med/mal and workers compensation.

This is interesting when you look at my last post showing CPR's main sources of neutral work are;

technology 18%
franchise 18%
accounting/tax/financial 15%
shareholder and partnership 10%
employment 6%
energy 4%
construction 4%

Hat tip to the Touro Law Center

CPR's 2007 Annual Report highlighting accomplishments, programs and services

Here for CPR's rather self congratulatory 2007 Annual Report just out today

The Complex Case Class of '08

Here's the great bunch of folks I spent last week with in the mediating the complex case course at Pepperdine.

That's Bruce Edwards on the left and from whom we all learnt so much - Bruce is the real deal in high stakes mediation - as well as being heavily involved in the governance of JAMS, he puts in table-time all over the US, mostly splitting himself between the tables of Las Vegas (that's mediation tables - Bruce's family only lets him mediate in Sin City if he leaves with more money than he arrives with) and the highly polished boardroom tables of his hometown San Francisco.

Nowhere else that I know of can you get the type of insight into the specialist world of mediating complex cases (and for 'complex' read multi 15+ lawyered up parties; with insurance coverage issues; $ in the millions; and a line of experts and lawyers stretching the entire length of The Strip).

More on course content later, as right now I would like to honor course participants for their most gracious welcome of this Kiwi.

From left, after Bruce, there is;

Manuel Gomez of Assistant Prof at Florida International University - it's a small world when you discover a mutual interest in breeding earth worms for recycling purposes (don't ask, as this blog is relentlessly on-topic).

Don Philbin of San Antonio - take a look at this superb article Don authored called The Psychology of Bad Economic Decisions and published in last fall's JAMS newsletter. I'm going to be show-casing more of Don's work in coming posts, especially his article The One Minute Manager Prepares for Mediation: A Multidisciplinary Approach to Negotiation Preparation published in Harvard Negotiation Law Review soon.

The back row gang of Beth Greenfield-Mandler, Joe Unger and Bill Roland, all vastly experienced circuit mediators for the Eleventh Circuit Court of Appeals in Miami mediating exclusively appellate cases in the federal system - a very challenging environment to do this work in. Joe showed us a mediator opening to die for.

Harvey Goldhammer of Glendale, CA who so generously shared his longtime experience of the insurance world.

Rebecca Callahan of Newport Beach who has the grooviest website out there.

Jim Ruh, a wise Colorado attorney mediator and trustee of the Colorado Ballet.

Marion Uitslag of The Netherlands and who gave us all a copy of her wonderful book The Ins and Outs of Mediation (complete copy online here).

IP attorney mediator Craig Metcalf of Salt Lake City who is expanding his neutral practice as we speak

Attorney, test pilot, engineer, and naval officer Dave Hunter who was second only to Bruce Edwards in his understanding of the murky world of insurance litigation.

Beverly Hills mediator Paul Locker whose background in IP, entertainment and licensing law means he has rubbed shoulders with the best of Hollywood talent over the years.

The legal community has learned to accept low-functioning mediation

I have had a draft post sitting on my laptop for nearly 6 months now but I haven't posted it. I'm not ready to lose half my readers yet.

The working title is something like 'lazy mediators don't do joint sessions' or 'lazy mediators only meet in private'. I couldn't decide which one would offend least.

And it includes such pearls as 'joint is where we do our brain surgery - anyone can be a high-priced bellhop between rooms'.

I mean, it's not as if I haven't posted gently on this topic before; see In Praise of Joint Sessions.

At one stage, I even tentatively put forward a 'third mediation space' theory - a space with its own behaviours and protocols, in addition to joint and private spaces; see the Third Space (1) (2) (3).

'... Corridors can be furtive and risky spaces on mediation days – ‘don’t ask me to cross the centre line, but I’m quite close to it’ kinds of places, ideal for short line ups of lawyers or parties. My technique has evolved quite differently in each of these three spaces – so differently I wish someone would legitimise the humble corridor encounter by giving it a fancy name and teaching a course on it.

Then more recently there was the changing nature of the plenary session in mediation.

Now my colleague, Stephanie West Allen, has unknowingly forced my hand by kindly sending me an article by her friend and long-time mediator, Joe McMahon.

Moving Mediation Back Toward Its Historic Roots—Suggested Changes, published in this month's Colorado Lawyer, is possibly one of the most important, and I hope controversial, articles authored by a practitioner in the recent past.

And brave.

Well, you have to be to suggest that 'the legal community has learned to accept low-functioning mediation'.

Moving Mediation Back Toward Its Historic Roots does much more than just making the case out for joint sessions, but when Joe suggests that the bright line that historically divided the field is no longer along the facilitative/evaluative fault line, but now more about a "dialogue-based" versus "separation-based" rift, I got interested.

There are some who think that is what mediation is - a process where you show up at a downtown building but never speak to or even meet the room full of people with whom you have your problem and whose cooperation you require if you are to resolve it.

We know why some ('I don't let my client speak') lawyers resist joint - fear of the unknown, fear of the uncertainty and the unpredictable. Fear of a loss of control. And sometimes, as McMahon observes, 'a desire for anonymity in making very self centred proposals for settlement, relying on the mediator to convey the offer'.

But why some mediators also? Is it the same deal? - because we know it's harder in joint, and we know it's certainly uncertain and predictably unpredictable. Or is it a nod to the all knowing market?

Joe's article requires a response from provider organisations - time to defend your corner guys. Whether you like it or not, you are shaping our profession. And some of us don't like that shape.

After all, who employs the ex-high-stakes-litigators and the newly-retired-judges, and who sometimes promise telephone numbers, often to those without any experience in consensual models of dispute resolution?

'Perhaps it was error to frame the mediation debate of the 1990s as "facilitative" versus "evaluative." Instead, the debate should focus on "dialogue-based" versus "separation-based" processes.

It is important to consider why mediation may have diminished or even abandoned dialogue among conflicting parties. Doing so may have happened in response to market demand or in an effort to promote efficiency.

In some types of mediation, conflicting parties are separated and engage in little or no dialogue. That suggests the efforts and interventions of the mediator or facilitator must replace what would have been accomplished by dialogue. This places enormous power in the hands of the mediator.

If denial and avoidance are thought to be the most universal responses to conflict, it is important to consider whether separation-based mediation merely plays into and enables such a response to conflict. If so, it is time to evaluate whether mediation and facilitation were really intended to provide support for such denial...

Support for the market model of mediation ("the market knows what it needs and what it needs is the settlement conference") is claimed in the high settlement rates in commercial settlement conferences. However, a high percentage of civil cases always have settled, even long before mediation was in vogue...

McMahon asks of mediators; 'are you fully satisfied with the quality of dialogue among conflicting parties in the mediations in which you participate?'

What a wonderful question! In my case however, only occasionally.

As McMahon says, 'By broadly considering conflict and mediation, it may be possible... to move these processes back toward their historic roots—that being processes based on parties telling their stories in face-to-face dialogue aided by a mediator who can guide them to more effective communications.'

But why? If it isn't broke, don't fix it. Commercial parties are settling, users are not up in arms are they? Heck, it's them who ring and say 'we don't do joint'.

Well grasshopper, there is a reason we should all be concerned if a separation based model is to become the norm.

And it's not about resolution rates, because I suspect they stack up.

No, it's all about the the timbre and tone of resolution - but that's another post.

I [heart] LA

Next week, I am in sunny Los Angeles visiting colleagues and teaching the Mediating the Complex Case with JAM's Bruce Edwards at Pepperdine University's 21st Annual Summer Professional Skills Program in Dispute Resolution.

Expect salty posts from beside the seaside at Malibu where the faculty is being lodged in style (and where even the beach is wireless!).

I am also scheduled to spend a day being a fly on the wall at one of Gene Moscovitch's mediations and I also want to catch up with ADR Services' president and founder, Lucie Barron who I video interviewed last time I was in LA.

I then spend a day shadowing well-known commercial mediator Jeff Krivis which will be a real treat.

Both these guys are at the top of their game and have a lot to teach a farm boy from New Zealand.

Of course, one of the reasons for going to LA is to spend time over computers and coffee with Vickie Pynchon who I hope will come with me to meet Greg Katz of the LA Daily Journal to explore ways in which the blogosphere can work in with ADR friendly legal media.

Winners of the Make Talk Work International Video Competition

View the winning videos (funded by JAMS) on the City University of New York Dispute Resolution Consortium website here (they seem slow to load)

Practitioner perspectives on caucusing

I thought this was an interesting exercise - contributions to a recent CADRE Practitioner Listserv thread on caucusing have been summarised and presented in a 3 page document here.

12 Articles on Mediator Income

Given the huge response to my post Why do so few mediators make any money? (more than double the number of readers), you may find these 12 posts - all with further links into the topic - from me and others on mediator income of interest;

1. Let Me Tell You Why So Few Mediators Make Money (Dina Beach Lynch)
2. What UK Mediators Charge
3. How To Make Money as a Mediator (And Create Value for Everyone): 30 Top Mediators Share Secrets to Building a Successful Practice
4. Mediators earn $66,800
5. How Rich are We? A Modest Response to Geoff Sharp's Mediator Salary Post (Vickie Pynchon)
6. Mediators, are your hourly rates keeping you afloat? (Tammy Lenski)
7. Income is for dummies...
8. The Money Income Ceiling (ADR Practice Builder)
9. Competing mediation firms resolve to snag retiring judges income of up to $700,000 lures big-name jurists from bench (LA Business Journal, Jan 21)
10. Provocative Mediation Question (Dina Beach Lynch)
11. Can You Make any Money in Mediation? (Dina Beach Lynch)
12. Making Money as a Mediator (Dina Beach Lynch)

Sort of related;

Mediator Invoicing - the Bell Curve of Gratitude
Dreaming? Or living the dream?
More litigation = More mediation?
Yes, Multiple Streams of Mediation Income is Possible (Dina Beach Lynch)

Find X

Man, I can hardly spell when I get up on the whiteboard in a big mediation at the best of times - let alone do calculus.

But this week, after I offered to track on the whiteboard a geotech's explanation of soil density around some suspect marina piles, I was asked to 'find X' on his diagram - sure, I saw his lips move, but all I heard was blah blah blah.

But I am pleased to report dear reader, I was equal to the task.

Why do so few mediators make any money?

Now that I have your attention - this is just one of the chapter headings in a new article analysing the market for private mediators in the US by Urška Velikonja, a teaching fellow in Harvard's Economics Department.

Of course I would be remiss if I did not mention that the very next chapter asks Why do some mediators make so much money?

In any event, it contains much interesting data on the business end of what we do, although Urška surely the footnote has had its day?

Some of the money quotes;

>The vast majority of people who enter the mediation market drop out within two years. Of those who persist, about ten thousand earn $50,000 or more per year from mediation.

>Federal, state and local governments employ around two thousand mediators. Their average annual salaries range from $55,000 for local governments, $57,000 for state governments, and $105,000 for the executive branch of the federal government.

>In California, the median divorce mediator on the court roster charges $300 per hour, and not one charges less than $150 per hour; in Virginia, on the other hand,the median mediator charges less than $125 per hour, and only top 10 percent charge more than $200 per hour.

>Of the few thousand mediators, who are able to mediate full-time, the majority earns $50,000 or less. There are fewer than a thousand mediators and possibly a few hundred, who make a good living, grossing $200,000 or more per year.

>Only a couple dozen or so mediators, primarily former judges practicing with JAMS and a few high-end commercial mediators in markets, where the cost of living and, as a result, mediation fees are high, are able to consistently bill over one million dollars per year.

>Many mediators are “lone rangers.” They like and prefer working on their own, and form partnerships only for practical reasons: so that they do not have to turn away clients when they are sick or go on vacation, so that they can share the costs of administrative staff and marketing, and so that they have someone to socialize with.

>Mediators’ overhead is low (20-25 percent of gross revenues, and no more than 30 percent) and each mediator keeps the majority of the revenues without the need or the incentive to employ junior mediators. As a result, there is virtually no demand for junior mediators...

>The article presents data that income distribution in the market for private mediation in uneven, and suggests that the market is a winner-take-all market, where a few mediators at the top of the pyramid are busy and well-paid, while the vast majority of aspiring mediators is constantly looking for work, yet makes little or no money.

2008 Lawyer As Problem Solver Award Announced

The 2008 American Bar Association Lawyer as Problem Solver Award will be presented to Tina Rasnow, Coordinator of the Self-Help Legal Access Center Superior Court, County of Venturaas as the individual recipient.

The Brooklyn, New York Attorney's Office under District Attorney Charles J. Hynes, is announced as the institutional recipient

[read more]

Where do all the mediations go?

Any jobbing mediator will know what I mean.

It's like socks - where the hell do they go to between the washing machine and the sock draw?

After a flap last week where I interrupted a mediation to return a red hot call from a lawyer looking for an urgent date, and followed that with a confirmation blackberry email on the run providing a spread of dates, I get this today;

[click to enlarge]

What, but @!*?
I mean - I'd be delighted to be of assistance at any time in the future.

Mediating f2f holographically

Ok, when you are truly a carbon neutral mediator in future years and refuse to travel big distances to your high stakes mediations, remember you saw world’s first live holographic video feed here on blah... blah...

See these guys? They are on stage together, but the chap on the left is in Bangalore, India and the two on the right are in San Jose, CA. This is now!

My guess is that, within a decade, many of us will insist on mediating with 3D holographic display technology beaming up the parties and their lawyers effortlessly from all around the city, state, country or globe.

When you play the video, watch the start as these Cisco executives, who are in the US, walk on stage in Bangalore.

Hat tip to Guy Kawasaki

The gathering pace of mediator feedback online

As most readers will know from my recent posts on IMI Certification - online feedback by users of mediation is set to become all the rage.

Here is an example of recent real IMI feedback on a UK mediator and, depending on how IMI's Global Mediator Certification gets on, this format may become the norm.

Meanwhile individual mediators like me have sought online feedback for some years now - with mixed success I'm afraid. In my experience, it is a struggle to get qualitative feedback from commercial users, but when it is offered and given, it's full of learning.

Meanwhile in the UK, The Mediator Directory which is a sister site to The Mediator Magazine went live last week and put its ability to gather independently solicited and independently verified, on the record and therefore traceable, feedback as the main attraction for buyers and sellers.

"The Directory’s ultimate aim is to offer the market a comprehensive profile of every UK mediator, whether professional or part time. Published online, the website is also designed to serve as a feedback repository for parties and advisers to leave such comments as they believe may be useful to other parties seeking to use the same mediator"

It will be interesting to see the level of uptake from the UK mediation community. Uptake should be fairly easy to spot as every active UK mediator appears to be listed, regardless of panel affiliation and all profiles await completion of details.

I mean, for £120 annually can you afford not to be in? And if you are, can you afford not to have feedback as part of your online profile - even if you are suspicious of it?

To some extent it may depend on what place you occupy in natural order of the UK mediation foodchain, but unless you are one of these mediators, I think not.

A helpful Directory FAQ here