Today's young attorneys speak often of "the dying trial." Given the skyrocketing costs of litigation and the quagmire-like caseloads choking the courts, they are likely to spend much more of their careers pursuing efficient remedies such as mediation and arbitration. Amid this growing focus on Alternative Dispute Resolution (ADR), however, the next generation of practitioners will need to pay close attention to little-discussed ethical issues that can arise during these out-of-court proceedings, said LeClairRyan partner Elizabeth K. Acee, during a panel discussion at the fall conference of the American Bar Association's Young Lawyers Division.
"Mediators and arbitrators can turn to written standards, such as the ‘Model Standards of Conduct for Mediators' and ethical codes like ‘The Code of Ethics for Arbitrators in Commercial Disputes' for guidance on how to conduct themselves," noted Acee, a veteran litigator based in LeClairRyan's New Haven, Conn. office, who often arbitrates and mediates cases on behalf of her clients. "From the practicing attorney's standpoint, however, the picture is far less clear. Written professional codes of conduct say very little about rules of conduct for a lawyer in mediation and arbitration."
The panel discussion—"Deal or No Deal: The Ethical Dilemmas in ADR"—was designed to spark an upfront dialog on these little-discussed questions. In addition to Acee, panelists at the Oct. 16 event in Santa Fe, N.M. included University of New Mexico Professor John Feldman, David Levin of the 2nd Judicial Circuit in New Mexico, and the Hon. David Horowitz (ret.), ABA Judicial Division Lawyers Conference Chair.
In a trial, winning the case for the client is the clear-cut goal of any practicing attorney. In mediation and arbitration proceedings, however, the focus tends to be on securing a fair settlement quickly and efficiently. What happens, then, when a practicing attorney subverts the spirit of the proceedings by engaging in trial-like tactics, such as springing a last-minute "gotcha" on the plaintiff by revealing critical evidence withheld for maximum impact? "Is it unethical to come to mediation with the intention of withholding a significant piece of evidence? Technically, probably not," Acee said. "But at a certain point, ignoring the intent of the process might constitute an ethical breach. Other potential ethical pitfalls might involve a clear understanding of the authority your client has given you to settle, and what is ethically proper in how you represent that authority before the mediator. These are the kinds of questions that regularly arise, and may require more training and guidance for today's young lawyers."
Clearly, Acee noted, practicing attorneys have an obligation to make sure their clients understand the significant differences between litigation and ADR, as well as their own professional obligations during out-of-court proceedings. "The client should be willing to go into mediation with the right spirit, understanding that nobody walks away from the table perfectly happy, and that sometimes the goal is to minimize the cost of the dispute in terms of time and money, rather than take a ‘scorched Earth' approach to the litigation," Acee explained. "If it is a court-mandated mediation, the client should also understand how this might affect the tenor of the proceedings. The key, ultimately, is transparency in communications between the practitioner and her client."
Of particular interest to the audience was the panelists' discussion of ethical questions related to ADR and the controversial practice of unbundled services, in which lawyers do some, but not all, of the work on their clients' cases. "In today's economic environment, many young lawyers are coming out of school and hanging up a shingle rather than landing jobs with big firms," Acee said. "There is a lot of buzz about unbundled legal services, in part because this approach can be helpful to solo practitioners."
However, unless communication about mutual expectations and obligations is clear and strong, the unbundled approach can be risky for both attorneys and their clients, Acee said. The veteran attorney gave the example of a personal injury case in which an attorney agrees only to provide legal advice related to mediation, leaving it to other lawyers to handle anything related to litigation. "The first question is, 'OK, ethically, can you do that? Can you just pick and choose what pieces of a transaction or what pieces of a case you are going to handle for a client?" Acee said. "And does that put the client at some sort of a disadvantage if you do?"
After all, Acee noted, attorneys have an ethical obligation to represent their clients to the best of their ability. Little wonder the unbundled approach remains controversial. "The big ethical pitfall is how do you define that client engagement? How are you drafting that engagement letter to make sure that the client understands what the relationship entails?" she said. "This is particularly important when you are dealing with an individual client with limited knowledge and resources as opposed to a sophisticated corporate entity."
As the cost of litigation continues to be prohibitive for many litigants, both individual and corporate, the legal profession will no doubt sharpen its focus on ADR. "As we move in this direction, it is important to be cognizant of the intent of the process and your obligation to conduct yourself ethically throughout," Acee said. "This requires sincere reflection, as there are not necessarily bright lines for practicing attorneys and their clients. The bottom line is this: As much attention and precision as attorneys have always brought to the courtroom, they must now bring to the negotiating table during mediation and arbitration. Their clients deserve nothing less."