3 Responses to “If Lawyers Dump the Billable Hour, Are Mediators Far Behind?”

1. Marvin Schuldiner | February 25th, 2009 at 12:31 pm
   

   The corporate analog would be “standardized pricing”. Determine what the requirement are then issue a pre-set price/bid. Most businesses then have to align their costs under this pricing structure. The billable hour is a cost-plus model, where the business does not have to manage costs as much as client expectations.

   In the mediation world, it could be like $X for a general divorce mediation, add $Y for each child, add $Z if the couple owns a house, etc. Each additional activity would take an expected amount of time. Like any business, you make money on some and lose on others.

   There is also no reason a hybrid model wouldn’t work. You could use a fixed retainer charge and some sort of bracketed hourly rate (i.e. from 1-3 hours, it’s $X; 3-5 hours $Y, etc.).

   Court rules here in NJ mandate the hourly standard (unless you can get the parties to agree otherwise). I would love to see a departure from the standard hourly model in some way.

   The billable hour is entrenched. Let’s hope this discussion continues and spreads.

2. Colm Brannigan | February 25th, 2009 at 5:04 pm
   

   Another option (in litigated cases) might be to charge a basic half day or day rate significantly lower than your present with a premium for resolution. For example, instead of charging $2k for 1/2 day charge $1,500 but that becomes $3k if you settle.

3. Christopher Annunziata | February 25th, 2009 at 5:27 pm
   

   Doesn’t a “resolution premium” create an ethical dilemma? It gives the neutral a stake in the outcome. The mediator must be able to say, “I have no personal interest in the outcome of this case whatsoever.”

   Won’t parties take the mediator with a grain of salt when they know that he wants the parties to settle so he can put some extra coin to his pocket?