Globally,
you are considered a pillar of the construction mediation and arbitration industry.
How did you achieve this?
Being
considered a “pillar” or a “pioneer” of the construction ADR community is a bit
embarrassing for me, as I still consider myself a simple country lawyer.
I’ve
been extremely fortunate in my career. In 1974, upon graduation from law
school, I was immediately involved in, at that point, one of the largest
construction disputes in California history—the construction of the
Cedars-Sinai Medical Center in Los Angeles—where I was the co-first chair in
the representation of the general contractor and its subcontractors.
Immediately following that, I led a team to a successful result involving a
major construction project at the San Francisco Airport. So, at 32 years old, I
was an “expert” construction litigator with a growing reputation.
Through
promotional efforts and word of mouth, the firm that I started in 1978 with two
attorneys quickly grew; by 1988, we had about 40 attorneys. By that point, I
had attracted 5 of the 10 largest contractors in California as clients and had
also attracted a large number of public agencies, including counties, cities
and various school, water and other districts. Meanwhile, I co-authored a text
titled California Construction
Law, which was
cited in several court cases. I traveled around the country giving seminars on
construction law with, of course, an emphasis on California.
Because
of these efforts, by the 1990s I had acquired a reputation as one of the top
practitioners of construction law in the country, and my firm had become the
largest “boutique” law firm specializing in construction west of the
Mississippi.
Throughout
my career, I had always dabbled in arbitration. I was on the large and complex
construction panel of the American Arbitration Association (AAA) and was one of
AAA’s “go-to guys” in California for high-value construction cases. Beginning
in the late 1970s, I did about four arbitrations per year and received positive
reviews. By the late 1980s, it became clear that mediation was emerging as an
efficient way to resolve complex construction disputes. In the late ’80s and
into the ’90s I appeared as an advocate, representing clients in many
construction mediations, and I very much enjoyed the process and the results I
obtained. There were fewer mediators back then, and fewer still who understood
construction law, so my “mentor”—unbeknownst to him—was the legendary Coley
Fannin of JAMS. He came across as knowledgeable but relaxed, and just watching
him in action taught me a lot. He drilled into my head that “the first thing
you’ve got to do is to identify the impediments to resolution.” That line has
stuck with me ever since.
By
1999, I decided that I really wanted to shift the direction of my career, so I
sent a message to every attorney I knew around the country announcing that I
was going to do ADR full time. I started off doing two mediations per month,
which rather quickly became two mediations per week. This snowballed to the point where I was
doing three or four mediations per week, as well as arbitrations. I joined JAMS
in 2007, and I’ve now handled mediations and arbitrations in 25 states.
Do
you have any advice on how to become a knowledgeable and highly respected
construction neutral?
I
think there are three keys to becoming a highly respected construction ADR
neutral: subject matter knowledge, demeanor and the ability to read the room.
Not
only does the construction industry have its own jargon and ways of doing
things, but so too do advocates who come before you. Construction projects, and
the disputes that can arise from them, are complex; it is essential that that
neutral have sufficient subject matter knowledge to separate the wheat from the
chaff. Knowledge of scheduling and cost principles, together with knowledge of
applicable case and statutory law, is essential, whether in arbitration or
mediation, for the neutral to get to the heart of a matter.
Another
commonality between arbitration and mediation is the neutral’s demeanor. Calmness
and control are needed in both to guide the process in an efficient and
effective manner. I make every effort to listen and not show emotion or tip my
hand when hearing disputes. In fact, in mediations, I generally start by going
room to room to hear what the parties and their counsel have to say, without
injecting too many of my thoughts as to the merits. I do ask “devil’s advocate”
questions to find out information and demonstrate that I know the issues of the
dispute, but a calm and thoughtful demeanor is necessary to gain the trust of
all concerned.
Finally—and
this is something that cannot be taught very easily—during mediations, a
neutral needs to read the room by listening to what is said and noting what is
not said, and even reading body language. Anyone can shuttle offers and
counteroffers back and forth, but it takes highly skilled neutral to evaluate
the true positions of the parties and figure out what will work and what won’t.
If I have strength as a mediator, it is derived from my ability in this regard.
In
the ADR community, it is generally accepted that not every mediator is a great
arbitrator and, likewise, not every arbitrator is a great mediator. Despite
this, you have managed to master both. What are the commonalities and
differences in the practices? What are your suggestions to those who want to
pursue both practices?
I
completely agree with the proposition that not every mediator is a great
arbitrator and not every good arbitrator is a good mediator.
Although
there are commonalities in both practices, I think that there are also some different
skill sets that come into play in arbitrations versus mediations. The general
common skills in mediation and arbitration are subject matter knowledge, the
ability to weigh the facts and know the law and the ability to listen. The additional general arbitration skills are
general knowledge of rules of procedure, award writing, and firm control of the
process so that the matter is heard timely and in an efficient manner. The
additional general mediation skills are risk evaluation, keen people
discernment and observation, humility, and empathy. These skills, while important in mediation,
are less important in arbitrations. The
person who is able to blend the skills of both practices as well as the embrace
the differences based upon the type of proceeding is more likely to find
success as a both mediator and an arbitrator.
While
generalities are always dangerous, I have found that judges who come off the
bench usually make better arbitrators than mediators, perhaps because their
adjudication techniques have been honed over years of hearing cases. I have
also found that mediators tend to be more generalists and may not have
practiced construction law.
I’ve
found that lawyers who were in the trenches make the best mediators of
construction disputes because they can recognize the strengths and weaknesses
of the parties’ positions, having been there and done that. I think that is one
of my strengths, and I think that it is a necessary element of being a
top-notch construction mediator. There is no substitute for subject matter
knowledge, and while a construction arbitration can certainly be handled by an
individual—such as a former judge—who is used to hearing and evaluating
arguments, the traits of a mediator in effectuating resolutions are much more
subject matter oriented.
There
is no real need to read people in arbitrations other than to establish the
veracity of the testimony they give. In mediations, it’s my opinion that
reading people is one of the chief skills necessary. So, while there is
crossover regarding evaluating the merits of a given matter, there is a
different skill required to have the parties recognize the risks they run if
the case goes to trial. This risk evaluation, coupled with the art of
convincing the parties to realistically evaluate their risks, is the key to the
mediation process and the key to being an outstanding mediator.
In
your practice, what do you see evolving due to technology, supply chain issues,
global stability, etc.? How are the industries in which you practice changing
based upon the world today, and how is the ADR community adjusting to these
changes?
ADR
has certainly evolved in the last six years. In 2019, the thought of conducting
virtual mediations and arbitrations via Zoom or other applications was way out
there, and almost all ADR hearings were conducted in person. Today, more than
50% of mediations conducted by JAMS are virtual, and even those conducted in person
usually have some participants appearing virtually in a hybrid hearing.
Interestingly, my personal practice seems to bucking the trend. I estimate that
75% of my mediations are conducted in person, probably because the stakes of my
mediations are usually very high.
Another
major factor that is going to change the way ADR, and particularly
arbitrations, proceeds is the introduction of AI into the process. I’m not an
expert, but there is no doubt that AI will play a growing role.
Supply
chain issues, tariffs and the global economy will continue to have an impact on
construction projects and disputes arising therefrom. Whether an event is force
majeure or a delay chargeable to a particular party in the construction process
is certainly going to be up for debate as we go through the uncertainties of
the current environment.
As
you reflect on your body of work and your stellar career, what are some of the
pivotal or significant moments, and what did you learn from those moments?
My
52-year career can be divided almost exactly in half: the first 26 years
representing clients on major construction projects and the second 26 acting as
an arbitrator or mediator of claims regarding construction. I had great luck
and attracted some wonderful general contractor and design professional firms
to represent early in my legal career. I formed a strong team, which included
scheduling and forensic accounting firms, and we were successful on many
projects, including major hotels, hospitals, prisons, office buildings,
wastewater treatment plants and transportation projects. As my career progressed,
I was given the opportunity to represent virtually every county in Southern
California and at least 10 major cities around the state. One of my most
memorable assignments was representing the Metropolitan Water District of
Southern California when it constructed the seventh-largest earth fill dam in
the world. My takeaway from all that work is to build a strong team, delegate
work appropriately and always have your client’s best interest in mind.
It's
hard to pick out one or two matters that I’ve mediated or arbitrated, but I
take great pride in having helped resolve issues relating to airport
construction in Los Angeles, Seattle, Salt Lake City, Dallas-Ft. Worth and New
York. Additionally, I’ve enjoyed working on subway and light rail projects in
New York, Los Angeles, Houston, Denver, San Francisco and Seattle. The saying “A
mediation is not an event; it’s a process” comes to mind. All of the matters
listed above took multiple efforts over a significant number of sessions. The
lessons learned can be summarized by the thought that a mediator should never
give up trying and should always follow up to see if circumstances have changed
or evolved and may allow for a settlement.
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