Collaborative Law - Helping Attorneys Bridge the Divide
The American Bar Association
I've spent half my career helping business and real estate owners solve their problems - or at least that is what I thought I was doing as a commercial litigator. I've grown increasingly convinced, though, that most commercial cases do not belong in court. Courts are public, slow, and generally not equipped to deal with business, real estate, or land use questions. Courts don't care about fluctuations in market prices, construction seasons, or building cycles.
So, for the last four years, I have explored every alternative dispute resolution (ADR) method I could find. During that research, I was stunned by how many times people said the number one barrier to a successful ADR solution is the parties' attorneys.
I couldn't believe it! Why would that be true?! Some say attorneys obfuscate settlement for personal gain. It's obvious, they say: attorneys make more money if they continue to litigate; they make nothing if the case settles.
I refuse to believe that is a pervasive problem. If it were, then attorneys have placed their self-interest before the interests of their clients, which blatantly violates our professional ethics.
In my experience, attorneys sometimes obfuscate settlement out of a fierce but misguided belief that our adversarial system requires it. I've seen it firsthand.
Last month, I mediated a business "divorce." Dan and Fred owned a business that operated two stores. They had closed them to force one another to negotiate. Interestingly, at the beginning of the mediation, Dan and Fred agreed on two things: 1 - they did not want to continue doing business together and 2 - the most important thing was to re-open the stores as soon as possible. Given this starting point, by the end of the day, Dan and Fred had agreed to 99% of the deal terms. Dan and Fred would each take a store. They agreed to the buy-out terms, including the amount of "damages" to be paid to compensate for the wrongs they had suffered. They did not agree, though, on who should pay the damages to whom. They each felt they should be paid by the other.
Unfortunately, the settlement failed on this point. It failed, in part, because every time Fred considered compromising on it, his attorney reminded him he was right on the law and he had already given up so much, compared to how Dan had wronged him. Ultimately, Fred decided this was where he would draw the line. The deal fell apart. The stores did not open.
Although I was not privy to the private conversations between Fred and his attorney, I believe Fred's attorney killed that deal. She got stuck in their traditional lawyerly, advocacy efforts and lost sight of Fred's true goal. Fred said he wanted the stores to re-open; he never said he wanted more money. In fact, if the stores had opened the day after medication (as they could have) Fred probably would have made back all of the "damages" his lawyer advised him not to pay.
And therein lies the rub. Attorneys are taught in law school that our job is to speak for their clients. We advocate for clients' rights and help them navigate the labyrinth of law and evidentiary rules to ensure their voices are heard and their legal arguments are as strong as possible.
But what if we are not in court? What if enforcing all of a client's legal rights requires the other side to lose, and requires the deal to fall apart? What should an attorney do then?
That is the situation I find most commercial and real estate clients in. The law is not clear. The facts are not dispositive. Proving the client right will require months, if not years, of litigation and requires the "other side" to lose. Most of my clients, though, don't care about being right. They don't need to be right. They need to get back to business.
Faced with this situation, attorneys need to think differently. We need to understand being "right" on the law is necessary, but it is not enough. Being right on the law only matters if you and your client know when to use the law to achieve the client's goals, and when to ignore it.
This is not blasphemy. Each of us routinely chooses not to exercise every legal right we may have. (When was the last time you stood in front of town hall and declared your beliefs and views regarding textual versus contextual constitutional interpretation?) You have that right. Exercising it now may be more important than it was five years ago - but that is your choice. Having the right is important. Choosing when to use it, is equally so.
The Uniform Collaborative Law Rules/Act (UCLR/A) can help us choose when to use our knowledge of the law. In fact, when I have described the collaborative process to potential clients, they have uniformly asked: "how do I find a lawyer who can do that for me?" The only people who have ever doubted the collaborative process might work for commercial disputes are lawyers.
What is it? Generally speaking, collaborative law is limited scope of legal representation through which attorneys and their clients work with "the other side" and with a variety of professionals, to identify and develop creative solutions to legal disputes. The parties believe that through an integrated collaborative effort "the process can find a third way, a better way than either of the 'ways' of one side or the other."
In 2009, the Uniform Law Commission promulgated the Uniform Collaborative Law Act to standardize the patchwork of rules, statues, and practices that had spread across the country. In 2010, the Commission clarified the Act to acknowledge that collaborative law principles can be enacted by court rule as well as legislative action. Hence the "UCLR/A."
Currently, the UCLR/A has been adopted by 23 states and has been introduced as legislation in Missouri.
Under the UCLR/A, all parties and attorneys enter into a contract, agreeing to work together to develop a settlement that meets all parties' needs. The parties agree to disclose all relevant information and update information promptly, upon discovering previously disclosed information has materially changed. The parties get to decide what "relevant" means, but the process works best with full disclosure An honest, transparent process is more likely to address the true issues. And because parties are more likely to believe an honest process was fair, the resulting settlement is more likely to endure.
The concept of "full disclosure" is a significant departure from litigation. It requires attorneys to "look at legal disputes as common problems to be solved" not as "contests to be won or list." But does the paradigm shift really compromise anything? Truthfully, as a commercial litigator, after months of strategic discovery practice, I find that eventually, all parties have an understanding of the same facts. The collaborative practice cuts to the chase. It requires full disclosure upfront, so the parties know what they're dealing with from the outset.
The parties meet together at a round table in the same room to discuss the problem and brainstorm ideas. The parties do not split into separate rooms to privately discuss strategies to achieve maximum advantage. The process is confidential, and the parties agree the attorneys involved will not take the matter to court under any circumstances, if collaborative efforts fail.
This is not unethical. Contrary to popular belief, attorneys do not have a duty to advocate on behalf of clients, at all costs. Attorneys have a duty to counsel and advise on "moral, economic, social and political factors." They have a duty to honor a client's decision on all settlement offers. The collaborative process shifts an attorney's "duty of advocacy" from maximizing the client's rights and strategic advantage "to listening to what is important to the client and then providing legal advice and assistance to help the client participate directly in the negotiation process."
Skeptics object that collaborative law is a pipe dream. There is no way such a kumbaya concept will ever work in real commercial disputes where the real money is involved. If the parties could sit at a table together to reach an agreement "collaboratively," then they wouldn't have hired an attorney in the first place!
There is some merit to this argument. Certainly, in "bet the company" disputes, where being right and winning is the only way the company survives, collaborative law might not be the answer. But not all commercial disputes are like that. And just because parties have not been able to reach an agreement on their own, doesn't mean they can't.
Consider, for a moment, that some of the most infamous historical disputes are not business related; they're between family - the Hatfields and McCoys; the Caplets and the Montagues.
Collaborative law has worked and continues to work in family law. It has become so successful, in fact, that Wikipedia contributors have declined collaborative law to be a "legal process enabling couples who have decided to separate or end their marriage to work with their collaborative practitioners...." If family members - fighting about the future of their children and dissolving physical abusive relationships - can use the collaborative process successfully, there are no reason business partners fighting about money and power, dissolving businesses and selling real estate, should not be able to do the same.
In fact, rather than being kumbaya, the degree of honesty demanded by the collaborative process means it is not for the faint of heart. Hearing the truth and telling the truth is brutal, and often, painful.
Typically, clients who are willing, or who want, to go through this process are those who (a) want to move fast; (b) want to save money; (c) want to maintain control; (d) do not want public attention on private business; and (e) share something in common with the "other side." Parties who want to save or protect someone, or something, are good candidates for collaborative law. For example, in family law, the parties might want to save or protect their relationship with a child. In business, parties often want the business to survive, even if they don't want to do business together anymore. In real estate, landlords and tenants often don't want the tenant to move out, they just can't continue the way things are. In these circumstances, collaborative law can help.
Don't despair if collaborative law is not for you. You don't have to become a collaborative law practitioner to make a difference. Knowing the collaborative process exists will help attorneys recognize clients who prefer to resolve disputes and move on, rather than litigate them.
Attorneys familiar with collaborative law will also be more effective in mediation. Collaborative practitioners utilize: "Non-adversarial communication (in some literature labeled 'non-violent communication), reflective listening, reframing, summarizing, empathizing, and creative problem-solving" skills - all of which are routinely used in medication. While full disclosure is not required in mediation, an attorney can encourage more fulsome disclosure in mediation and private contemplation of the client's true needs and wants, to help the client and mediator negotiate a settlement that feels like a win-win, rather than a lose-lose.
For the same reasons, mediators can benefit from collaborative law training. The skills are similar, and a mediator can use the in-room, roundtable negotiation process to help move parties away from adversarial postures and toward open communication about shared goals.
The UCLR/A, therefore, provides a host of skills and concepts that could bridge many of the current divides in commercial litigation. The client's desires and lawyers' fighting spirit need not work toward opposite ends. Speedy solutions need not be thwarted by the court's rigid, plodding processes. Mediators need not be stymied by attorneys who mean well but misunderstand their client's goals. Collaborative law is not a panacea. But learning about it can help bridge these divides that are currently (and systematically) keeping our clients from getting back to business.
Column first appeared in the American Bar Association on June 29th.