Alternatives D I G E S T MEDIATION ADVOCACY As usual, old habits are proving hard to break. Fordham Law School Prof. Jacqueline M. Nolan-Haley describes the principles that attor- neys should observe when represent- ing mediation clients so that ADR advocacy doesn’t resemble what it is supposed to replace, litigation representation. .................... Page 41

MODEL RULES Frequent Alternatives contributor Duane W. Krohnke, a partner in Minneapolis’s Faegre & Benson, describes the first major ADR- oriented position paper on one of today’s hottest legal topics, multidisciplinary practice. His article recaps a report adopted by the Minnesota Stare Bar Associa- tion. .................................... Page 41

CPR NEWS Details on C P R s participation in five ADR seminars around the country. ......................... Page 42

SPECIAL SUPPLEMENT: EUROPEAN ADR 2000 Excerpts from CPR’s recent online seminar, European ADR 2000: European ADR Practice, Issues and Trends. .......................... Page 43

ADR BRIEFS New Jersey publishes its new standards for mediators, and guidelines emerge for mediating Americans with Disabilities Act cases. .............................. Page 57

DEPARTMENTS CPR News ........................... Page 42 ADR Briefs .......................... Page 57 Cartoon by Chase ................ Page 57 CPR 20 Past, 20 Future ...... Page 58 Index Info ............................ Page 60 Online Info .......................... Page 64

CPR INSTITUTE FOR DISPUTE RESOLUTION WWW.CPRADR.ORG VOL. 18, NO. 3 MARCH 2000

Representing Clients in Mediation: Principles that Make a Difference BY JACQUELINE M. NOLAN-HALEY There is no shortage of negative accounts about lawyers’ behavior.

A recent Boston Globe article decried the

cently has been inspired to offer a course in civility for lawyers that includes such topics as: How is civility accomplished? Why is it good for you emotionally and professionally

growing problem of incivility in the legal profession: “Call it in- civility, unprofessional conduct, or just plain rudeness. From courthouse fistfights to abusive phone calls laced with obsceni- ties, the veneer ofdecorum that once draped the legal profession is cracking.” Sacha Pfeiffer, “Lawyers Bringing Bad Man-

M E D I AT1 0 N

ADVOCACY

to act civilly? Unfortunately, lawyering

for clients in mediation has not remained immune from the stigma of incivility and unprofessionalism. As media- tion practice grows, so too do its abuses and ethical violations. Accounts of lawyers deliberately misrepresenting facts, breaching - -

ners to Bar,” Boston Globe, B1, July 1 1,1999. The Boston bar is not alone in this re-

gard. In New York, the State Bar Association’s Continuing Legal Education program re-

confidentiality and intimidating parties are slowly creeping into the reported cases. In some cases when lawyers advocate for clients

(continued on page 59)

Multidisciplinary Practice & ADR The Minnesota Bar Takes a Stand BY DUANE W. KROHNKE The U.S. legal profession is debating whether lawyers should be permitted to practice in firms owned jointly by lawyers and non-law- yers. This debate was precipi- tated by an August 1999 committee report to the House of Delegates of the American Bar Association. That report rec- ommended amending the ABW Model Rules of Professional Conduct to permit multi-disci- plinary practice, or MDP, firms.

How does this recommenda-

as the CMDRsection), ofthe Minnesota State BarAssociation, Or MSBAl

about MDP and ADR. The report was pre- Pared a CMDR committee chaired by

Jenelle Soderquist, senior con- sultant at the Mediation Cen- ter for Dispute Resolution, which is affiliated with

MODEL Hamline University Law and Graduate Schools in St. Paul, RULES Minn. Other members of the committee were former Minne- sota Supreme Court ChiefJus- tice Douglas K. Amdahl; James

(continued on page 61)

& Simon PLC; Daniel B. Ventres, who heads his own firm in Minneapolis; Joseph Kenyon,

a

1 tion relate to alternative dispute resolution? w. Brehl, a Partner in Maun

Last month, ~i~~~~~~~ tookastand, on Feb. 17, the Conflict M~~~~~~~~~ and Dispute Resolution Section (referred to in this article

Multidisciplinary Practice and ADR: The Minnesota Bar Takes a Stand (continued from front page) a certified public accountant at Minneapolis’s Schechter, Dokken, Kanter, Andrews & Selcer, and the author.

The CMDR report is being submitted to the MSBATask Force on MDP, which is for- mulating an overall response on the issue for consideration by the MSBA’s annual conven- tion in June. Because the CMDR report is a contribution to the national debate over MDP, it is adapted for Alternatives below.

INTRODUCTION 1. In August 1999, the ABA’s Commission on Multidisciplinary Practice recommended that the ABA Model Rules of Professional Con- duct be amended to permit lawyers to deliver legal services through a multidisciplinary (MDP) firm owned by lawyers and non-law- yers. There are various facets to this proposal, which can be found at www.abanet.org/cpr/ mdprecommendation.htm1. A key part of the proposal was the expression of 15 core values that should be preserved as part of any MDP plan reaching approval.

2. In January 2000, the MDP commis- sion issued its Updated Background and In- formational Report and Request for Comments, referred to here as the “Updated Report.” It can be found at www.abanet.org/ cpdfebmdp. html.

3. The MDP commission’s recommenda- tion was based upon its belief that allowing MDP firms “was in the best interests of the public, would expand the availability of legal services, and would facilitate the development of a new business structure enabling lawyers to reconfigure their practices to assist clients in resolving multi-disciplinary problems.” (Emphasis added.)

4. The MSBA is evaluating this recom- mendation and has asked MSBA sections to comment on the recommendation.

5. The MSBA’s CMDR section was founded in April 1995, in response to the increasing use of ADR in Minnesota. In its bylaws, the CMDR section’s stated purpose

Duane W. Krohnke is a partner a t Faegre & Benson LLP i n Minneapolis. Krohnke is a frequent Alter- natives contributor; his last article, on sanctions for failing to participate i n court-annexed arbitra- tion, appeared a t 17 Alternatives 136 (July/Au- gust 1999).

is to (1) promote the work of the MSBA in the field of conflict management and dispute resolution and (2) improve the practice, el- evate the standards, and advance the cause of ADR in Minnesota. Unlike other MSBA sec- tions, membership is not limited to MSBA members, but includes “any interested mem- ber of the public.” Since Minnesota does not require qualified neutrals to be attorneys, this departure is significant in that it encourages all neutrals in the state to participate actively in the CMDR section.

COM M ENTS 6. The MDP recommendation raises many issues regarding the practice of law that are beyond our purview. We merely comment on the recommendation insofar as it relates to ADR.

7. The primary motivating forces behind the MDP recommendation do not come from the ADR field. We note, however, that some of the major accounting firms have ADR prac- tices.

8. The premise behind the MDP recom- mendation is that MDP firms may assist “cli- ents” in resolving multidisciplinary problems. But attorneys who act as ADR neutrals do not have an attorney-client relationship with the parties involved in ADR proceedings.

9. The MDP recommendation did not in- clude a definition of “the practice of law.” But the MDP recommendation included possible amendments to the ABA’s Model Rules of Pro- fessional Conduct, one of which was the fol- lowing definition of the “practice of law,” which in turn was based in great part on a District of Columbia rule of professional conduct:

“Practice of Law” means the provi- sion of professional legal advice or ser- vices where there is a client relationship of trust or reliance. One is presumed to be practicing law when engaging in any of the following conduct on be- half of another:

(a) Preparing any legal document, including any deeds, mortgages, assign- ments, discharges, leases, trust instru- ments or any other instruments intended to affect interests in real or personal property, wills, codicils, in- struments intended to affect the dis- position of property of decedents’

estates, documents relating to business and corporate transactions, other in- struments intended to affect or secure legal rights, and contracts except rou- tine agreements incidental to a regular course of business;

(b) Preparing or expressing legal opinions;

(c) Appearing or acting as an attor- ney in any tribunal;

(d) Preparing any claims, demands or pleadings of any kind, or any writ- ten documents containing legal argu- ment or interpretation oflaw, for filing in any court, administrative agency or other tribunal;

(e) Providing advice or counsel as to how any of the activities described in subparagraph (a) through (d) might be done, or whether they were done, in accordance with applicable law;

(f) Furnishing an attorney or attor- neys, or other persons, to render the services described in subparagraphs (a) through (e) above.

See www.abanet.org/cpr/mdpappendixa. html.

10. The chair of the District of Columbia committee that drafted its rule has com- mented that any use of its definition of the “practice of law” for purposes of MDPs should be accompanied by the D.C. commentaryon this rule, which can be found at www.abanet.org/cpr/schaller. html. This com- mentary included the following statement:

The rule is not intended to cover the provision of mediation or [ADR] ser- vices. This intent is expressed in the first sentence of the definition of the “practice of law” which requires the presence of two essential factors: the provision of legal advice or services and a client relationship of trust or reliance. ADR services are not given in circum- stances where there is a client relation- ship of trust or reliance; and it is common practice for providers ofADR services explicitly to advise participants that they are not providing the services of legal counsel.

11. In response to the Updated Report‘s request for comments on whether any MDP rule needed to have a definition of “the prac-

(continued on following page)

Multidisciplinary Practice and ADR (continued from previous page)

tice of law” and whether there should be more enforcement of existing laws prohibiting the unauthorized practice of law, we have these comments:

(a) We believe that any MDP rule should have a definition of “the practice of law” and that the definition quoted in Paragraph 9 above is appropriate.

(b) We endorse the inclusion in any MDP rule of the District of Columbia comment that excludes an individual’s providing ADR neutral services from “the practice of law” be- cause there is no attorney-client relationship.

(c) There are a substantial number of ar- ticles discussing whether conducting a me- diation is the practice of law and, if it is, whether non-lawyers should be prohibited from being mediators. These articles have seemed somewhat academic because, to our knowledge, there has been no attempt to pros- ecute non-lawyer mediators for the unautho- rized practice of law. [Editor? note: For information on non-lawyers subject to un- authorized practice of law rules, see last month‘s article on Virginia’s experience, “Bal- ancing Mediation with Rules on Unautho- rized Practice,” 18 Alternatives 2 1 (February 2000).] These articles also discuss whether “real” or “true” mediation is only facilitative, in which case non-lawyer mediators do not have an “unauthorized practice of law” prob- lem. However, if the mediator is evaluative, then, these articles say, the non-lawyer me- diator may have such a problem. All of this discussion would be mooted by adoption of the District of Columbia comment discussed above.

(d) Arbitration, on the other hand, raises different issues. Historically arbitration arose as a means for businesses to have their disputes resolved by business persons-arbitrators who were not lawyers. Under the common law of Minnesota and other US. jurisdictions, un- less the parties otherwise agree, an arbitrator does not have to base the award on the law. Some organizations, such as the American Arbitration Association, emphasize that their arbitrators are not constrained by the law. Other organizations, like the National Arbi- tration Forum, however, emphasize that their arbitrators are required to base their awards on the law. In the latter situation, an arbitrator

would appear to be practicing law, if that means applying legal principles to facts to resolve a dispute. Here too all of this discussion would be mooted by adoption of the District of Co- lumbia Comment just discussed. The same would be true for other forms of ADR. See Minn. Gen. R. Practice Dist. Cts. 114.02(a)(2)-(6), (81, (91, (10).

12. As noted above, Minnesota does not require qualified neutrals in state-court an- nexed ADR proceedings to be lawyers. There are many individuals from professions other than the law who are on the state-court ros- ter of qualified neutrals. In addition, outside the state-court system, professionals other than lawyers provide ADR neutral services.

As we stand at the brink o f

the 21st century, ’thinking like a lawyer‘ may be an insufficient

mode of an a lysis.

We are not aware of any complaints that these other professionals as a group are not provid- ing capable ADR neutral services. Moreover, we believe that these other professionals pro- vide valuable perspectives on the alternative resolution of all types of disputes. For ex- ample, an accounting firm in Minnesota has a practice group of a lawyer and psycholo- gists and family therapists whose primary practice is aiding family-owned and small businesses cope with succession issues where family and business issues are intertwined; they also provide co-mediation services for resolution of disputes where legal and family issues are mixed. We also believe that there should not be any attempt to prevent such other professionals from providing these ser- vices, either by themselves or with lawyers.

13. These multidisciplinary ADR neutral services are being provided without the ne- cessity of any changes in the rules of profes- sional conduct regarding lawyers. We do not know of any circumstances suggesting that there needs to be a change in such rules for this purpose. On the other hand, we cannot say, apriori, that it would be contrary to the public interest, for example, for a firm owned by lawyers, psychologists and accountants to provide dispute resolution services to indi- viduals involved in marriage dissolution pro- ceedings. We believe that new rules could be found to permit such a firm.

14. CMDR has been deeply involved in the development of a code of ethics, which was adopted under Rule 114 of the state’s General Rules of Practice. In April 1997 CMDR submitted a report regarding ADR ethics to the Minnesota Supreme Court that stated, in part, as follows:

The Section believes the adoption of a Code of Ethics in conjunction with Rule 1 14 is very important and neces- sary to set out clear standards in the burgeoning, interdisciplinary field of alternative dispute resolution. The State Court Roster ofneutrals includes individuals from a variety of primary disciplines, including law, business, psychology and social work to name a few. While many disciplines have their own codes of ethics, it is important to have one set of rules to ensure ethical, high quality service when anyone pro- vides service pursuant to Rule 1 14. . . . It should be a document which is un- derstandable and which contains lan- guage that may be evenly enforced.

[Editor? note: Duane Krohnke authored a three-part series on Rule 114 issues that ap- peared in Alternatives from November 1996 to February 1997 on the CMDR’s views on the ethics code; for a discussion of the issue from the Minnesota Supreme Court committee’s perspective, see Barbara McAdoo and Nancy Welsh, “System Implementation Means Difficult Choices,” 14 Alternatives 135 (December 1996). See also “Minnesota Fi- nalizes Neutrals’ Code,” 15 Alternatives 149 (November 1997).]

15. Undergirding our work on ADR eth- ics has been a belief that attorneys should be encouraged to be ADR neutrals and that they should not be at a competitive disadvantage by having different, and more stringent ethi-

(continued on following page)

(continued from previous page) cal rules than those who are not attorneys. Similarly we believe that individuals from other disciplines should not be disadvantaged in this area. We think these comments apply as well to any rule permitting MDP firms.

16. We call the MSBA’s attention to the fact that the ABA joined with the American Arbitration Association and the Society of Professionals in Dispute Resolution to de- velop the Joint Proposed Standards of Con- duct for Mediators.

17. We must emphasize that because ADR is a relatively new field, we in the CMDR Sec- tion have been helping to create the new rules governing ADR (a) a state-court system of court-annexed ADR and code of ethics; (b) local ADR rules for the U.S. District Court for the District of Minnesota pursuant to the Alternative Dispute Resolution Act of 1998; (c) a proposed revision to the ABA Model Rules of Professional Conduct to add a new section on “Lawyer as Neutral” [see “A Model Rule for Lawyers as Third-Party Neutrals,’’ 17 Al- ternatives 78 (April 1999)]; (d) a brand-new Uniform Mediation Act; and (e) a major revi- sion of the Uniform Arbitration Act.

18. The rest of the legal landscape facing ADR practitioners and other attorneys is also on the brink ofother major changes. The ABA Ethics 2000 Commission is reviewing the entire ABA Model Rules of Professional Con- duct to update the rules for the 21“ century. The Restatement of the Law Governing Law- yers is under development. We are in the midst of a global revolution in communica- tions and the availability of information on the Internet. Another centrifugal force affect- ing lawyers and others in society is the glo- balization of commerce.

19. At the same time, there are centripetal forces. Some states are trying to put on the brakes against the interstate practice of law and ADR. The U.S. Supreme Court appar- ently is in the midst of conducting a consti- tutional revolution by fundamentally redefining the allocation of power between the federal government and the states and allowing the states greater latitude.

20. As a result, it has been difficult for us to get our hands around the proposal for al- lowing MDP firms and assessing its impact on the ADRfield. In economics, for example, analysis is assisted by the principle of ceteris parubis, i.e., all other things remaining the same. Now, however, there appear to be few

fixed and stable points of reference for the legal profession.

2 1. Moreover, our typical mode of analy- sis, i.e., “thinking like a lawyer,’’ is to argue that a present problem should be analyzed and decided on the basis of what already has been done, stare decisis. Yet as we stand at the brink of the 21” century, this mode of analy- sis may be insufficient.

. .

22. If all of this is correct, it is possible that all of us will be going through multiple significant changes in how we identify our- selves as lawyers and how we organize our- selves to provide services. Presumably we will continue “to practice law” in order to make a living for ourselves and our families. There undoubtedly will be a very difficult interreg- num between the old order and a not-yet- defined new order.

23. We need help from planners, futurists and management consultants in negotiating this transition. We believe that the first step is to envision how professional services, including legal and ADR services, could and should be delivered in the 2lSr century in order for con- sumers to have the maximum choice in how to buy such services. Once that is determined, at- tention should shift to how we can best manage the complicated and difficult transition from the old order to the new order. Many of the issues raised by the MDP recommendation, as we see it, relate to how a MDP firm should be structured, managed, and regulated which in its breadth is beyond our purview.

24. One of our worries about this new world is the potential separation of different types of attorneys into different firms with the result that lawyers find it more difficult to obtain the advice of attorneys in other spe- cialties. As a consequence, the joint task of constantly reweaving the seamless web ofthe law may be adversely affected. In addition, if litigation lawyers find themselves in barris- ter-like firms and separated from the firms providing ADR neutral and advocacy services, it may be more difficult to continue to de- velop the interplay between the various meth- ods of resolving of disputes. The public interest may not be served.

RECO M M EN DATIO N 25. CMDR recommends that any amend- ment allowing MDP firms should be adopted only if the following requirements are met:

The independence and neutrality of ADR providers, whether lawyers or other

professionals, must be preserved (Pro- posed Model Rule for Lawyer as Third- Party Neutral 4.5.3, 4.5.4 (April 1999) [referred to below as “Mod. R.L. as Neu- tral”]; Minn. Gen. R. Practice for Dist. Cts. 114 Appendix-Code of Ethics (Rules I and 11)).

The competence of ADR neutrals, whether attorneys or other professionals, must be preserved (Mod. R.L. as Neutral 4.5.1 (b); Minn. Gen. R. Practice for Dist. Cts. 114.13,114Appendix-CodeofEth- ics (Rule 111)).

The confidentiality of ADR proceedings and communications must be preserved (Mod. R.L. as Neutral 4.5.2; Minn. Gen. R. Practice for Dist. Cts. 114.08, 114.10 and 114 Appendix-Code of Ethics (Rule IV)).

The fees of ADR neutrals must be rea- sonable (Mod. R.L. as Neutral 4.5.5; Minn. Code. Prof. Conduct 1.5, Minn. Gen. R. of Practice Dist. Cts. 114 Ap- pendix-Code of Ethics (Rule VII)).

For purposes of “upstream” conflicts, i.e., conflicts that might prevent some- one from serving as a neutral, a pro- spective neutral needs to disclose all relationships that might affect impar- tiality, including those of his or her part- ners or colleagues in a firm regardless of profession, with the disputants then deciding, in most instances, whether to hire that person as a neutral (Mod. R.L. as Neutral 4.5.3(b); Minn. Gen. R. Practice for Dist. Cts. 114 Appendix- Code of Ethics (Rule 11)).

For purposes of “downstream” conflicts, i.e., disabling conflicts of interest after the conclusion of an ADR proceeding, there should be no imputation of con- flicts from an attorney or other profes- sional acting as an ADR neutral to other attorneys or other professionals in his or her firm or to the firm as a whole unless the neutral has breached his or her duty of confidentiality and dis- cussed the ADR proceeding with oth- ers in the firm (Mod. R.L. as Neutral 4.5.4(b); Minn. Gen. R. Practice for Dist. Cts. 114 Appendix-Code of Eth- ics (Rule 11, Comment No. 6)).

Persons with disputes must have multiple ways of resolving their disputes, includ- ing ADR.

Persons with disputes must be protected against conflicts of interest, biases and influences adverse to the neutrality and independence of ADR neutrals. @