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Shifting Paradigms: The Unauthorized Practice Of Law Or The Authorized Practice Of ADR

 

                     By John W. Cooley

 

                     This article was previously published by the "Dispute

                     Resolution Journal", of the American Arbitraiton

                     Association, August-October 2000.

 

                                                      Forum Discussion

                                                       Brief Comments

 

                     Introduction

 

                     In case you have not noticed, the very foundations of

                     our fledgling ADR profession are under attack. Two

                     states -- Virginia and North Carolina -- have already

                     implemented guidelines defining certain mediator

                     activities to be the practice of law.(1) Bar Associations

                     across the country are uniting in an effort to expand

                     the definition of "the practice of law" to incorporate the

                     broadest scope of human activity possible. The

                     American Bar Association's Ethics 2000 Commission is

                     currently proposing and seeking comments on new rules

                     that directly address the role of the lawyer as a neutral

                     -- as being something distinct and different from the

                     role of the non-lawyer neutral.(2) Paralleling these

                     thrusts is the American Bar Association's internal

                     debate on multi-disciplinary practice of law which

                     ultimately could have a very destructive impact on the

                     multidisciplinary practice of alternative dispute

                     resolution.(3) The purpose of this article is to alert you

                     -- lawyer and non-lawyer ADR professionals -- to these

                     facts and to conscript your involvement in defending

                     against what appears on the horizon to be powerful

                     legions of rulemakers and legislators that threaten to

                     lawyerize and parochialize the practice of alternative

                     dispute resolution. What is happening can best be

                     described as a concerted effort to, in effect, neutralize

                     the neutrals. Although both lawyers and non-lawyers

                     may be casualties of these efforts, non-lawyer neutrals

                     are likely to suffer the most. Unless we act quickly and

                     decisively, we could be picking up the pieces of our ADR

                     profession in a few short years and, in a dazed

                     condition, wondering how it all happened.

 

                     A helpful approach to analyzing the current situation

                     and its impact on the future of the ADR profession

                     would be to ask the questions a child would ask.

                     Applying this Socratic approach, we would be inclined to

                     frame four questions:

 

                     1. What is the Problem?

 

                     2. How do we optimally reframe the Problem?

 

                     3. What are the possible solutions to the reframed

                     problem?

 

                     4. What is the optimal solution to the reframed

                     problem?

 

                     Let's reflect on each of these questions in turn.

 

                     What Is The Problem?

 

                     Having wrestled for the last several years with this

                     question, I have come to the conclusion that some

                     well-intentioned members, and indeed leaders, of the

                     legal profession, the ADR profession, and academia --

                     yes, and even myself -- have defined and have been

                     trying to solve the wrong problem.(4) In short, the

                     problem has been our perception of the problem. We

                     have framed the problem in these terms: what activities

                     of a mediator constitute the practice of law (or the

                     unauthorized practice of law)? For reasons stated later,

                     this question frames the wrong problem. We should be

                     framing the problem in terms of the practice of ADR,

                     rather than in terms of the practice of law or the

                     unauthorized practice of law. One vehicle for

                     understanding the cause of this basic misperception is

                     the set of Guidelines on Mediation and the Unauthorized

                     Practice of Law developed by the Department of Dispute

                     Resolution Services of the Supreme Court of Virginia

                     ("Guidelines" or "Virginia Guidelines"). Another vehicle

                     for understanding the cause of the misperception is the

                     national debate over whether evaluative mediation

                     categorically constitutes the practice of law.

 

                     A. Misperception Spawned by the Virginia

                     Guidelines

 

                     The introduction to the Virginia Guidelines state that

                     "[w]hen ... law-related activities occur during mediation,

                     they may raise ... issues of the unauthorized practice of

                     law (UPL) for non-attorney mediators."(5) The

                     Guidelines go on to state in another section: "The

                     following are the two most common categories of

                     mediator activities that may potentially involve the

                     practice of law: Applying law to facts; Drafting

                     settlement agreements that may be viewed as legal

                     instruments."(6) The disturbing aspect of these

                     statements is their inherent presumption that just

                     because certain mediator activities appear to be

                     activities that lawyers perform on behalf of their clients,

                     they can constitute the practice of law, if engaged in by

                     lawyer-mediators, and the unauthorized practice of law

                     if engaged in by non-lawyer mediators -- vis-a-vis two

                     or more disputing parties. This is a frivolous leap of

                     logic. Where is the representative relationship? Where is

                     the duty of loyalty? What is the fiduciary duty owed by

                     whom and to whom? Where is the understanding of a

                     party that the mediator is protecting that party's

                     interests? How can the mediator receive confidential

                     information from two parties with adverse interests and

                     be practicing law with respect to either of them -- or

                     both of them? How can a mediator accept a service fee

                     from two people with adverse interests, yet be

                     practicing law with respect to both of them? If a lawyer

                     were practicing law in such situation, would not he or

                     she be in a classic conflict of interest situation?

 

                     But more importantly, this extraordinary leap of logic

                     leads to harmful results for mediation practitioners.

                     First, it reduces the practice of mediation to an exercise

                     in semantics. Non-lawyer mediators in Virginia now must

                     carefully craft each phrase they speak, lest they be later

                     accused of "the unauthorized practice of law".(7) This is

                     micro-management of professionals at its worst. For

                     example, the Virginia Guidelines give the following

                     examples of "reality testing questions that raise legal

                     issues" (emphasis added) which: (1) do not constitute

                     the unauthorized practice of law; and (2) probably do

                     constitute the unauthorized practice of law:

 

                     In a divorce mediation held in Virginia, if a non-lawyer

                     mediator were to ask the following questions, he or she

                     would:(8)

 

                      Not Be Engaged in the

                      Unauthorized Practice of

                      Law

                                               Be Engaged in the

                                               Unauthorized Practice of

                                               Law

                      "Have you both considered

                      whether a court would allow

                      Mary to take the children to

                      Florida?"

                                               "Mary, do you realize that the

                                               court that would hear this case

                                               would not allow you to take the

                                               children to Florida over Bill's

                                               objection?"

                      "How would the stock be

                      apportioned under the equitable

                      distribution statute?"

                                               "Bill, have you considered

                                               giving up on the stock issue

                                               since a court probably would

                                               view the asset as separate

                                               property."

 

 

                     In a personal injury case in Virginia, if a mediator were

                     to ask the following questions, he or she would:(9)

 

                      Not Be Engaged in the

                      Unauthorized Practice of

                      Law

                                              Be Engaged in the

                                              Unauthorized Practice of Law

                      "What is the statute of

                      limitations for your claims?"

                                              "Nicole, do you realize that the

                                              two year statute of limitations for

                                              personal injury claims has

                                              expired and that if the statute

                                              was raised by Ken as an

                                              affirmative defense, a court

                                              would dismiss your lawsuit?"

                      "Do either of you know what

                      the Virginia rules are regarding

                      negligence and contributory

                      negligence?"

                                              "Ken, have you considered that

                                              your own contributory

                                              negligence would prevent you

                                              from recovering damages from

                                              Nicole in court?"

 

 

                     The shocking reality, indeed the absurdity, of these

                     examples taken from Virginia's own Guidelines is that, in

                     Virginia, a mediator could be criminally prosecuted for

                     asking any of the four questions in the right-hand

                     column on the ground that he or she committed the

                     crime of practicing law without being authorized or

                     licensed to do so.(10) The folly of such

                     micro-management is apparent. These Virginia

                     Guidelines and others like it if adopted by other States

                     will cause great harm to the ADR profession by muzzling

                     mediators, by discouraging talented non-lawyers from

                     entering the ADR profession, by reducing the mediation

                     process to a mechanical, word-precise, self-conscious,

                     inflexible, content-void exercise.

 

                     The other mediator activities that the Guidelines attempt

                     to brand as the "practice of law" are those relating to

                     the mediator's role in drafting settlement agreements.

                     The Guidelines' drafting instructions are inconsistent

                     and incomprehensible. First they state that the

                     "mediator may take an active role in preparing the

                     agreement for the parties if they want the mediator to

                     perform this function."(11) Then, on the one hand, they

                     say that "a mediator should not add provisions to an

                     agreement beyond those specified by the

                     disputants"(12) while on the other, they state "a

                     mediator may suggest options for the parties to

                     consider when reaching an agreement."(13) The

                     Guidelines also essentially outlaw the use of "boilerplate"

                     provisions in agreements.(14) What if the mediator

                     suggests a boilerplate provision to which the parties

                     agree? Is the mediator engaging in the unauthorized

                     practice of law? The Guidelines' subtle distinctions are

                     impossible to accurately discern and they defy

                     compliance. As one commentator has astutely observed,

                     the "Guidelines set boundaries for mediators that may

                     be difficult, in practice, to enforce. In the subtle and

                     complex interactions of parties and mediator while they

                     are creating a memorandum of agreement, it will often

                     be difficult to discern whether the mediator's

                     involvement has altered or enhanced the parties' own

                     language."(15)

 

                     It must be emphasized that the Virginia Guidelines

                     attempting to define certain aspects of mediation as the

                     practice of law apply to both lawyer and non-lawyer

                     mediators. Thus, these Guidelines will adversely affect

                     the practice of mediation by lawyers both inside and

                     outside the State of Virginia. Because evaluative

                     mediation is considered the practice of law in Virginia,

                     lawyers who are not licensed to practice law in Virginia

                     will be deemed to be engaging in the unauthorized

                     practice of law in Virginia if they are hired to conduct an

                     evaluative mediation there. The Virginia Guidelines and

                     others like them (e.g. those of North Carolina) will

                     operate to parochialize the practice of mediation by

                     lawyers and to interfere significantly with the parties'

                     right to self-determination -- the right to hire the

                     lawyer-mediator of their choice, no matter where the

                     mediator is licensed to practice law.

 

                     B. Misperception Spawned by the National Debate

                     Over Evaluative Mediation

 

                     The national debate around the issue of whether

                     evaluative mediation is the practice of law has also

                     caused us to misperceive the true problem. In an

                     evaluative mediation, in contrast to a facilitative one, the

                     mediator plays an active role in helping the parties to

                     reality test, to accurately assess the strengths and

                     weaknesses of their respective cases, and to predict

                     what a likely result of an adjudication of the matter

                     might be. Often, the parties request the evaluative

                     mediator to provide them with an opinion of the fair

                     settlement value of the case or with a recommended

                     solution. Sometimes this joint request of the parties

                     requires the mediator to take into account, even

                     incidentally, the application of law to certain aspects of

                     the dispute. This activity of applying law to facts,

                     however slight, has sparked the debate over whether

                     evaluative mediation categorically constitutes the

                     practice of law. Those representing "practice of law"

                     viewpoint generally take the stand that when a mediator

                     evaluates the strengths and weakness of a party's case

                     by applying legal principles to specific facts he or she is

                     engaged in the practice of law.(16) They are apparently

                     worried that mediation parties may be injured by

                     reliance on erroneous information given to them by

                     non-lawyer mediators.(17) Those advancing the

                     counterargument urge mediators -- both lawyers and

                     non-lawyers alike -- to actively evaluate the strengths

                     and weaknesses of the disputing parties' cases by

                     applying legal principles to the facts in the

                     mediation.(18)

 

                     The argument holding mediation not to be the "practice

                     of law" is considerably more persuasive for several

                     reasons. First, the act of applying law to specific facts or

                     even giving advice or rendering an opinion that

                     incorporates a consideration of the applicable law does

                     not, in itself, constitute the practice of law. We can

                     point to many examples in society where non-lawyers

                     apply law to a specific factual situation and render

                     opinions and recommendations, yet they are not

                     considered to be practicing law (or engaged in the

                     unauthorized practice of law). Some of these include:

 

                          Jurors in the court system

                          Jurors in a private, simulated jury

                          CPAs and accountants (tax laws)

                          Non-law-trained employees of tax preparing

                          Companies, such as H&R block

                          Real estate appraisers (zoning laws;

                          Environmental laws)

                          Employees of title companies

                          Environmental experts

                          Police officers

                          Employees in every agency of federal and state

                          government (evaluating applications for licenses,

                          governmental benefits, etc.)

 

                     We could think of hundreds of other examples. If these

                     people are not "practicing law" in doing their jobs, why

                     should lawyer or non-lawyer mediators who perform

                     evaluative mediation be deemed to be practicing law?

                     The point where the logic of the "practice of law"

                     proponents fails is in its inability to explain why lawyer

                     or non-lawyer arbitrators do not practice law when they

                     render binding or non-binding awards. Clearly,

                     nonbinding arbitration is very similar to evaluative

                     mediation. Yet, those subscribing to the "practice of

                     law" theory assert that evaluative mediation is the

                     practice of law and nonbinding arbitration is not --

                     though some "practice of law" proponents are now

                     retreating from that position to contend that neutrals in

                     both processes (nonbinding arbitration and evaluative

                     mediation) are engaged in the practice of law. It is only a

                     short step from nonbinding to binding arbitration. Will

                     they next claim that binding arbitration is the practice of

                     law? If they do, they will have disenfranchised a large

                     part of the non-lawyer ADR profession that for decades

                     has performed admirably as arbitrators in numerous

                     types of dispute settings including the areas of

                     employment, construction, environmental, real estate,

                     and securities. Indeed, if members of the "practice of

                     law" contingent take that route, they will be embarking,

                     consciously or unconsciously, in the direction of

                     neutralizing the neutrals. If they do not choose the

                     route of arguing that binding arbitration is the practice

                     of law, then their argument will be hoisted on its own

                     petard. They will not be able to explain, logically, why

                     nonbinding arbitration is the practice of law and why

                     binding arbitration is not.

 

                     While this "practice of law" debate is interesting and

                     engaging, it is simply the wrong debate. We have

                     framed the wrong issue; we have defined (indeed,

                     designed) the wrong problem. The problem is not "what

                     is the practice of law (or the unauthorized practice of

                     law) relative to mediation," but rather "what is the

                     authorized practice of mediation within the larger

                     practice of ADR". We are trying to solve the wrong

                     problem because we are all inside a major paradigm shift

                     in society and have not stepped back far enough to see

                     the outer boundaries of the new paradigm. We are

                     trying to apply the template with which we are familiar --

                     the practice of law template -- to an evolving profession

                     -- the ADR profession -- whose ultimate boundaries are

                     still vague, whose characteristics seem, in part, similar

                     to the practice of law, but whose essence is distinctly

                     and wholly different. Figure 1 below illustrates this

                     perceptual problem.(19) Let us assume that we are

                     shown only the top drawing in the vertical column below

                     and asked: What computer keyboard symbol is being

                     masked by the rectangle? 

 

                     Figure 1

 

                     Most people would visualize a capital "B" and give that

                     as their answer (as shown in the middle drawing),

                     perhaps because the right side of the rectangle

                     suggests the vertical part of the letter capital "B".

                     People are quick to apply a familiar template in solving

                     problems. The correct answer, however, -- the number

                     "8" -- would be misperceived. The top rectangle actually

                     masks a symbol whose ultimate boundaries are vague,

                     whose characteristics seem, in part, similar to a B, but

                     whose essence, when fully exposed, is distinctly and

                     wholly different from a capital "B". The same is true of

                     the practice of law and the practice of ADR. Currently,

                     when we look at our ADR profession, parts of it appear

                     to be the practice of law ("B"), when in fact the ADR

                     profession consists of something entirely different --

                     the practice of ADR ("8").

 

                     Thus, the challenge is to reframe the problem as

                     presented. If we want to optimally reframe the problem,

                     we must be willing to see and to appreciate a new

                     paradigm. But first we need to understand the basic

                     phenomenon of paradigms and paradigm shifts.

 

                     How Do We Optimally Reframe The Problem?