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Developing Your ADR Practice and How To Make It Pay
Chaired by Rod O'Driscoll, 14 June 2005
On 14 June Rod O'Driscoll chaired a discussion on a subject dear to most of our hearts. ADR is often run in parallel with a practitioner's main discipline and in his opinion it encompasses mediation and conciliation where a facilitator enables the parties to resolve their own disputes. The three speakers were then introduced representing the following disciplines: lawyer, architect and engineer.
Jane Rylands of Cripps Harries Hall gave an insight into how ADR is operated within a large, regional law practice. She explained that this type of organisation has various strengths: a pool of people with various skills and qualifications including adjudicators, arbitrators and mediators, all of whom are legally trained and so think like lawyers, some specialising in less obvious fields. Also the organisational infrastructure is already in place and a training budget available, lessening the financial burden on the individual for both this and for subscriptions to professional bodies.
To balance the strengths there are weaknesses, the first and probably most obvious is the perception that the services will be expensive, but this may not take account of value for money. Secondly, the parties may perceive that a non-binding process is not the best way forwards, assuming they are even aware of the various form of ADR available to them in the first place.
The large law firm has a number of opportunities to develop ADR around their existing national client base. The Court's support of mediation has increased opportunities for the use of ADR and the popularity of adjudication means it is the most common form of dispute resolution in the construction industry. Lawyers can also encourage the use of ADR in the way in which contracts are drafted and by establishing a dispute resolution hierarchy through escalation. Although other law firms and individual consultants pose a threat to the large law firm, Jane considered that the more who are involved with ADR, the more popular it will become and so the market will expand.
Robin Orme next gave us the benefit of his experience of practising ADR as an architect. Architects are used to dealing with disputes on site through their role as contract administrator, however, to succeed in ADR, some legal training is required and it is important not to under estimate the effort required to make the transition from designer into ADR. It is necessary to develop decision making skills and to understand the rules of natural justice and to realise the compliance regime is different to that of contract administrator.
Work originates either from institutional lists (most of which are now closed to new entrants), or from personal recommendation. The work ranges from being an expert witness, where it is necessary to keep up to date with the construction industry to be effective, through mediation, to being a party advocate. For a designer the latter role requires a change of perspective from that of being an advisor to that of fighting a battle as best you can, with the given material.
Robin explained it is desirable to retain your primary job whilst developing your ADR business, which does not happen overnight, and this also helps to keep you up to date. It is important to see and be seen, to get to know potential clients and to instil confidence in them.
Dennis James then gave us the benefit of his experience from the point of view of the engineer. He said that engineering contracts use different language and terminology to building contracts and the value of the contracts (and hence disputes) is greater. Far more projects are international involving both large quantities of documentation and periods of travel outside the UK, making it difficult to keep regular work going, unless it can be delegated. Dennis provided a handout which outlined how you start an ADR practice. The list of things to consider included knowing which area(s) you are qualified to work in, supporting your own professional body, strictly following the principles of ethics, carrying out regular searches for work and the need to be known in the market place. The latter can be achieved by writing articles and giving lectures whenever possible. The importance of having good, properly trained staff was emphasised as well as the need for good PI cover.
Jane explained that to make ADR pay, her practice charges the same hourly rate as for other legal work, so whilst it might not be cheaper it would usually be faster than other methods of dispute resolution. Robin though that the main challenge was to use your time effectively and to understand that the hourly chargeable rate is different to the actual recoverable rate, in other words it is important to establish an appropriate rate for the work. Rod also supported this view emphasising that too low a fee gave the impression that the service may not be adequate whilst too high a fee might put off potential clients.
Rod then passed the discussion over to the floor. Advice from the attendees ranged from the need to see and be seen, to being persistent with appointing bodies. There was a general consensus that a great deal of work originates from personal recommendation and that many of the same problems arise whether the contract is small or large. It may be difficult for employees to develop an effective practice because flexibility is required, together with the need to balance other work to ensure a critical mass of projects, which in turn is required to provide that all important regular income.
Reported by Murray Armes