Why Mediation Matters in Modern Legal Practice

Alternative dispute resolution (ADR) has evolved from being an optional sidebar to a strategic centerpiece in modern legal practice. ADR is particularly valuable in disputes involving M&A transactions, contractual disagreements, shareholder conflicts, employment claims, and commercial litigation.

Mediation — arguably the most flexible and collaborative ADR tools — can significantly reduce cost, accelerate timelines, and empower parties to craft a resolution agreeable to all. For managing risk in high-stakes environments, mediation provides a practical and often superior alternative to court.

Byeongsook Seo, a commercial litigator with Snell & Wilmer, summarizes the ‘cleanliness’ and practicality of mediation nicely: “There’s no judgment. There’s no jury. The goal is to find a resolution.”

Mediation vs. Other Forms of Dispute Resolution

In order to understand mediation, it is important to distinguish it from other forms of dispute resolution, like litigation and arbitration.

Litigation is the traditional method of resolving disputes via the court system. It involves extensive motion practice, discovery, trial, and the possibility of appeal. It is public, can be expensive, and can drag on for years.

Arbitration is a private process where disputes are decided by one or more arbitrators. The parties are bound by the arbitrator’s decision, referred to as an arbitration award, and there are limited grounds for appeal.

Mediation is a non-binding negotiation facilitated by a neutral third party. The mediator doesn’t make a decision; instead, they help the parties explore mutually acceptable solutions.

As Elizabeth Shampnoi of Shampnoi Dispute Resolution and Management Services, Inc., notes, you don’t have to convince a mediator of anything because they are there to help both parties reach a resolution and not to make a decision.

When Is Mediation the Right Move?

Mediation is often appropriate far earlier than many parties realize. Early-stage mediation can conserve resources, reduce litigation fatigue, and foster creative, confidential solutions.

The process gives parties control and certainty — something neither litigation nor arbitration can promise. Shampnoi observes, “When you’re in arbitration or in court, somebody else decides, but, in mediation, you control the outcome.”

Another often-overlooked advantage is confidentiality. Communications during mediation are typically protected under mediation privilege doctrines, allowing parties to speak freely without fear of admissions being used later in court.

Getting the Timing Right

Leslie Berkoff, partner at Moritt Hock & Hamroff and a seasoned bankruptcy mediator, underscores that there’s no ‘one-size-fits-all’ answer to when mediation should occur. For example, early mediation in bankruptcy clawback claims may be optimal, as the factual issues are often straightforward and both parties can benefit from cost savings.

But timing also hinges on information flow. Mediation can stall when parties don’t yet know enough to engage meaningfully in the process. Along these lines, some courts have instituted what Berkoff calls ‘presumptive ADR,’ requiring mediation early in the litigation lifecycle. While these efforts aim to unclog courts, Berkoff warns that forcing parties into a premature process where the parties are not ready to engage can waste everyone’s time.

Preparing and Sharing Information

Success in mediation hinges on preparation. But unlike discovery in litigation, mediation depends on voluntary transparency.

Seo suggests a simple yet powerful tactic: submit a well-supported settlement proposal in advance, including relevant data. For example, in intellectual property cases, such a settlement proposal could include revenue reports or market impact analysis. Where the financial condition of a party may matter, it might mean sharing liquidity statements or certified financials.

When insolvency is a factor, parties should consult tools like DailyDAC’s Distressed Deal Data or bankruptcy public notices. Understanding whether the opposing party is financially viable — or at risk of Chapter 11 — can significantly influence negotiation strategy.

Shampnoi and Berkoff both emphasize that mediators can’t help if they’re kept in the dark. Berkoff recounts a mediation where the late disclosure of a crucial document delayed resolution by hours. “We would be eight miles down the road if I’d known about this earlier,” she recalls.

The Right Way To Use Mediation Statements

Berkoff highlights a common mistake, cautioning against using a mediation statement that reads like a summary judgment motion: “If your submission is just a legal brief with ‘confidential mediation’ written at the top, you are missing your mark and wasting an opportunity.”

A strategic mediation statement should:

• Focus on strengths and acknowledge weaknesses.
• Provide a risk-benefit analysis.
• Share relevant facts and procedural posture.
• Share any prior settlement discussions.

Berkoff recommends submitting two types of statements:

• An exchanged statement that is persuasive yet non-combative, meant to inform the opposing side.
• A confidential statement for the mediator’s eyes only that may include settlement goals, internal dynamics, or sensitive legal vulnerabilities.

Should You Make an Offer Before Mediation?

The short answer is yes. Seo encourages lawyers to exchange at least one round of settlement proposals prior to mediation. Doing so sets realistic expectations and provides a framework for negotiation.

“The first response can be shocking if you walk in cold,” Seo warns. A surprise demand can derail the conversations during mediations and increase tension between the parties. A known ballpark range helps the mediator work within realistic parameters.

Choosing the Right Mediator

Not every mediator is right for every case. As Shampnoi puts it, you need to consider experience, style, and temperament. A mediator might be ideal for complex employment disputes under the Fair Labor Standards Act, but lack the technical acumen needed in an intellectual property or cross-border commercial case.

Mediators can be more facilitative or evaluative. Knowing whether you need a ‘soft touch’ or a ‘settlement judge’ type can make or break the experience.

Seo adds that a mediator’s work style matters just as much as credentials in some cases: “We’ve had opposing counsel where I knew I could work out a deal, but only with a mediator who could manage strong personalities.”

Choosing the Forum: In-Person or Virtual?

Experts generally agree that in-person mediation is more effective. There’s a greater commitment and focus in person. Parties behave differently when they’ve made the effort to travel, take a day off work, and sit face-to-face.

Virtual sessions are convenient, but they often lack the emotional gravity of in-person negotiation. However, virtual mediation is still a valuable tool, especially when parties are geographically dispersed or costs need to be minimized.

Preparing the Client

Clients, especially individuals or small business owners, often approach mediation with unrealistic expectations. It is important to have candid conversations about expectations beforehand. “If your client thinks they’ll walk away with a million dollars when the case is worth $50,000, you’re not helping them,” Seo explains.

Clients also need to be prepared for other issues that arise from the disputes. For example, clients should consider ‘soft costs’ like the distraction from running a business, the emotional toll, and the impact on reputation.

Final Thoughts

If your approach to mediation is merely checking a box, you’re missing a major opportunity. Mediation is about the human connection: reading people and building trust.

Mediation, done right, is a powerful tool for dispute resolution. It allows parties to save money, protect relationships, and retain control over outcomes. But the process requires intentional preparation, transparency, and the selection of the right mediator.

To learn more about this topic view Preparing for Mediation: From Selection to Presentation of Claims. The quoted remarks referenced in this article were made either during this webinar or shortly thereafter during post-webinar interviews with the panelists. Readers may also be interested to read other articles about alternative dispute resolution. 

This article was originally published here.

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