Decision Vision Episode 105: Should I Enter Into Mediation to Resolve a Dispute? – An Interview with Ellen Malow, Malow Mediation and Arbitration
Ellen Malow of Malow Mediation and Arbitration joins host Mike Blake to discuss how mediation and arbitration can be used to resolve business disputes. “Decision Vision” is presented by Brady Ware & Company.
Ellen Malow, President, Malow Mediation and Arbitration
Malow Mediation is an alternative dispute resolution company that assists companies and individuals in resolving conflicts. A wide range of cases is handled including complex business, employment, construction, personal injury, and other areas of the law. Arbitration matters are also handled where Ellen serves as the judge on similar matters.
Mike Blake, Brady Ware & Company
Michael Blake is the host of the “Decision Vision” podcast series and a Director of Brady Ware & Company. Mike specializes in the valuation of intellectual property-driven firms, such as software firms, aerospace firms, and professional services firms, most frequently in the capacity as a transaction advisor, helping clients obtain great outcomes from complex transaction opportunities. He is also a specialist in the appraisal of intellectual properties as stand-alone assets, such as software, trade secrets, and patents.
Mike has been a full-time business appraiser for 13 years with public accounting firms, boutique business appraisal firms, and an owner of his own firm. Prior to that, he spent 8 years in venture capital and investment banking, including transactions in the U.S., Israel, Russia, Ukraine, and Belarus.
Brady Ware & Company
Brady Ware & Company is a regional full-service accounting and advisory firm which helps businesses and entrepreneurs make visions a reality. Brady Ware services clients nationally from its offices in Alpharetta, GA; Columbus and Dayton, OH; and Richmond, IN. The firm is growth-minded, committed to the regions in which they operate, and most importantly, they make significant investments in their people and service offerings to meet the changing financial needs of those they are privileged to serve. The firm is dedicated to providing results that make a difference for its clients.
Decision Vision Podcast Series
“Decision Vision” is a podcast covering topics and issues facing small business owners and connecting them with solutions from leading experts. This series is presented by Brady Ware & Company. If you are a decision-maker for a small business, we’d love to hear from you. Contact us at firstname.lastname@example.org and make sure to listen to every Thursday to the “Decision Vision” podcast.
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Intro: [00:00:01] Welcome to Decision Vision, a podcast series focusing on critical business decisions. Brought to you by Brady Ware & Company. Brady Ware is a regional, full service accounting and advisory firm that helps businesses and entrepreneurs make visions a reality.
Mike Blake: [00:00:20] Welcome to Decision Vision, a podcast giving you, the listener, clear vision to make great decisions. In each episode, we discuss the process of decision making on a different topic from the business owners’ or executives’ perspective. We aren’t necessarily telling you what to do, but we can put you in a position to make an informed decision on your own and understand when you might need help along the way.
Mike Blake: [00:00:41] My name is Mike Blake, and I’m your host for today’s program. I’m a director at Brady Ware & Company, a full-service accounting firm based in Dayton, Ohio, with offices in Dayton; Columbus, Ohio; Richmond, Indiana; and Alpharetta, Georgia. Brady Ware is sponsoring this podcast, which is being recorded in Atlanta per social distancing protocols. If you like this podcast, please subscribe on your favorite podcast aggregator, and please consider leaving a review of the podcast as well.
Mike Blake: [00:01:07] Today’s topic is, Should I enter into mediation? And, you know, this is a really interesting topic to me from a dispute resolution perspective, because, as we’re going to learn, it has a lot of layers to it. And as we record this podcast on February 9th, 2021, we’re still in the midst of this whole pandemic thing. And only a small fraction of us have been vaccinated. I have not because I’m too young. And at my age, it’s nice actually still to fall into a category where I’m too young for something. That does not happen often anymore. So, I’m going to take that as a silver lining.
Mike Blake: [00:01:48] But, you know, in this time, we’re in a period right now where if you’re in a legal dispute, it is difficult to get on a court calendar. And we had, very early on in the podcast, a couple of folks come on and talk about, you know, should I sue, how do I make a decision to sue somebody, and so forth. But a lot of that is now kind of warped. A lot of those, at least, advice kind of warped because, you know, the courts are not functioning the same way that they did. In some cases they’re not functioning at all. Can you imagine in a time of COVID, and now we have more virulent strains that have been unleashed upon us, you know, how do you sit 12 jurors for a multiday case and not, like, kill two of them, basically? It’s nearly impossible.
Mike Blake: [00:02:46] So, you know, I think alternative dispute resolution avenues, such as arbitration and mediation, and there may be others as well – hopefully, not dueling pistols at dawn. I like to think that one out with the 19th century – these methods, I think, they have to receive more attention than they once did. Maybe they’re being revisited by parties that had once rejected them, because, otherwise, frankly, you might be stuck in the mud. I’ve got a client that on the one hand, I think, is desperate to sue somebody. But on the other hand, you’re looking at a two to three year period before you’re going to get in front of a judge, if that. And that’s assuming no continuances and so forth.
Mike Blake: [00:03:35] So, I think there should be a lot more interest in this topic, and I think that there will be. And so, helping us out today as an expert is Ellen Malow, who is the President of Malow Mediation and Arbitration. She is a former trial attorney who practiced law for 13 years. She started her company 17 years ago and has been a full-time mediator and arbitrator since that time. She received her undergraduate and law degree from the University of Texas at Austin. She’s a member of several professional organizations. She has had numerous speaking engagements for many law firms and other groups. She has also authored several articles and serves as an arbitrator on certain matters. Malow Mediation is an alternative dispute resolution company that assists companies and individuals in resolving conflicts. A wide range of cases are handled, including the complex business – I’m sorry – complex business, employment, construction, personal injury, and other areas of law. Ellen Malow, welcome to the program.
Ellen Malow: [00:04:39] Thanks, Mike. I had myself on mute so as not to interfere with you.
Mike Blake: [00:04:44] Well, that’s all right. You know what? We’re just going to call that a dramatic pause and then move on from there. So, Ellen, thanks again for coming on the show. Great to see you. It’s been a long time. With the show, I like to start to make sure everybody understands kind of what we’re talking about. What is a mediation?
Ellen Malow: [00:05:07] A mediation is basically a facilitated negotiation where the mediator works with the parties to try to come up with some sort of solution to their issues. It basically comes up with ways to look at it that they may not have considered before.
Mike Blake: [00:05:24] And what does that process look like? If we’re considering mediation or maybe you’re consulting with somebody and they just want to know kind of what that process looks like, what is that?
Ellen Malow: [00:05:39] So, the format is awhat we call a general [indiscernible] where we all meet together and the mediator goes over the mediation agreement. And, really, the key thing there is confidentiality. And then, each lawyer on each side has the opportunity to give, basically, an opening statement. And if they want, their client can make comments as well. And then, I separate them and they have a caucus room. And then, my role is to go in between the caucus rooms for the whole process and try to get to a deal. So, there’s some fluidity to the process. So, sometimes I may take one of the lawyers aside away from his or her client and try to say, “Hey, what’s the roadblock here?” And maybe we can break through it. Sometimes I take all the lawyers in a separate caucus room. Sometimes we come back together. But as a practical matter, it’s really the way I describe it to begin with.
Mike Blake: [00:06:35] So, I’ve never been in a mediation, candidly. I’ve been in arbitration. I’ve been in trial. But it’s interesting, you know, this facilitated negotiation, it sounds like you start with a position of keeping the parties physically separate, is that accurate?
Ellen Malow: [00:06:53] So, there’s some controversy now as to if it makes more sense to start out separate. I think starting out together makes more sense. And sometimes when you’re mediating, you haven’t even met the other side, sometimes you haven’t even met your opposing counsel. You may be early on. So, it’s an opportunity to set the stage for that conversation.
Ellen Malow: [00:07:17] Some people, if it’s a highly contentious – like I have one on Friday, it’s a non-compete, non-solicit case where they’re accusing the former employee of stealing documents. They don’t want to be in the same room together. So, we will start out separately.
Mike Blake: [00:07:33] So, I guess some of that is reading the room, for lack of a better term. I guess you have to have some feeling as to how hostile, maybe even how emotional, the parties are and whether or not being in the room can be constructive or destructive.
Ellen Malow: [00:07:51] Exactly. The thing I try to do is talk to the lawyers in advance to find out what the dynamics are with their clients, with opposing counsel, with the opposing party. But like I mentioned, people want to skip this part completely. And when you’re trained in the process, it is a critical part, so I will encourage them. I mean, unless we’re talking about a sexual assault case or something that’s so outrageously emotional, I just think it makes sense to meet the other side, set the stage, let them hear your position without going into a full blown opening argument. Because if you skip it, you’re already polarized.
Mike Blake: [00:08:30] You know, I’m going to go off script here, but it reminds me of a practice that the litigation section of the Atlanta bar used to encourage, which was, take your opposing counsel out to lunch. And I’m not an expert. I’m a lousy expert witness, that was why I don’t do it. But I always thought that that practice, I think, is just constructive. You know, if you just get people talking and if you get two attorneys who are truly interested in resolving a dispute, you know, magical things can happen if you take them out of having the spotlight on them and the pressure of “performing” in front of their client in a certain way. You just let them kind of do their thing. Good things, I think, can happen from that.
Ellen Malow: [00:09:23] I totally agree. And I actually use that same example when I give speeches to law firms. I mean, that’s it. Like, you don’t have to be adversaries. You do have to be an advocate for your client. But it doesn’t have to be this butting heads scenario. It’s challenging because there’s that fine line between zealous advocacy and trying to come up with a compromise.
Mike Blake: [00:09:45] Yeah, for sure. So, you mentioned lawyers being in the room, but I wanted to clarify something because it’s an important point that I think is often overlooked, you don’t necessarily need to have legal counsel representing you in a mediation, do you?
Ellen Malow: [00:10:02] No. I mean, you can have a mediation before you even have a lawsuit. I’ve done some with a shopping center dispute where you’ve got kind of an urgent issue, where a landlord is trying to get a tenant out or whatever that might be, and so they can meet with a mediator without counsel. The challenge is sometimes you’ll have one side with counsel and the other side without and they feel like it’s not an even playing field. But I’ve definitely done cases with business people. I’ve actually done even divorce cases where the husband and wife don’t want to pay for lawyers. So, you can definitely do it.
Mike Blake: [00:10:37] That instance where one side brings legal counsel, the other side does not, that’s got to make it tricky, too, because of bar ethics rules, I would imagine, right? I mean, not that I’m a lawyer, but I work with them enough, you know, attorneys don’t necessarily like kind of going lawyer to layperson in a legal conversation, right?
Ellen Malow: [00:10:57] True. And I also don’t like to be put on the spot to be their lawyer because I am a lawyer. But my role as a neutral is to be just that. So, it’s difficult because they’ll lean on you to give some opinion or advice and you have to really be careful not to cross that line.
Mike Blake: [00:11:16] So, another alternative dispute resolution mechanic, arbitration, is often kind of set in the same breadth as mediation. If I’m not mistaken, I think you’re also a qualified arbitrator – and correct me if I’m wrong. What is the difference between those two? Or rhat are the differences? There’s probably not just one difference.
Ellen Malow: [00:11:36] Right. So, arbitration, as an arbitrator, I’m a judge. So, when people say arbitration, they don’t really necessarily understand that it’s the exact same thing as if you filed a case in State Court or Superior Court. So, I’m sitting in the role of a judge. I’m just not getting paid by the government, by the taxpayers. I’m privately being paid. And there are a lot of reasons why people want to select arbitration. Most of the time you’ll see, it’s in a lot of contracts between parties. If it’s a business dispute, it’ll say in the event of a dispute, this is what we’re doing. So, as the arbitrator, I’m making a ruling. Whereas, as a mediator, I’m trying to bring the parties to their own agreement. I can’t force an agreement on them as a mediator. But as an arbitrator, there’s evidence, it’s a trial, it’s a full blown deal.
Ellen Malow: [00:12:28] The difference between arbitration and a trial – the main difference is, an arbitration is totally confidential. So, if there’s a bad decision or good decision, whatever, it’s not public. And the other thing is, it’s binding and you can’t appeal it. So, if you think about trials that you hear about, they could go on forever because you could get a great result, and then the other side appeals it. Now, we’re two or three years later, then it’s kicked back for new trial, whatever happens. So, it’s much more streamlined. It takes way less time. There is a cost, too, because you’re paying this private arbitrator.
Ellen Malow: [00:13:05] And the other thing, Mike, that I think is the reason people really like it is, you can get an arbitrator that has subject matter expertise. Because you could go try a case and you might have a judge that’s well versed in criminal law but doesn’t really know much about this business dispute. So, it has a lot, a lot of advantages. People don’t like it because you could get stuck with a bad decision. It’s not a jury. So, there are downsides to it.
Mike Blake: [00:13:36] Now, my understanding is that you don’t necessarily need to have legal training to become a mediator or an arbitrator. Is that correct?
Ellen Malow: [00:13:46] It is. I mean, I have some certifications. But I think a lot of successful mediators and arbitrators have subject matter expertise and that is what enables them to get a lot of business.
Mike Blake: [00:13:59] Now, I’ve been in arbitrations where there have been multiple arbitrators, does that happen in mediation as well? Or is it typically just one mediator that’s running the show?
Ellen Malow: [00:14:10] In 30 years of both practice and mediation, I’ve only had one case that we had co- mediators, and it was a huge, massive, toxic tort case with thousands of plaintiffs. So, it’s rare. At least I have not experienced it. It may be nice because it’d be great to bounce something off of someone, but you just don’t have that luxury.
Mike Blake: [00:14:34] Interesting. So, when do most parties go to mediation? And then, I have sort of a twin question with that, when should they go to mediation? In other words, do people tend to go too early, too late? How do most people do it? And then, what would you recommend?
Ellen Malow: [00:15:00] Can I back up one step to the arbitration?
Mike Blake: [00:15:03] Please.
Ellen Malow: [00:15:03] Okay. The only thing I want to say is, so you can have either a three-person panel or a sole arbitrator, and there’s a benefit to each. The benefit to a three-person panel is that, you’re not stuck with one person’s decision. There has to be a consensus. Usually with an arbitration with a three-person panel, each sides picking one, so they’re sort of in their camp, potentially. And then, those two are picking the third one. So, that person may actually be a little bit more neutral. So, the sole arbitrator, you could have that risk of just that one person’s opinion not being the way you want to be.
Ellen Malow: [00:15:40] Okay. So, timing, that does have some layers to it. So, I would say more and more I’m doing what we call pre-suit mediations, where they haven’t even filed a lawsuit. I think the earlier the better. Because what happens is, the further along in the process, the more invested people become and the sunk costs are already there. And it becomes less likely for them to just say, “Okay. Let’s resolve it.” They’re so far down the road, they think, “Well, let’s just go ahead and try it.”
Ellen Malow: [00:16:11] So, at the outset, you don’t have all that yet. You haven’t spent the money on attorneys fees and court reporters and all that stuff. The downside of too, too early is you may not have all the information. So, I do a lot of employment cases, typically the employer has everything or most everything and the employee may have next to nothing. So, in that instance, it might be too early to do a pre-suit. But sometimes they still work there, so you’re trying to figure out almost a severance and it makes sense to try to mediate it early. So, I think probably, maybe, the best stages are right after they’ve exchanged documents – what we call written discovery – and before you get into depositions, because that’s when the expense really happens.
Mike Blake: [00:16:56] And I wonder, too, I mean, it’s not just the expense, but I wonder if kind of the longer you’re locked in battle, the more you emotionally invest in the notion of a victory, in particular an unconditional victory. And, you know, that may be achievable, but it’s typically difficult to achieve. Because if you’re trying to achieve unconditional surrender, then the party on the other side is going to fight like counsel. They have no other alternative to avoid that because there’s no upside to surrendering early. So, interestingly, somebody is going to do that.
Mike Blake: [00:17:34] Now, what about your cases where, you know, lawsuits have been filed. You’ve gotten through the discovery phase and you’re getting to the point now where the judge is now starting to get involved. It’s probably still pretrial, but you’re talking to the judge or filing motions more and more frequently. My understanding is, judges will often send cases into mediation in some fashion. Is that your experience as well? And why do they do that?
Ellen Malow: [00:18:06] Well, typically, at some point they’re going to order you to mediation. If they don’t order you, one side is going to ask the judge to order you. And the main reason they do it is because they’re flooded with cases, and now more so than ever. So, they’re trying to avoid – you know, I don’t mean wasting resources – using resources that will be taken up, whether it’s the time of the jurors or the time of the court.
Ellen Malow: [00:18:29] And I would also say, probably, 95 percent of all cases settle. It doesn’t seem that way because the papers or the news or social media will show things that are outrageous and happening as if it happens all the time. So, if it’s going to settle, their thought process is “Let’s get it settled”. So, I do know there are a couple of counties where I’m on the roster and I’ll hear the lawyers say, “We’re too early. This judge ordered us to mediation. We haven’t done X, Y and Z. This isn’t the best time to mediate.” So, some of those may not be as successful, but the courts want these off their dockets. And like you said at the beginning, with COVID, they are buried.
Mike Blake: [00:19:10] So, a mediation, to me, sounds like a complex animal because, as opposed to a trial or an arbitration, which is a trial that’s privately held, there’s no guarantee of an outcome in a mediation, is there?
Ellen Malow: [00:19:30] Well, no. The parties can decide to settle or not settle.
Mike Blake: [00:19:33] Yeah. Exactly. So, I think that’s an interesting distinction. And so, I have to imagine you see this a lot, but I don’t want to put words in your mouth. I mean, do you see parties that, you know, maybe are being ordered into time out, they’re being ordered to mediation, maybe, frankly, very much against their will. Even in that case, is there something constructive that can come out of a mediation that doesn’t have a resolution?
Ellen Malow: [00:20:01] So, I think a couple things can come out. One is just information, sharing things that may not have been disclosed yet that ultimately have to be disclosed. The other thing I think is beneficial is to have a neutral person give their impressions on the strengths and weaknesses of the case, because you’re now hearing from someone who has no investment in the case what they think could happen. I mean, my decisions is not binding, their opinions aren’t binding like they are as an arbitrator, but I think they’re informative. So, you know, you can also start engaging in negotiations that maybe you haven’t started and get the momentum going. So, even though that may not be the day it settles, it could resolve sooner than later.
Mike Blake: [00:20:49] Yeah. And, you know, the part you brought up about getting sort of what seems to be a sneak preview of how an independent legal expert kind of evaluates the case for both sides. You know, that seems to me to be extremely valuable so that it can inform kind of both parties, “Look, if you do kind of press this into the next step, you may be a favorite or you might be an underdog.” And I have to imagine that’s very important information.
Ellen Malow: [00:21:22] I think, so the challenge with the court ordered ones, like you said, Mike, is sometimes they’re closed minded just checking a box. I had one recently that was court ordered – so, there’s two different types of mediation styles. One is facilitative and one’s evaluative. And I’m more evaluative, so I’m not just shoveling numbers. Well, that lawyer on that case who was ordered to be there, her thing was, “Well, what’s her number?” “Well, don’t you want to hear anything else besides their number?” And she was just walled off.
Ellen Malow: [00:21:56] Courts say that when you mediate under a court order, you need to be there in good faith. You need to have all the people that are the decision makers. And you need to be there with an open mind, willing to listen. So, when you have someone who’s not doing that, I can’t be subpoenaed to testify, that’s one of the protections I have. So, I’m not going to go to the court and say, “This lawyer did X, Y and Z.” So, it’s a little challenging because then it means the other lawyer has to go complain to the judge.
Mike Blake: [00:22:25] So, I want to ask about that good faith part, because it strikes me that when you’re a mediator, you’re also part kind of therapist or counselor, I would imagine, right? There’s got to be some overlap there. And I kind of wonder how often do you encounter it, where the the party’s goal of the mediation is to, basically, show the other party just how wrong they’ve been the whole time, and that’s their primary goal. And if you see that often, in your mind, does that constitute bad faith? And if there’s bad faith – I know this is a long question – is there any recourse to take if somebody has kind of put you through the motions of mediation when there’s really no intent to even attempt to have a useful outcome?
Ellen Malow: [00:23:18] Well, I think the very last part ties into what I said, that probably the only recourse is to go back to the court. And what is the court going to do? The court may assess attorney’s fees. “Listen, you showed up, the other side had to show up. They spent X amount getting ready and attending.” So, it’s just a weird scenario because you’re typically going to come up against the same lawyers over and over and it’s a small community, even though we’re in Atlanta.
Ellen Malow: [00:23:44] The part about the emotions, it’s interesting because I do so many different areas, you would think the emotions would be in a personal injury case or a divorce case. I’ve had some nasty business disputes, where what I get throughout the process is it’s the principle of it. It’s right or wrong. I’m going to teach them a lesson. And so, I get so much emotion. I mean, construction cases, you’re criticizing the other side’s work. Employment cases, someone has worked there for 20 years and now they’re out on the street. So, the the level of emotion and sort of the therapist role, I think it’s there in all types of disputes.
Mike Blake: [00:24:24] So, does your training as a mediator include having to address those emotions to try to de-escalate a scenario? Or is that outside of your purview?
Ellen Malow: [00:24:37] So, I’m a psychology major, so I feel that helps me be a good mediator. One of the things they do teach you in training is about listening. So, so much is letting them vent and tell their story. And you’ll see the shift during the mediation, at some point during the day, they start letting that go enough to start considering a deal.
Mike Blake: [00:24:59] You talked about, you know, being qualified and your training and so forth, what is a typical or, even, is there a standardized qualification set or certification to become a mediator? Do you have to be licensed? Can anyone hang up their shingle and do it? What does that process look like?
Ellen Malow: [00:25:22] So, in Georgia, there is a Georgia Office of Dispute Resolution. And in order to get certified by the State, you have to have this coursework and get a certain number of hours. And what that entitles you to is the ability to be on court rosters. So, I’m on the Gwinnett Roster, the Cobb Roster. I had been on Fulton, but they don’t really pay anything, so I got off of that one. So, if I were not certified by the Georgia Office of Dispute Resolution, I could not be on those rosters. I could still be what we call a private mediator. So, there are mediators that have probably never taken training, but they’ve done a thousand mediations as an advocate.
Mike Blake: [00:26:01] So, you said something that was interesting I did not know. When you’re a mediator or, I guess, you’re a court appointed mediator, is it the court that pays your fee?
Ellen Malow: [00:26:11] Yes. It’s the county.
Mike Blake: [00:26:13] Interesting. I didn’t know that.
Ellen Malow: [00:26:14] Wait a minute. Sorry. That’s not the case in every county. So, on the counties I am on the roster, the parties are paying it. But like Fulton County, it’s a flat fee and the county pays it. It’s a free program, and Cobb is the same way. So, it is county to county.
Mike Blake: [00:26:36] Got it. Okay. So, in your particular case, what kind of certifications do you have to be a mediator? And what does that entail in terms of coursework, exams, continuing education, that sort of thing?
Ellen Malow: [00:26:52] So, when I started 17 years ago, what I was required to do is a 25 hour – what we call – civil training. I did a 40 hour domestic training and I did a six hour arbitration training, which is so bizarre to me because being an arbitrator is far harder than being a mediator. Anyway – and then I did some advanced training at the Pepperdine Institute – Pepperdine University Straus Institute many years ago. So, I have those certifications but, like I said, even if I didn’t re-up it, I could still mediate.
Mike Blake: [00:27:28] Sure. So, you talked about there are people that are subject matter experts, and I guess that ranges from the nature of the law, whether it’s family law or employment law, elder law, civil business disputes. Does it also help or should it matter if there’s a subject matter expert that maybe is a field expert? For example, if it’s a financial dispute, if somebody has a financial background, or if it involves fraud, somebody with forensic background, or if it involves some sort of engineering case, you should want an engineer. Does that factor into how a mediator is chosen and should it?
Ellen Malow: [00:28:11] I think it does and I think it should. What’s interesting is, you know, because I think you do a lot of expert witness work is, a lot of times you’ve already retained an expert who’s either issued a report or given a deposition. So, the lawyers have the benefit of that testimony or that expertise, so they’re not necessarily needed in their mediators. So, from my perspective, the benefit of a mediator is to look at risks and weaknesses, and why negotiation and settlement makes sense. And whenever you do that, I can do that analysis on any type of case. Now, certainly it helps if I can say I tried complex business cases, but I don’t have to be an expert-expert. I will say the one area I don’t do because I have no expertise is intellectual property. And I do think you’d want a mediator with that expertise because it really is very nuanced.
Mike Blake: [00:29:10] Well, yeah, I think that’s important. And, you know, in my practice, there are certain things that I don’t take on. You know, unless it’s really simple, I don’t take on health care, I don’t do extractive materials like mining rights or forestry rights. Those are such different animals that I’m like, “Man, I could do this but I’d probably do it badly. So, here’s three other people that actually know what they’re doing.”
Mike Blake: [00:29:32] As a mediator, I’m curious, can you call on outside resources as you’re mediating a case? Could you, in effect, phone a friend if you had a question? Or are you allowed to kind of Google things and look things up so you can mediate a case from a more informed perspective? Or are you limited to whatever is kind of contained within the the four physical walls of the mediation exercise?
Mike Blake: [00:29:59] I will say that one of the things I’ll do is research some laws. So, you say to me, “Here’s the case on point. This completely proves our position.” And while you’re then kicking me out of the room or when I’m doing something else or I’ve got a minute, I’ll pull up a case or I’ll look at the case they gave me or some statute. So, there are things like that. I can’t really phone a friend – I wish I could – because it’s all confidential. So, if I were to phone a friend, I would have to be really, really broad and not say anything that would reveal anything confidential.
Mike Blake: [00:30:33] Right. So, can a mediation process – I think I know the answer to this, but I want to make sure because I don’t want to assume. But can a mediation process impact – assuming that it fails to achieve a resolution – in any way a subsequent arbitration or trial?
Ellen Malow: [00:30:56] Well, I mean, it impacts if it settles, right? Because the others go away. If it doesn’t settle it, it shouldn’t because everything discussed in the mediation is confidential. So, it should protect, for example, the judge or the jury from knowing anything other than the judge would know it didn’t settle. And this may or may not go directly to your question, but I think it can impact the case. One thing that people say is, you can set a floor and a ceiling for future negotiations and so it could impact the ability to get it settled. I think, also, the other way could impact the ability to open up further discussions. But I don’t think it really impacts the trial or the arbitration other than, I mean, because of the confidentiality.
Mike Blake: [00:31:49] Right. So, one thing that you and I have in common is, I do find myself in an informal mediation of disputes, typically when there’s a buy-sell or some kind of built in dispute resolution, a shareholders, or an operating agreement where, you know, there’s a dueling appraiser issue. Two appraisers are going to do their own appraisals, the third is then going to decide which of the two they like more, that sort of thing. So, it’s a quasi mediation thing, which I enjoy. And in that scenario, one of the stickiest parts is, who do you pick to actually do that? Aside from a court appointed mediation where the parties don’t have a choice, presumably, or limited choice, how do parties come to pick you? And how do you convince them that, you know, you’re basically not working for the other side?
Ellen Malow: [00:32:49] Well, it’s interesting because some lawyers have the view that they just want the other lawyer to pick. And the reason they want that is because they think if the other side picks, that side is going to listen to what the mediator says when the mediator comes down hard on them. Typically, what will happen is, both sides have to agree to the mediator. And so, you would propose three names. I would propose three names. And then, someone in those list is going to overlap and that becomes our mediator, so it’s kind of like picking a jury. It’s a process of elimination, not selection. But at this stage in my career, after 17 years, people know me, you know, they’re going to say, “Oh, yeah. We used Ellen. We’re good with her.” And it goes back to the subject matter expertise because there are certain mediators that do employment law like I do. And then, there are others that do domestic. And you’re not going to pick a domestic mediator.
Mike Blake: [00:33:46] Does the timeline for mediation differ from the timeline for an arbitration or trial? I mean, for most matters it’s rare to see a trial last for more than a couple of days. It’s not like a murder trial. But you’re not going to mediate a murder matter. So, I’m curious, you know, do mediation’s last roughly as long, longer, or less long? What does that look like?
Ellen Malow: [00:34:13] So, most mediations are only one day. It’s rare to have a mediation that’s longer than a day. I will say that I recently did a case with three separate plaintiffs and we lined them up to have one at 9:00, and one at 12:00, and one at 3:00. And we were very unrealistic because the first one lasted 13 hours. So, in that instance, we’re really mediating three cases, but they arose out of the same facts. But, typically, it’s just a day. Like, a business dispute, it’s probably just a day.
Mike Blake: [00:34:43] I mean, that has to be so exhausting to do a mediation. I mean, I’m thinking about 13 hours, 13 hours doing anything is a long time. But the mental energy that is required to be spent, not just for the mechanics of the mediation of the case, but managing the emotions involved. After one of these things completes, I mean, you got to be ready for bed, I’m imagining.
Ellen Malow: [00:35:12] It is very draining. And a lot of it is because of the emotions. And it’s not necessarily just the party’s emotions, but it could be the lawyer’s emotions. So, I might be getting it from every direction. I’d like to think I’ve learned not to absorb other people’s emotions in that setting. I mean, obviously, in real life, it’s hard not to absorb someone’s emotions. But it’s tough. I mean, I think it’s very draining. But I like it. I love it. It’s fun.
Mike Blake: [00:35:43] Yeah. Well, you obviously do. You’re doing it for a long time and been successful. We’re talking with Ellen Malow of Malow Mediation. And the topic is, Should I enter a mediation? Let me switch gears here, are there scenarios under which mediation is not a good idea? Are there conditions where, you know, you just look at the matter, you look at the parties, you look at something and say, “You know what? I would love to help you, but this probably isn’t going to work the way that you like. And this may not be a good use of your time and fees.”
Ellen Malow: [00:36:17] Well, I always think it’s a good idea. There’s no instance where I don’t. But the the knock on it that I hear is, “We’re, potentially, too early. We need more information. We don’t want to show our cards. We don’t have to show our cards.” Like, there’s some cases that until you’re in the lawsuit and the court requires you to disclose – it could be an insurance policy, for example – they don’t want the other side to know that yet. So, it’s more about kind of playing poker from their side.
Mike Blake: [00:36:49] Interesting. Okay. So, have you run into any scenarios under which a matter is mediated more than once? Maybe they try mediation, they go away, and then more stuff happens. And then, they decide, “You know, let’s give this thing another try.” Can that happen?
Ellen Malow: [00:37:09] Yes. And sometimes what will happen is, they mediate with one mediator, it’s not successful. And then, they pick me later or they do come back. I will tell you what I do often is stay involved in what I would call an informal mediation process. So, if we don’t settle that day, I calendar two weeks from now. I call you up and say, “Where are we?” You say, “We’re not paying a nickel.” Then, I calendar another two weeks and you say, “Well, you know, we might pay a dime.” So, it can happen at different – it may not be a formal mediation.
Ellen Malow: [00:37:43] Interesting, the one with the three parties was kind of fascinating because I’ve never done this. As I told you, we had the three lined up. We couldn’t get to the other two. So, rather than doing two full blown mediations for the last two, we did – what I would call – a settlement conference where we didn’t even have the parties. So, I facilitated conversations between the lawyers in different breakout rooms and it worked.
Mike Blake: [00:38:07] So, we’re running up against our time limit here. But I do want to get a couple more questions. And before we take off, one question here is, is the decision to engage in mediation and has the process itself changed because of the pandemic? Is the thought process around in mediation, has that been changed because of the pandemic and its impact on the legal system?
Ellen Malow: [00:38:39] Absolutely. And it goes right back to what you said at the beginning, the opportunity to get in front of the judge or a jury is becoming more and more remote. I’ve had seminars I’ve attended where some of the judges have said maybe 2022, maybe 2023. And the real issue is, all the criminal cases come first because they have a right to a speedy trial. So, you’ve got all those people that need to be heard. Then, you’ve got the backlog from before the pandemic. And, now, you have this unknown answer as to when it’s going to happen. And like you said, you know, when are you going to put 12 people in a box? Well, they’re trying to come up with ways to be creative, but then you’ll have an outbreak at the court. And then, all of a sudden, that plan gets squashed.
Ellen Malow: [00:39:25] One of the things that judges are offering are bench trials. So, you just try it to the judge and you don’t get a jury. But a lot of people don’t want to try it to a judge. So, I think my business is busier. I mean, it’s hard to tell exactly but I’m seeing more and more cases now, I think, than I did two years ago. And I think it will get busier.
Mike Blake: [00:39:47] Are there any risks to entering into mediation that somebody listening to this program may need to know about? Are there things that can go wrong, haywire, unexpected, you know, that could materially impact their matter?
Ellen Malow: [00:40:02] I don’t see it at all just, again, because it’s confidential. But it goes back to some of the other things I mentioned about showing your hand, and maybe setting a floor and a ceiling, and maybe the other side saying the mediator said X, Y, Z. So, you should lower the value of your case. So, I see those types of things, which a lot of those are kind of psychological things.
Mike Blake: [00:40:30] Ellen, this has been a great conversation. I learned a lot. I’m confident our listeners have learned a lot. Would you be willing to let people ask you questions, send you an email or something to follow up? And if so, what’s the best way to do that?
Mike Blake: [00:40:44] Absolutely. So, my email address is Ellen, E-L-L-E-N, @malow, M-A-L-O-W, mediation.com. Only one Ellen Malow. And then, my website is malowmediation.com, there’s more information there. And I’m on LinkedIn. I’m trying to get really tech savvy, but I’m not quite there yet with Twitter and the other forms of social media.
Mike Blake: [00:41:11] Well, I don’t understand, if you don’t have social media, how do you know who to get mad at?
Ellen Malow: [00:41:17] I’ve got my head in the sand, Mike.
Mike Blake: [00:41:19] Well, that explains why you seem very well-balanced, so good for you. That’s going to wrap it up for today’s program. I’d like to thank Ellen Malow so much for joining us and sharing her expertise with us.
Mike Blake: [00:41:32] We’ll be exploring a new topic each week, so please tune in so that when you’re faced with your next business decision, you have a clear vision when making it. If you enjoy these podcasts, please consider leaving a review with your favorite podcast aggregator. It helps people find us that we can help them. Once again, this is Mike Blake. Our sponsor is Brady Ware & Company. And this has been the Decision Vision podcast.