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Layoffs, reduced expenses, elimination of out-of-state CLE, removal of "perks" like free office coffee and water: Invariably, cost reductions feel like a punishment.

Most articles about the cost-cutting initiatives of in-house legal departments focus on these punishments and the hardships facing in-house lawyers in these recessionary times. While the cost-cutting initiatives are portrayed as necessary short-term solutions to economic difficulties, the implication is that neither the lawyers nor the corporations are well served by them in the long run. The articles rarely discuss the opportunities that being cost-conscious can create.

Indeed, sometimes limited resources can inspire corporate legal departments to think creatively and invest in programs that save money, effectively utilize in-house counsel and improve customer service.

Resolving disputes through alternative dispute resolution, as opposed to litigation, is one way that a corporation can save money. ADR can also save the corporation time because it is often less disruptive to business operations than litigation. And, when it is used to resolve disputes with customers, it can have a positive impact on customer relations. Mediation, in particular, can be an effective way to resolve customer disputes in a way that is better for everyone involved.

The University of Pittsburgh Medical Center began utilizing mediation about five years ago as a way to resolve certain legal disputes and grievances that patients or families (the center's "customers") have with the system. Historically, the health care system provided customers with limited avenues to resolve their grievances and disputes. They could initiate the hospital grievance process, but if that process proved to be unsuccessful, litigation was their only recourse.

If the grievance or dispute resulted in litigation, it would proceed in the normal course. It would be adversarial, expensive and time-consuming.

The litigation process was often frustrating for our customers and our staff. It was also inconsistent with our overall clinical approach and our mission, which is based on communication, compassion and caring. In addition, the process was expensive for UPMC because outside counsel would represent the system in those legal proceedings.

Moreover, litigating all health care disputes was a great drain on community resources. The state courts had too many unhappy health care customers who had sought litigation because they believed that they had no other choice. For that reason, as well as others, in 2004 Pennsylvania started an initiative to decrease medical malpractice costs. This initiative included encouraging the use of ADR to resolve medical malpractice cases.

Inspired by the efforts of the commonwealth and recognizing the need for change, the senior leadership team at UPMC developed two ADR programs. In the claims mediation program, when appropriate, mediation is used to resolve lawsuits that have been filed against the system by patients or their families. In the UPMC Intermediation Program, a patient-centered ADR program, mediation is used to resolve complaints and grievances that have been filed with the UPMC patient relations department, but that are not involved in litigation.

Both programs give UPMC's customers the opportunity to gain more clarity about their health care experience, obtain answers to matters in dispute and hopefully obtain closure -- something that is not often obtained through litigation. The senior leadership at UPMC implemented these programs because they believed that it was the right thing to do. However, their good intentions have benefited UPMC's system and customers in many ways.

The UPMC Intermediation Program is a part of the overall patient grievance process. The UPMC patient relations department forwards grievances to the UPMC corporate legal department for review to determine whether they are appropriate for the program. Generally, grievances that are complex and cannot effectively be resolved through other means are accepted into the program.

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