Nicole D. Galli, Law Offices of N.D. Galli LLC

As a litigator for over 25 years, I have handled a number of international and other complex commercial arbitrations. In each of those, I was typically the only woman in the room—not only among counsel representing the parties (and the clients) but also the arbitrators. Indeed, in all of the international arbitrations I’ve participated in, only one of the arbitrators was a woman, and even then she was an accountant and not a lawyer.

I am not alone in my experience. Statistics show that very few arbitrators in complex international arbitrations are women, regardless of the tribunal system used. Other diversity, including in terms of race, sexual orientation, ethnicity and the like, is also lacking in ADR. As discussed in the recent report to the ABA House of Delegates from the Dispute Resolution Section in support of Resolution 105 (which advocates growing the number of diverse neutrals on ADR rosters and encourages the selection of diverse neutrals) (ABA DR Report), while data shows that law lags behind other professions in diversity, diversity among neutrals (mediators, arbitrators and other dispute resolution practitioners) is even worse as compared to the rest of the legal profession.

Some argue the statistics shared in the ABA DR report are due to a pipeline issue—there simply aren’t enough of women and diverse neutrals to go around. Certainly, to some extent this is true. There are many more nondiverse men than women or diverse neutrals. The ABA DR Report highlights this issue, noting that roster data from several major institutional ADR providers (e.g., the American Arbitration Association (AAA), FINRA, JAMS, International Institute of Conflict Prevention and Resolution (CPR) and National Arbitration and Mediation (NAM)), shows that gender and race/ethnic diversity on these rosters is likely less than one-half that of law firms. This is in spite of efforts from some of these organizations to increase diversity on their rosters, dating back as far as the early 2000s in some cases, and that women have received at least half of the JD degrees for at least the last 10 years.

But perhaps more important is the “selection” problem. Notwithstanding the availability of many female and otherwise diverse neutrals, as the ABA DR Report states, “even when they succeed in being added to rosters, qualified women and members of racial and ethic groups are selected to serve as neutrals at levels below their representation in the profession.” It is also critical to look at who is being selected for certain types of matters. For example, statistics from several organizations show that women are selected at a very low rate for high-value business disputes. Further, others recognize that the white men predominate in the pool of “usual players” for business disputes and that women and other diverse individuals are less likely to be selected as the “chair” of three arbitrator panels in commercial disputes.

As the ABA DR Report also observed, the nature of the ADR landscape makes this problem even harder to identify and solve. ADR, by its confidential and private nature, makes it difficult for the public (and even clients) to realize that a problem exists, let alone be able to address it. And as those of us who have participated in the ADR process know, much of arbitrator and other neutral selection depends upon reputation and recommendations from colleagues. In combination, this is precisely the kind of culture and dynamic that is highly susceptible to the impact of implicit bias.

To the extent that diversity is an important goal—both because it is the right thing to do and because extensive data from McKinsey and other sources shows that diversity leads to better decision making and results (both financially and otherwise)—the sharp lack of diversity among arbitrators and other neutrals is an inherent problem. When you consider that the judiciary (at least on the federal bench), is one of the bright spots in the legal profession in terms of diversity, it raises serious questions about the merits of choosing to use an ADR process instead (unless a conscious effort is made to ensure diversity on the panel).

As Judy Woods, a member of the AAA large and complex commercial disputes and international panels for over 25 years, noted, not only can having some diversity on a panel improve decision making, there is also a significant difference between having one woman or diverse individual on a panel and having at least two. As she stated, “women and race-ethnic minorities often have different life experience or even just a different framework for analyzing issues. The ability to seek creative solutions is affected by one’s life-experience.” Thus, “arbitration panels should strive to have more than one token female/minority,” so this benefit is amplified.

In addition, not having women and other diverse neutrals deciding disputes also undermines client confidence in the ADR process. This was most notably highlighted in the recent suit brought by Jay-Z against the AAA to halt the arbitration process, where he alleged that not having a robust roster of diverse arbitrators to choose from in a business dispute left him without a panel of arbitrators matching his life-experience and could lead to “unconscious bias” in decision-making.

There are now many initiatives in the ADR community making concrete and measurable improvements in diversity. These initiatives include the Equal Representation in Arbitration (ERA) Pledge, which “seeks to increase, on an equal opportunity basis, the number of women appointed as arbitrators in order to achieve a fair representation as soon as practically possible, with the ultimate goal of full parity.” Both individuals and organizations can sign onto the pledge and thus far there are over 3,000 signatories.

A number of institutional ADR providers have taken on the pledge to support diversity as well.  For example, this year, JAMS added an “inclusion rider” option in its clauses, which states that “the parties agree that, wherever practicable, they will see to appoint a fair representation of diverse arbitrators (considering gender, ethnicity and sexual orientation), and will request administering institutions to include a fair representation of diverse candidates on their rosters and list of potential arbitrator appointees.” JAMS is a signatory to the ERA pledge and modeled this rider on it.

As part of the ABA DR Report, there is a detailed “tip sheet” that discusses what clients, outside counsel, ADR providers, neutrals and other stakeholders in the legal and business community can do to promote diversity in ADR. As Harrie Samaras, chair of the ABA DR section and an experienced neutral, put it, “Attorneys and in-house counsel need to know and exercise the influence and ability they have to make a difference in diversity in the context of choosing neutrals.”

Similarly, Dana MacGrath, president of the board of directors of Arbitral Women, an NGO promoting and advancing women in international dispute resolution, underscores the need to “make a deliberate effort to consider a broader and diverse pool of arbitrators at the outset when you are thinking who to appoint to a tribunal.” To aid in this effort there are various databases of female (and diverse) arbitrators that parties can use, such as those maintained by the ABA DR section and Arbitral Women. Arbitral Women has also recently released a “toolkit” for various stakeholders to increase diversity in arbitration.

The recent Equity Project by Burford Capital, which seeks to fund litigation—including arbitration—led by women lawyers, is another creative example of how stakeholders in the legal ecosystem can drive change. If more women are leading international arbitrations as counsel, one could see how they would be more likely to select their peers as arbitrators and perhaps even ultimately become arbitrators themselves as they become more involved in the dispute resolution community. As Aviva Will, senior managing director of Burford Capital, notes in discussing the dismal statistics that led Burford to invest in women through the Equity Project: “I’m … heartened by the extent to which there is a tight-knit community of women (as well as men) in the arbitration space who are committed to change.”

Ultimately, change begins one person and one step at a time. As MacGrath stated, “my work as counsel in international arbitrations and involvement in the international arbitration community led to becoming an arbitrator as well.” MacGrath counseled that it is “important to develop your professional profile and become known in the arbitration community in order to become appointed as an arbitrator.” She suggested participating in arbitration moot competitions and “pre-moots” such as the Vis International Commercial Arbitration Moot, which “attracts many very experienced arbitrators and arbitration practitioners.” Samaras similarly suggests that potential neutrals take courses from various organizations, gain experience serving as a neutral in local courts, and join the ADR community through organizations such as the ABA DR Section, where new arbitrators can learn, raise their profile and find mentors.

It is through steps like these, in combination with counsel and clients selecting diverse neutrals and organizations ensuring the availability of diverse neutrals for selection, that meaningful change can happen in terms of diversity in ADR.

Nicole D. Galli is the founder and managing partner of the Law Offices of N.D. Galli LLC, a business litigation and intellectual property law firm with offices in Philadelphia and New York. She is also the founder and president of Women Owned Law (WOL), the first national networking organization dedicated to empowering and supporting women entrepreneurs in the law. She can be reached at ndgalli@ndgallilaw.com or 215-525-9583.