Demystifying Alternative Dispute Resolution: Top Questions Law Firms Ask AAA-ICDR®

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By Mansi Karol and Jeffrey T. Zaino

In the evolving landscape of legal practice, alternative dispute resolution (ADR) methods, such as arbitration and mediation, have gained significant traction. As a global leader in conflict management and dispute resolution services, the American Arbitration Association-International Centre for Dispute Resolution® (AAA-ICDR) regularly promotes these powerful ADR tools to law firms worldwide.

Our presentations to and discussions with litigators and transactional attorneys reveal a consistent pattern of inquiries, underscoring the legal community's growing interest in ADR. This highlights the importance of arbitration and mediation in modern legal practice but also reflect the shifting paradigms in conflict resolution.

In this blog post, we'll delve into the six most common questions attorneys pose to us. By discussing these key concerns, we aim to provide valuable insights into the world of ADR and its many benefits for legal professionals and their clients and to explore how the AAA-ICDR's expertise can help navigate the complexities of dispute resolution in today's legal landscape. From cost-effectiveness and privacy to enforcement and jurisdictional considerations, we'll cover the crucial aspects that every legal professional should know about ADR.

So, without further ado, let's dive into the top six questions that law firms consistently ask the AAA-ICDR.

Q: Are there different ways of selecting the right arbitrator other than the traditional list strike and rank?

Yes. While many assume that the traditional list strike and rank method is the only option, rather than the default, for AAA-ICDR cases, there are other ways to select the arbitrator. When counsel work well together, they may enter the process with a pre-selected, agreed-upon arbitrator who doesn’t necessarily have to be affiliated with the AAA-ICDR. Counsel also can select an arbitrator from the AAA Arbitrator Search Platform, which provides access to the full AAA-ICDR panel. Additionally, in certain large, complex cases, the AAA-ICDR offers an Enhanced Arbitrator Selection Process, allowing, for example, counsel to interview prospective arbitrators by phone, email, in person or virtually—all at no extra cost.  The ability to select the decision-maker is a key benefit of arbitration, so counsel should always explore the available options to retain more control over that process.    

Q: Is arbitration faster or slower than litigation?

Arbitration generally progresses more quickly than traditional court litigation, with most cases concluding within nine to 12 months of filing, compared to the multiple years often required for court proceedings. Arbitration’s efficiency usually results from increased cooperation between the parties, streamlined discovery, and fewer and more flexible procedural requirements.

Q: Do you incorporate a mediation step in the arbitration process?

Many arbitration agreements incorporate mediation as either a required first step or a parallel option, creating what’s sometimes called “med-arb” or “arb-med” hybrid processes. Mediation is valuable because it can fully resolve the matter, or, if not, it often narrows the issues. Many of AAA’s rules sets have a mandatory mediation rule but also allow any party to opt out of mediation.  

Q: How much do arbitrator costs vary, and what is the vetting process for AAA-ICDR arbitrators?

The compensation rate of AAA-ICDR panel arbitrators can vary significantly, with hourly fees ranging from $300 to $600 for smaller, simpler cases to $800 or more per hour for complex commercial disputes. AAA-ICDR arbitrators undergo substantial vetting, including extensive experience requirements (typically 15 or more years), required letters of recommendation, research into their background, mandatory training before being listed on AAA-ICDR cases, on-going training requirements and regular performance evaluations to maintain their roster status.

Q: Is there a difference between private and non-profit ADR institutions?

When choosing between private and non-profit ADR institutions, parties should consider several key differences. Non-profit institutions typically offer standardized fee structures and transparency in their processes, with rule development or revision often involving external user input. Their institutional motivations and governance structures differ fundamentally from private institutions, which may prioritize profit over service. Non-profit institutions work for the parties, not the arbitrators.

Q: How is it arbitration different from litigation? How much can counsel deviate from rules?

The fundamental distinction between arbitration and litigation lies in arbitration’s flexibility and privacy. Unlike court proceedings, arbitration generally provides for limited discovery, more flexibility in has the arbitration will proceed, and more relaxed evidentiary rules. Counsel has considerable latitude to deviate from standard rules, provided both parties agree and the modifications do not violate public policy or fundamental fairness principles. This flexibility, combined with the privacy of proceedings and finality of the arbitration award, with limited grounds to challenge the award, makes arbitration a distinctly different path from traditional litigation. The parties’ arbitration agreement and choices throughout the arbitration process, however, will impact the extent of these differences.

Law firms are increasingly turning to ADR as a powerful option for efficient, cost-effective, and private dispute management. This blog has addressed some of the most frequent questions attorneys raise, highlighting the strategic advantages ADR offers to both law firms and their clients. With its adaptable processes and flexibility, ADR enables counsel to choose solutions that best meet their clients’ unique needs, distinguishing it from traditional litigation. The AAA-ICDR remains committed to supporting legal professionals as they navigate these options, providing expertise and innovative approaches to help law firms and their clients thrive in today’s dynamic ADR landscape.