In only a little more than 25 years, the process we call “ADR” (or “Alternative Dispute Resolution”) has dramatically changed the landscape of dispute resolution in America.

In contrast to the relatively few alternatives available only several years ago, the world of dispute resolution now offers scores of ADR options, ranging from binding adjudicative processes to non-binding processes in which parties have complete control of the outcome. It is mediation, however, that has become the cornerstone of ADR. Mediation is an enormously powerful tool to resolve business and employment disputes early, cost-effectively and fairly. While the roots of commercial mediation may be grounded in corporate America’s efforts to seek faster, cheaper and less risky alternatives to litigation, parties to disputes have come to recognize what some refer to as the “magic of mediation” – that creative business solutions can often be achieved by exploring the underlying interests and real needs of the parties. Parties are also able to preserve relationships, resolve disputes confidentially and achieve real
time solutions.

In the past decade, the use of ADR options has risen dramatically. Court-annexed mediation is now legislatively mandated for our federal courts and required by court rule or legislation in many of our state courts. Mediation and other ADR processes are required by many of our federal agencies in procurement, enforcement and employment. Commercial agreements now frequently include sophisticated multi-tiered ADR clauses requiring executive negotiations, followed by mediation, followed by arbitration (or litigation). In employment, especially in the aftermath of the U.S. Supreme Court’s decision in Circuit City, many corporations are adopting employment ADR programs which permit employees to air their grievances early through the use of peer review, hotlines or ombuds and conclude with mediation and arbitration as final steps.

Yet, notwithstanding the successes of the recent past, the promise of ADR has failed to reach its full potential. While many companies in America have embraced an ADR approach to dispute resolution, especially those active in the programs of the CPR Institute for Dispute Resolution or the American Arbitration Association, a regrettably large number of companies have failed to achieve the benefits that flow from institutionalizing ADR. Similarly, too many law firms (including many of the firms that have signed the CPR Institute’s pledge to recommend ADR, where appropriate) have failed to make a firm-wide commitment to educate and train all of their attorneys concerning the appropriate uses of ADR. Further, only a few firms have entered into the kinds of partnerships with their clients envisioned by “Project: EDR,” Metropolitan Corporate Counsel’s call upon law firms to “spread the ADR message to those clients who may not yet understand the value of ADR.”

As we move forward in the 21st century, we can move beyond the “win-lose” environment of litigation to the full range of ADR options available for avoiding and resolving disputes, but only if we make the necessary commitment and investment. For corporate counsel, this means adopting certain best practices in ADR, including obtaining the buy-in of management, committing resources for education and training, and establishing an in-house advocate for ADR. It also means requiring outside law firms to honor the CPR Institute’s pledge in a meaningful way. Corporate counsel are in a good position to conduct ADR audits by seeking information about their law firms’ commitment to ADR education and training, ADR resources, and formal screening programs to determine whether disputes are appropriate for ADR.

For both corporate counsel and the private bar, the problem-solving approach to dispute resolution offered by ADR can be extremely rewarding and stimulating. By making a meaningful commitment to ADR, law firms and their clients can promote the kind of ongoing communication concerning the client’s goals and objectives that will give real meaning to the concept of “partnering” and add substantial value to the client’s bottom line.