Use alternative dispute resolutions to keep lawyers at bay: Page 3

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Y2K spawns new $1 trillion industry
As the industry nears the end of the millennium, companies that hired contractors to ready their systems for the year 2000 are getting understandably nervous.

Bower has seen his arbitration clause in action. ZapMe! was unhappy with the work a vendor had performed in creating an end-to-end intranet delivery system, which was supposed to encompass a search engine as well as other Web-enabled functions. ZapMe! claimed the company missed its delivery schedule and didn't complete the work. Because of the ADR clause, both parties were required yo meet with a mutually agreeable mediator in good faith. "It allowed us to bring numerous factual issues to the table in a timely and cost-effective manner," said Bergeson, who represented ZapMe! in the dispute. The two parties ultimately reached a mutually agreeable solution.

"It's very difficult to imagine entrusting the resolution of an important IT-related contract to a judge who doesn't even use e-mail," says GE's Elpidio Villarreal.
"From our perspective, it worked. We were able to get closure on the issue very quickly and move forward," Bower says. "The speed with which the issue was resolved was the key, because the legal issues were clouding the company's judgment and making it difficult to make important strategic business decisions."

Remain flexible

Where to go for help
In addition to the growing number of law firms and specialized ADR practices that focus on technology mediation, here are several resources that can help you navigate the mediation maze:

American Arbitration Association
New York
Not-for-profit service organization dedicated to the resolution of disputes through mediation, arbitration, negotiation, elections, and other voluntary dispute-resolution procedures.

American Bar Association/ Section of Dispute Resolution
Washington, D.C.
Maintains the ABA's role in the dispute-resolution field, providing information and technical assistance to members and the public.

Association of Attorney-Mediators Online
A nonprofit trade association of qualified, independent attorneys and mediators.

CPR Institute for Dispute Resolution
New York City
A not-for-profit alliance of 500 global corporations, leading law firms, and legal academics focusing on alternatives to litigation.

Offices nationwide
Provides ADR services to corporate, government, and individual clients around the world.

Society of Professionals in Dispute Resolution
Washington, D.C.
Professional organization that promotes using alternative dispute resolution.

Source: Datamation
In many cases, however, a company has to be flexible in constructing dispute-resolution clauses. Although GE prefers to insert clauses that stress mediation, Villarreal says the company will change the terms of clause to satisfy contractors. One agreement with an IT vendor, for example, provided for an unusual multistep resolution process. In the event of a dispute, the parties involved would first try to resolve the controversy through mediation. If that failed, the parties would then immediately move to a court venue specified in the contract instead of the intermediate arbitration step.

The agreement was a departure for GE, Villarreal says, but making a concession to the other party in this case made sense. "This was an example that normally would have culminated in binding arbitration, but they wouldn't go for it," he says. "It was a highly individualized and heavily negotiated contract, and it shows that you can't be married to a particular clause."

In some cases, GE executives have even wanted a contractor so much that executives have given in to the contractor's request to eliminate the dispute-resolution clause from the contract altogether. "There are times when we get resistance to this type of clause," Villarreal says. "Some people still operate under the notion that if the other side wants something, there must be something wrong with it. And some people simply prefer the environment of a hometown court." When that happens, "We push as best we can, but we ultimately have to make a decision. Generally, if we want the deal, we don't let the insertion of a mediation clause be a deal-breaker."

Gary Kirstein also has encountered resistance to his standard dispute-resolution clause. Kirstein, president of Softcare Computer Consulting Co. in Pittsburgh, takes an unusual approach. Although his company is the IT contractor, not the hiring organization, Kirstein often presents his customers with the same type of contract--complete with dispute-resolution clause--just to ensure that neither he nor his customers end up in a protracted legal battle.

"We have had companies balk at the clause, and when that happens, we come to some mutual agreement," he says. If the clause is rejected, Kirstein makes sure the company agrees to conduct any necessary litigation in Kirstein's home state of Pennsylvania. "That way, we have more knowledge of the laws. I know we are going to battle on familiar ground in Pennsylvania." //

Karen D. Schwartz is a freelance writer specializing in business and technology. Based in the Washington, D.C. area, she can be reached at karen.schwartz@bigfoot.com.

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