Posted by: johnocunningham | October 29, 2014

How Chief Legal Officers View Arbitration vs. Litigation

Trial advocates in private legal practice who are seeking to serve prospects and clients in more and better ways should be attuned to how their targets view alternative legal avenues for dispute resolution.

This month’s edition of Today’s General Counsel features an article on arbitration trends that neatly summarizes the views of General Counsel who were recently surveyed on the subject of litigation vs. arbitration.

Advocates in private practice would be well-advised to understand the thinking of GCs, who see a few compelling reasons to arbitrate a case (other than a contractual requirement to do so):

  • 38 percent of respondents ranked the need for confidentiality as one of the top 3 reasons to choose arbitration;
  • 38 percent of respondents also ranked “lower costs” as one of the top reasons to resort to arbitration; and
  • 31 percent saw the benefits of more limited discovery (whether by agreement or by rule of a forum).

What are the leading reasons that GCs favor litigation over arbitration?

  • 66 percent see greater difficulty in appealing an adverse decision (so a close case might tilt them toward litigation);
  • 43 percent have a problem with a lack of requirements to follow certain legal rules that courts observe; and
  • 38 percent are concerned about the neutrality of the third party arbiter.

Even if outside counsel disagrees with any of these perceptions, they are wise to understand the perceptions or their clients or prospects, and to communicate with them accordingly. Today’s General Counsel often provides interesting glimpses into the thinking of GCs in their publications.

Note: Today’s General Counsel is not and never has been one of my clients, but I regularly read their publications, which often present something of value to GCs and those who want to understand them.

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