by Rita Frankenberry for Virginia Business December 2004
Companies and their lawyers
are trading the conference room for the courtroom
in settling legal disputes.
While Virginia lawyers have used mediation and arbitration — known
collectively as alternative dispute resolution — for
years, legal observers say the trend has taken on more
permanence. “This year it became clear that it’s
not a short-term phenomenon, and I think that’s
a significant thing. It became more prominent,” says
Breck Arrington, executive vice president of the Virginia
Bar Association.
Virginia Business has followed trends
in the legal profession since 2000 as part of the Legal
Elite, its
annual list of the best lawyers in the state. With
the assistance of the bar association, the magazine
polled nearly 5,300 lawyers across Virginia, asking
them to nominate their peers in 12 categories.
As the legal profession has changed,
so has the Legal Elite. This year’s
list includes two new categories, Legal Services/Public Services and Young
Lawyers. The first category includes lawyers providing legal aid services
and the second includes emerging legal stars in a variety
of specialties. The Virginia
Bar Association has a Young Lawyers Division.
The trend toward alternative
dispute resolution is supported by statistics from
the Virginia Supreme Court.
In 1995, the Circuit Court of Virginia concluded 1,764
civil jury trials. Last year, that number was cut by
47 percent to 932 jury trials. “That’s
a heck of a statistic,” says John B. McCammon,
president and founder of The McCammon Group in Richmond,
the state’s largest alternative dispute resolution
provider. “People are finding other ways to solve
their problems.”
The shift in settling disputes
short of full-blown trials is evident in both state
and federal courts,
says William E. Franczek, managing partner of Vandeventer
Black, a Norfolk-based law firm. “There are fewer
cases going to trial and more are being settled by
ADR.”
For businesses, mediation
and arbitration offer speedy ways to resolve a legal
problem, saving companies time
and money. With cuts in government funds putting constraints
on the number of court personnel available, the judicial
system is becoming overburdened with delayed lawsuits.
In fact, it’s not unusual for a court case to
take a year or longer to settle. “And that costs
money,” says McCammon. “The longer it goes,
the more it costs the litigant.”
Businesses and governments are under
pressure to solve disputes at less cost, and ADR provides
that service,
he adds. “Ninety-nine point nine percent
of the time, this is an attorney-involved activity. The attorneys are part
of the process. They use this as a tool to help their clients.”
Mediation appeals to clients because it is quick,
typically lasting only a day. The result is a private,
confidential agreement hammered out by a mediator and
both parties. Arbitration, on the other land, is a
private trial where an arbitrator decides the outcome.
The process can last a week or longer. Arbitration
typically costs more than mediation. Depending on the
case, McCammon estimates that mediation can cost parties
$500 to $5,000 to settle a dispute. In court, that
case could cost $5,000 to $500,000 depending on how
long it takes to get to trial.
The growing appeal of alternative
dispute resolution has been evident at Franczek’s firm. He says
that the use of ADR in his practice has grown 30 to
40 percent in the past year. “And in the past
five years, we’ve used it 80 percent more. In
other words, five years ago we were in court all the
time,” he says.
Virginia has emerged as one
of the nation’s
leaders in alternative dispute resolution, says Arrington
of the Virginia Bar Association. The Virginia Supreme
Court’s Futures Commission in 1990 identified
ADR as a way to relieve a backlog of court cases. Today,
it has become such a common means of settling disputes
that virtually all types of Virginia businesses are
including ADR clauses in business agreements. The clause
can identify an arbitrator or mediator who would be
used if a disagreement occurs. In reality, though,
the parties in a dispute often select a mediator or
arbitrator together.
Frequently, the most important
reason for turning to ADR is that it works. “Mediation results in
a settlement somewhere between 50 and 80 percent of
the time,” McCammon says.
The McCammon Group’s staff is made up of retired
judges and retired attorneys, who can provide assistance
with either mediation or arbitration. Nonetheless,
McCammon says 90 percent of his cases are mediated
because both parties have a say in the resolution. “Mediation
allows the parties to control the outcome, as opposed
to trials which are unpredictable. It maintains a better
relationship between the parties and, importantly,
lawyers find it enjoyable,” McCammon says. “Lawyers
enjoy serving their client in that context and for
those reasons, it has fueled the growth.”
