Dispute Settlement Counsel

Today, many people try to save time and money by using templates and programs available on line or in bookstores to draft their own legal documents. There are some good products out there and some language is pretty much boilerplate.

But not all of it. The devil is in the details, it’s often said. The problem with using already prepared contracts and agreements is that no two situations are alike. Templates designed for general use could not possibly know the specific circumstances of your situation and the specific purposes for your agreement or contract.

The word processing of a contract is a very small part of the service provided and the value added of a lawyer’s work. The larger parts are knowing the client well, caring about the little things in the client’s circumstances, and advising the client on the best ways of dealing with these unique situations: The nature of relationship between our clients and those they do business with, the specific details of his organization or her business, the information and idiosyncrasies that are unique to this situation and the particular relationship that the agreement addresses. The vital purpose fulfilled by having your lawyer draft, fine tune and negotiate the contract is to consider all these specific details and make sure they are addressed.

A lawyer who counsels on and drafts agreements is a conflict resolution advocate. The lawyer is called upon to anticipate situations that may arise in the future of the relationship between the parties, and efficiently address those situations in advance in the contract. A boilerplate agreement downloaded from some general program or software can’t possibly fulfill this function. This is where the real advocacy and representation lives; where an attorney proves his or her real worth to the client. We need to provide good answers in the contract to this question: What if this happens?   

One valuable tool for answering this question is the dispute resolution clause (“DRC”), which should be included in partnership, employment or severance agreements, licensing or other business agreements, contracts between businesses and independent contractors, etc. The DRC tackles the issue of what happens if a dispute arises, and sets forth an agreed-upon process for dealing with the dispute. It allows the parties to decide, while they are enjoying a healthy, productive relationship that is focused on the future, how they want to handle the dispute if it happens. (This is usually the time that parties are telling their lawyers they get along great, have a very close relationship and that a dispute will never happen.) It is a much better time to talk about how they will solve problems than when the dispute has escalated, the clients are staking out positions and looking backwards to assess fault. 

Experience is one of the lawyer’s greatest teachers and assets. While we acknowledge, commend and encourage the good relationship, we also needs to stress that one critical purpose of the contract is to do everything it can to keep that relationship healthy, especially when it’s going through a dispute. The purpose of a DRC is to pre-determine, while parties are cool and calm, what the rules of engagement should be if they are needed.

There’s another important purpose served in including DRCs in contracts and agreements. It gives the lawyer the opportunity (which is actually our ethical obligation) to educate the client on what options for dispute resolution are available and how they work, so that the clients can make well-informed decision on the process they will utilize for managing and resolving their dispute.

Some contracts include a binding arbitration clause, which states that if there is a dispute the parties must utilize binding arbitration. One problem with that is that it may not be the best method of resolving their dispute. Another is that most parties don’t realize what they are agreeing to and what rights they are giving up when they sign the contract with that clause, unless their lawyer has advised them on all the ADR options that exist. (These options are described in more detail in the “Our Services” pages of this website, www.zeytooniancenter.com.)

All contracts and agreements should include a DRC. And clients should not be signing a contract with an arbitration clause, or with any DRC in it, until they have first been educated on what mediation, collaborative law, case evaluation, arbitration and litigation are, how they would work and why one would be more appropriate than another. This is a key role in which a lawyer provides great value to his or her client, a value that canned agreements cannot possibly provide.