Successful Mediation Starts With the Right Mediator

It's a sobering thought to begin a mediation process and realize you've already lost. Or that the process may wind up making your dispute more contentious and difficult to resolve than it was before you started. Good mediators rarely let this happen.

Unfortunately, some businesses fail to exercise the same care in selecting a mediator that they do in preparing their case for mediation. The wrong mediator, however, can doom the process to failure and leave the parties even farther apart.

Mediation is the intersection of litigation and negotiation, and as such, it is more art than science. Selecting the right mediator means not only finding someone who is qualified and knowledgeable in the legal issues in dispute, but also someone who has the temperament, business savvy, and proper "fit" for the specific companies involved in the mediation.

What makes a good mediator for your dispute? Here are a few basic principles:

Expertise in a subject matter matters. You don't want to spend your time and money bringing a mediator up to speed on fundamental issues. The right mediator should either bring a substantial knowledge of the legal principles involved in the dispute, or have sufficient experience in a closely related area so that he or she can quickly learn what is needed.

This is particularly true in disputes involving complex legal issues. While many mediators are comfortable with bread-and-butter contract disputes, businesses will want to take considerable care when identifying mediators in, for example, intellectual property or corporate governance disputes, where the subject matter demands a highly specialized background.

Why is this important? Remember, it's not just that you want a mediator who understands the relevant law, but also someone who can use their legal knowledge as leverage to forge a resolution. A lawyer with substantial litigation experience in the area being mediated has credibility when telling the parties how a judge or jury will likely interpret particular facts. That "reality check" from the mediator ("Do you want to risk a ten million-dollar jury verdict?") often helps push reluctant parties toward a settlement. But it carries weight only when the mediator is genuinely expert in the issues.

Business know-how is as important as legal know-how. While legal expertise is essential, it's also important to select a mediator who understands the relevant industry and can appreciate the business impact of the dispute and how it may be resolved.

That means finding someone who is familiar with the industry dynamics (or with a closely comparable industry), understands how deals are done, recognizes the market influences that shape winners and losers in that sector, and appreciates how the players are financed.

This knowledge is part of the mediator's credibility with the parties. But a business-savvy mediator also brings an entirely different level of creativity to the process. Instead of looking at just the legal issues in the dispute, the sophisticated mediator can sometimes help the parties see business possibilities that they might otherwise overlook and find solutions that not only resolve the dispute, but potentially add greater value for both sides. A good mediator won't just divide the pie, but look for ways to increase the pie.

Effective mediators understand the unwritten rules. Successful mediation is as much about psychology as it is about law. You need a mediator who understands the emotional dynamics of the process.

Every dispute has an emotional component, even when large companies are involved in a seemingly "impersonal" battle. In a trade secret dispute, for example, the plaintiff is essentially calling the defendant a thief. In an antitrust dispute, the plaintiff is accusing the defendant of cheating. Most successful, driven executives take those accusations personally.

As a result, parties in a dispute generally enter the mediation process from a position of distrust. Even those that want to find a resolution (and many don't) often assume that the other side comes with sinister motives or unclean hands. Bridging the gap between parties in those circumstances involves a certain "ceremony," a back-and-forth process of proposal and counter-proposal that takes time and diplomacy to play out. A mediator needs the patience to move the parties through this dance and build good faith.

Here, too, credibility is essential. The mediator will generally be party to confidential information on both sides, and each party must believe that the mediator will communicate what they want shared and hold in confidence what they don't want disclosed. They must have faith that the mediator is providing an objective, unbiased perspective, even when the message is something they don't want to hear. This is all part of the psychological rules.

Your goal, after all, is not just a resolution, but a durable resolution that will survive through the closing of the settlement. Many disputes that are "successfully" mediated actually wind up back in litigation to enforce the settlement terms. This is often a failure of the mediator in recognizing what is involved in bringing the parties to a genuine acceptance of the outcome.

You want a deal closer, not just a negotiator. The need to "accept" the outcome means that the mediator must know how to drive the process to closure. Just like some salespeople are known for selling and selling – but never bringing home the deal – mediators must be able to use the back-and-forth process to drive the dispute to a resolution. It means keeping an eye on getting the job done and being results-focused.

The reality is that few parties want to "settle." They want to win. If parties came to the table with an abundance of willingness to compromise and resolve the dispute, they wouldn't need a mediator in the first place. So the role of the mediator is to apply diplomatic pressure to push both sides out of their comfort zones.

It's often said that the definition of a good settlement is mutual dissatisfaction. Part of the mediator's job is often to put the parties in a position where both are unhappy – and each side is convinced that the other side is unhappy, too. That's an art form, but it's also the key to forging lasting settlements.

In most cases the choice of mediator is so important to the outcome that it's often better to delay the mediation than proceed with an unsuitable alternate. That can be an unpalatable choice for businesses anxious to put a dispute behind them and move on. But failed mediation is costly in time and money. Business executives who see the process collapse may be less inclined to invest their energy in other attempts to resolve the dispute peaceably – sending the whole issue to an expensive, risky battle in court.

If you're committed to mediation, take the time and care to get the right mediator - - someone who brings not only the right business and legal experience, but a philosophy and approach that will help you negotiate a lasting agreement.