ADR

This is the sixth article in this series on mediation advocacy. The fifth article, published May 18, discussed how to prepare for the preliminary planning meeting with the mediator and opposing counsel. The article continued a scenario in which the parties, Widgetronics and DesignMetrics, entered into a contract containing a dispute resolution clause and became embroiled in a dispute over Widgetronics’ alleged wrongful termination of the contract. The parties have now completed the first few steps in the mediation process: selecting the mediator and participating in the preliminary planning meeting. The next step is to prepare for that upcoming session. This article provides a number of pointers for effective preparation.

One of the biggest mistakes that counsel make is failing to prepare properly for the mediation. Although mediation is informal and nonbinding (unless an agreement is reached), it is highly effective in resolving disputes — typically resolving disputes between 65 and 80 percent of the time. Counsel should prepare for mediation as they would prepare for any other case-dispositive event — carefully and thoroughly.

Mediation differs from arbitration and litigation in several critical respects, however, so preparation will differ as well. For instance, mediation heavily relies upon the parties’ participation. Accordingly, counsel must ensure that the client is well prepared to advocate to the mediator and the opposing party. Also, mediation is not constrained by the legal remedies that judges and arbitrators must award. The parties should invest time considering creative solutions that might meet their and their opponent’s interests. Another key difference involves the tone of the advocacy. The rhetorical skills and dynamic presence that often exemplify a good trial attorney are not typically effective in mediation. Instead, counsel should adopt a conciliatory tone and focus more on problem-solving than on posturing and positioning.

As experienced advocates and mediators, we have compiled a list of components for effective mediation preparation:

Understand the process. As indicated, the mediation process is very different from arbitration and litigation. Counsel must understand the process and have competence representing clients in the process. If you are not experienced with mediation, talk to others who are or take a course in mediation advocacy.

Review applicable procedures. Just as litigators wouldn’t try a case without knowing the applicable rules of the court and jurisdiction, counsel in mediation need to review the applicable procedures. If the mediation is brought pursuant to a dispute resolution provision, that provision may specify the applicable procedures, such as those of the American Arbitration Association. If the mediation is occurring under the auspices of a court, the court is likely to have mediation procedures in place. If the parties haven’t specified any procedures, counsel may want to discuss establishing some procedures with the mediator early in the process.

Gather information. The better and more comprehensive the information you have at your fingertips during the mediation, the better the outcome is likely to be.

• Consider for both parties: who are the key players; who owns the problem; who has the authority to actually accept a solution; who are the stakeholders; are they involved; and if any are missing how do we get in contact with them?

• Know the client’s and opponent’s cases, including the key facts, issues and controlling law. Understand the strengths and weaknesses of both parties’ cases.

• Identify the interests, goals, resources and constraints of the parties. What do they need to get in order to settle and why?

• Determine whether any information is needed from the opponent that you have not previously obtained (e.g., to evaluate the claim and determine the appropriate settlement value).

Determine who should attend the mediation.

• One member of the team should have full settlement authority, preferably someone who is dispassionate, patient and comfortable making decisions.

• Depending on the case, you may want to consider bringing someone with a technical background or first-hand knowledge of the circumstances leading up to the dispute.

• Make sure the identified individuals are available for the scheduled mediation, as well as for preparation. Sometimes, a party cannot have at the mediation all those who are necessary to provide final sign-off. For instance, a party may need to have any proposed settlement approved by a board or a group of investors. In these cases, the board/investors should be engaged remotely (e.g., by phone) during the mediation to provide whatever input is necessary in real time.

• Those attending the mediation and those contributing by phone should be fully apprised of the case and the negotiation strategy. This may take multiple sessions as information becomes available and negotiation strategies evolve.

Identify and evaluate options. Think creatively: What value can the parties exchange that might meet their needs? Include options that may not be involved in the dispute, such as future business arrangements.

Prepare a risk analysis to review with the mediation participants. Consider using a simple decision tree or another numerical/graphic/visual approach.

Prepare a draft opening statement to review with your client if the parties have agreed to present these statements.

Determine what to bring to the mediation session to educate or persuade the mediator and/or the opponent (e.g., demonstratives, financials, relevant records).

Develop a negotiation strategy that anticipates the opposing party’s possible moves.

Consider running a mock mediation or bouncing strategies off of others not involved in the case.

Prepare templates of settlement documents to bring to the mediation.

Become familiar with common impasse-breaking techniques such as: further fact finding, a mediator’s number or other recommendation, further meetings between senior executives or further meetings among just the senior executives and the mediator, or agreeing to baseball arbitration, high-low arbitration.

Prepare your client.

Preparing your client is a critical aspect of good preparation for mediation. Here are important elements of that process:

• Discuss mediation generally, and the role of the mediator. Many people confuse mediation with arbitration. If your client does not understand the difference, they may have unmet expectations and be dissatisfied in the mediation. Also, discuss the particulars of the mediation process to which the parties agreed. If, for instance, the parties agreed to a joint session with opening statements, then counsel should discuss the nature and content of the opening statement and who should present it. If the mediator raised on his or her preliminary call with counsel the possibility that he or she may want to meet with the principals alone during the mediation, the client should be made aware of this and be prepared to do so.

• Discuss who you believe should attend the mediation session. Confirm the suitability of these representatives, their availability and the scope of their authority, and schedule time to prepare them.

• Review the roles of the mediator and each attendee and non-attending contributor. Create a driver, rather than a passenger, mindset in the attendee with full settlement authority.

• Discuss the negotiating culture/style of the opponent that could impact the mediation, particularly when those are at variance with a party’s own culture/style.

• Discuss the opponent’s key stakeholders, players and likely mediation attendees.

• Review your risk analysis, including the strengths and weaknesses of both the client’s and the opponent’s case.

• Confirm your understanding of the facts, as well as the interests and goals of each party. Explore creative options for satisfying objectives and interests and creating value (e.g., payment structure, future work, discounts, bartered services, joint venture, business referrals). Discuss the client’s prioritization of its interests and the settlement options (e.g., best, realistic, least acceptable).

• Identify each party’s best and worst alternatives to a negotiated agreement. That is, what realistic alternatives might the parties have that would prompt them to take or reject a possible agreement?

• Review and refine any premediation submission.

• Review and refine opening remarks and practice them to ensure that the speaker is comfortable with the content and that the delivery sets the right tone. Consider practicing the remarks in front of others to obtain objective feedback on content and tone.

• Develop a negotiation strategy that anticipates the parties’ possible moves. Include how your proposals meet important interests of your opponent and address likely objections from your opponent.

• Particularly during joint sessions, remind your client to avoid interrupting the opponent’s remarks. If they need to say something, suggest that they take notes so they can raise their point after the other side has completed its statement.

• Prepare the client to listen dispassionately to the opponent and mediator. Often, there are nuggets of useful information that come out of mediation discussions.

• Prepare the client to be patient with the process. Mediation can take time, even multiple sessions, but it is usually successful if given the chance to work.

• Discuss proper demeanor and protocol for the mediation session, including handling and displaying emotions, the importance of tone, appropriate remarks and attitudes and potential cultural issues.

An important task for counsel to undertake is to manage the client’s expectation concerning what a successful mediation session is. The client should understand that at the end of the mediation session, they might: (1) sign a term sheet that fully or partially settles the disputed issues; (2) sign final settlement documents; (3) clarify and narrow the list of disputed issues; (4) continue negotiations with the mediator, through counsel or directly between principals; (5) acknowledge an impasse and resort to premediation status; or (6) pursue another dispute resolution process such as arbitration or litigation.

No matter which of these paths the mediation takes, the parties will have benefited from the process if they were well prepared. Invariably, participating in the mediation can: help identify facts and issues on which there is no dispute; enable the parties to obtain valuable information that they might not even get in discovery; narrow the issues in dispute, which will permit any ongoing or subsequent adversarial proceeding on the remaining issues to be less complex, less protracted and less expensive; and narrow the gap between the parties’ demands, thereby increasing the likelihood of a partial or eventual settlement of the matter.

A strategic precursor to the mediation session is the premediation submission. Including the parties in the collection and analysis of information for the submission is one element of preparation for the mediation. But what topics should the submission cover? That will be covered in the next article. •

Harrie Samaras is the founder of ADR & Law Office of Harrie Samaras and co-founder of Advanced Business Law Resources. She focuses her practice on commercial cases including disputes involving intellectual property, business and technology and other commercial contracts. She can be reached athsamaras@ablr.biz.

Judy Weintraub is the founder of Weintraub Legal Services and ACCORD LLC, and co-founder of Advanced Business Law Resources. She has more than 25 years’ experience negotiating complex commercial transactions and has handled more than 50 mediations and arbitrations. She can be reached at jweintraub@ablr.biz