The Lawyer as Leader

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Corporate counsel is perhaps best positioned to assess and develop a creative way to favorably influence the outcome of internal corporate conflict. Daniel J. LaRocque

“To succeed in other trades, capacity must be shown; in the law, concealment of it will do.” — Mark Twain

A common view, or fear, is that revealing weakness undermines position — the gate must be secured well against the barbarians. Organizations are besieged by threats of liability to the point, the thinking goes, that the corporate client must thoroughly discourage those who bring the threats from within its own walls. Inviting formal settlement of internal disputes runs counter to these beliefs and to certain traditional notions of advocacy in the lawyer’s role.

Yet, everywhere the modern executive can be heard chanting the mantra “align people and processes with business strategies and objectives.” Enlightened managers delegate authority, soften job boundaries and design collaborative teams, in an effort to facilitate work flow and increase output. With the empowerment of front line staff to make decisions inevitably comes legitimate disagreement and friction. Tolerating differences and limiting one’s own grievances are universally required “skills.”

Dispute resolution processes, formal and informal, have newly elevated utility in developing organizations.

Contemporary corporations insist on more, not only from front line employees. From their legal counsel, they seek more than mere counsel. The cost of conflict is so great that the lawyer’s highest utility is frequently to promote “effective resolution” (defined by the client), rather than supply refined legal analysis or contentions.

Indeed, complaints in the equal rights forums overwhelmingly fail or are released voluntarily — but ordinarily only after a painfully exhaustive review of many things other than unlawful discrimination.

Not to be overlooked is the real possibility that the complaint itself has value — either as well-founded criticism of the business or as a legally meritorious claim. For example, the organization may have failed to root out a poorly performing manager, an issue highlighted by a groundless discrimination complaint by his subordinate.

Are the interests of the organization better served by righteous defense of its honor before the Equal Rights Division or by quiet acknowledgement that its performance management is less than perfect?

Corporate counsel is perhaps best positioned to assess and develop a creative way to favorably influence the outcome of internal corporate conflict. When internal corporate factions or individuals are at odds (regardless of whether the legal aspects predominate over other matters of interest to the company), the in-house lawyer emerges as a natural leader in promoting resolution. The same unique combination of factors that distinguish in-house counsel from her outside legal counterpart in performing legal services also distinguish her, in many companies, from other internal choices to lead dispute resolution — her knowledge and understanding of the organization, its business, its legal interests and the degree of need for legal services and protection. The knowledge of applicable substantive law and availability of privileged communication, while essential to the important legal tasks to be completed, may be useful though secondary tools in the preferred resolution process.

So, how does in-house counsel both carry out the legal responsibilities and play a meaningful role in the broader resolution of disputes? Should the two roles simply be merged? No. Though counsel might skillfully encourage resolution (with careful attention to her obligations to disclose to employees her role as counsel for the organization under SCR 20:1.13), she cannot serve as a true neutral. Advocacy is not a hat to be donned and replaced by the hat of a mediator in the very same dispute. Yet if the problem is going to be managed successfully, special skills are needed.

The solution, of course, lies in drawing on a trained professional to mediate the resolution. The mediator’s skills and training are clearly different than those most ingrained and evident in the traditional practice of law. Unlike the human resource consultants who typically intervene earlier in the process, mediators often arrive well after impasse. Skill in negotiation is paramount, as the disputants are all about negotiating at this stage. The experienced mediator applies a combination of well-honed skills in facilitation and evaluation. The “external” mediator enjoys the advantages of being neither vested in the outcome nor perceived as aligned with the organization.

This is important where one party to the dispute appears carry the power of the organization with him.

Where the employees are peers and there are no legal issues involved, why not simply rely on the human resource staff to mediate? That depends on the degree of training and skill of the staff and the degree of challenge in the dispute. “A thoroughly trained mediator is far more than a skilled communicator or facilitator,” points out Cheryl Stinski, a full-time mediator and consultant with Alternative Resolutions, Inc., in Appleton. “Intractable conflicts absorb vast human resources over time,” she adds, “and the prospects for resolution by mediation not only save those resources but greatly increase the likelihood of successful resolution.” In most cases the mediator is encouraged to use the methods calculated to achieve a high quality, lasting result.

How does corporate counsel deal with the concern that a mediator promising confidentiality in communications with the parties, will not adequately convey the information corporate counsel and her client require to serve the company’s legal interests? Stinski says, “Counsel should deal up front with the mediator on issues of disclosure to the company,” so that it is reasonably clear what is and is not to be kept confidential by the mediator. For example, a company with an
as-yet-unknown compliance violations “may want compliance problems to be made known to the company’s management by the mediator,” in which case the parties to the dispute will be so informed at the outset, she explains.

Neutrality and even assured confidentiality “do not result in sweeping compliance problems under the rug,” says Rita Burns, of Mediation and Conflict Management Services in Milwaukee, who serves as an ombuds for employee complaints. The assurance of confidentiality to the employee distinguishes her position and function as an ombuds from other reporting outlets in the organization. Employees who hesitate to report problems in other channels can feel free to speak with an ombuds without concern that their anonymity will be jeopardized or that future relationships will be complicated by having made the contact.

Paradoxically, the confidentiality of reports can be just the lubricant that accelerates, rather than delays, awareness by the executives, as the employee is encouraged first to come forward to release enough information to permit action. As the experience of Enron and other corporate failures illustrates, the complaining employees desire assurance that their anonymity can and will be preserved. However, that concern often exists only to the extent they fear retaliation, notes Burns, who has extensive experience mediating cases for the U.S. Equal Employment Opportunity Com-mission and currently serves as Ombuds at Marquette University.

“Some come to the ombuds as a preliminary step to reporting more formally. Once they become assured the process is safe going forward, they engage in further communication.” The ombuds carefully communicates issues to the company’s leaders in a way that does not risk breach of confidences or anonymity, explains Burns.

Companies with recurring problems in their internal working relationships are at risk and need to consider the ombuds solution, either as an independent contractor or employee.

Clearing away conflict and restoring working relationships — even transforming them to deeper and more satisfying relationships — are the work of skilled mediation professionals. The legal needs and interests directly benefit, as compliance issues are uncovered and litigation and wider human resource problems are headed off.

These are the more obvious benefits of using trained neutrals to receive complaints and resolve conflicts.

Tapping the availability of top-flight mediation professionals when a dispute arises is not the full extent of in-house counsel’s contribution to conflict resolution, although perhaps the most significant and effective. Many of the same mediation professionals also train corporate staff on dispute resolution mechanisms to be embedded in larger business processes and human resource policies. Such processes are most effective when reviewed by corporate counsel and considered in light of other channels for receiving and responding to complaints in the company. Depending on the circumstances, in-house counsel may appropriately resolve some disputes directly, restoring peace among the combatants by using her own skills in facilitation and constructive evaluation. Familiarity with mediation techniques will serve counsel well, not only in overseeing resolution or in practicing the skills in direct contacts, but also in her role as an advocate at any of the various stages of dispute resolution.

“A little concession, now and then, where it can do no harm is wise policy.” — Mark Twain

Daniel J. LaRocque is a Shareholder in the Madison, Wisconsin office of Davis & Kuelthau, s.c., practicing in litigation and serves as a mediator of business, employment and insurance matters and previously served as Deputy General Counsel for CUNA Mutual Group. Copyright © 2004 Daniel J. LaRocque.