In-House Counsel's Role in ADR and Litigation
So what did the superior court judge, company president, and general counsel say when they walked into a room together?
While this might look like the start of an amusing lawyer joke, The Metropolitan Corporate Counsel's recent interview with the three sheds invaluable light on the role of in-house counsel in ADR and litigation.
The three were asked to give their perspectives on whether in-house counsel should establish expertise in arbitration and mediation, or rather, look to outside counsel for ADR services. And, additionally, if general counsel is in the decision-making role of directing a dispute to litigation or ADR, what factors it should consider before pursuing either option.
Honorable William A. Dreier, a retired New Jersey Superior Court judge, is of the belief that even if outside counsel is retained to represent a company for ADR matters, it is important for inside counsel to be well-versed and trained in mediation and arbitration techniques as well as litigation options. He says that an inside counsel that is unfamiliar with mediation can create communication lags between outside mediators and the company's legal department. Judge Dreier suggests that "general counsel should see that in-house attorneys are trained in mediation and that outside counsel be retained not only for their litigation skills, but also for their proven success in mediation."
The judge also points to the statistic of 97-98% chance of settlement for disputes. Where cost and time are factors, he suggests that in-house counsel look to pre-suit or early intervention mediation, or in the failure of mediation, implementation of tailored arbitration to set limits on scope of discovery and control other variables such as setting a hearing time and agreeing against expensive appeals procedures. He views litigation, then as a last resort, to be used when parties desire more defined procedural rules.
Company President Ryan Hamilton is the captain at the helm of Resolute Systems, LLC. He fully agrees with Judge Dreier that in-house counsel should cultivate expertise in ADR, and delves into the question of how much expertise is enough. He distinguishes companies that are involved in ongoing ADR matters related to customer contracts, suggesting that such companies have a designated in-house attorney to oversee the matters. In his purview, if ADR is an occasional need for the company, outside counsel can be a solid option to ensure the most effective procedures.
With regards to ADR v. litigation, CEO Hamilton highlights the cost and risk benefits of ADR but underlines that the alternate dispute resolution techniques only work if both parties are willing to come to the table and negotiate. While mediation gives a broad range of flexibility in finding creative solutions; Hamilton agrees that litigation may be the option if the company wants to set precedence or is strongly set in its stance.
Attorney Brian Rauer is General Counsel to the Metro NY Better Business Bureau is a true fan of ADR. Touting its time and expense benefits, he also points to ancillary benefits such as customer retention and goodwill that can be fostered from a mutually-agreed up on resolution. And while assenting that some conflicts merit litigation, he concludes that "the potential benefits to [a company's] bottom line are palpable; when you further gauge the ancillary impact, a comprehensive DR policy is simply grounded in good business."
So what did judge, the CEO, and the lawyer say to each other? They asked if anyone knew any good mediator jokes.
- ADR vs. Litigation And In-House Expertise vs. Outside Counsel (Metropolitan Corporate Counsel)