An Opportunity for Change
The global community is facing an unprecedented challenge fighting the outbreak of COVID-19 and looking for an appropriate response to the consequences of the pandemic. Like many other industries, the legal industry had to switch gears significantly. We have seen law firms scaling down, suspending partner payments and furloughing employees. Following a brief moment of shock and adaptation, most teams managed the transition into home offices, and the use of various technologies led to an explosion of webinars, online events, virtual meetings and daily briefings. Forced to adapt to this new reality, the legal workplace environment and approaches to communication have changed in unprecedented ways. With pandemic-related lockdowns being gradually lifted in many parts of the world, we now can and must define how “the new normal” should look.
Crises have tremendous force to ignite change. More importantly, a crisis can spur innovation. Recent months have revealed the immense (further) potential of digitalization. Many companies and law firms mastered the technological transition within a short period which otherwise could have lasted months if not years. The arbitration community was forced to consider alternatives to physical hearings, embrace technology for communication, digital case management and e-filings. These alternatives revealed benefits and potential which, although previously available, had not received the required attention at the same scale.
But a spur-of-the-moment change can be very fragile. As creatures of habit, humans are susceptible to reverting to established procedures and behaviours. This article is a plea to embrace the current crisis as an opportunity – to re-examine established procedures, to question desired outcomes and to establish an even better offering for our clients. In order to succeed, the arbitration community should build upon its key feature – flexibility. Below are some thoughts on how this can be achieved.
Flexible work environment
Calls for more flexibility at the workplace are not new. These include well-reasoned requests by our clients for tailor-made solutions, as well as by a new generation of legal talent challenging existing structures.
Despite sensing these calls for change, many legal practices have been slow to transition. For one, because it is not easy to change existing, well-established and complex systems, as this requires substantial time and financial investment. Bringing greater flexibility to the workplace might also require architectural re-structuring: Do we still need to occupy big, expensive buildings with many individual offices, or can we focus on (physical or virtual) spaces for teamwork, social interaction and client meetings and presentations? For example, the Financial Times (26 May 2020) reported that some of the largest UK law firms are preparing to reopen using rota systems, with employees taking turns coming into the office. More flexibility might further require a final departure from hourly-fees’ based business models. Finally, it also requires trust in one’s team – a fairly easy task for some and a daunting challenge for others.
So what would a new typical law firm environment look like? One thing is for sure – pandemic-related restrictions and distance-requirements might still be in place for a while. Of course, flexible working is more than providing people with a laptop. Re-thinking the working environment might lead, for example, to cutting rental costs spent, cutting travel expenses and creating a more appealing workplace for generations Y and Z – as well as costs savings for clients.
Unprecedented situations call for unprecedented solutions. The problems many are facing require new areas of expertise, new collaborations and new ways of problem solving. The current situation highlights more than ever the need for effective, efficient and, frankly, creative solutions. Collaboration is one of the key tools to deliver upon this demand.
Having left Big Law and established dispute resolution boutiques, in our experience collaboration has proven to be one of the major forces behind our ability to continue working on interesting high-profile projects despite our small and decentralised teams. A strong network and a collaborative approach to projects enables us to create a tailor-made offering for each and every case, depending on the specific expertise required. Based on collaboration and flexible structures we can work not only with the best talent in town or within a firm, but worldwide. Collaboration can also be a key driver to reducing costs and delivering efficient solutions.
Finally, interdisciplinary collaboration projects, cooperation with legal tech start-ups and technological offerings create additional value as well. This approach enables the development of new work products as well as more efficient offerings.
Flexibility of Dispute Resolution
In parallel to the above, the last few months have highlighted the importance of (an often over-looked) core advantage of international arbitration and international dispute resolution in general – flexibility of the process. The pandemic has forced the arbitration community to digitalize procedures (I.). The arbitration community could and should, however, go a step further and consider what type of benefits should be introduced into the dispute-resolution process on a more permanent basis (II.). Most importantly, it is worthwhile to carefully consider what type of procedures and offerings best cater to the needs of our clients and users, and whether there is potential for ongoing re-assessment in this regard as well (III.).
I. Digitalization of arbitration
While videoconferencing, remote witness testimony and e-filings are not new, extensive reliance on technology became a wide-spread reality and full-fledged remote hearings have already been held with more ordered by arbitral tribunals.
Where some national courts systems have taken steps to adapt to the new reality (eg, remote attendance for most English court hearings), arbitral institutions and organizations have also joined forces and collaborated in finding the best solutions for the problem. The Arbitration Institute of the Stockholm Chamber of Commerce, for example, offered its newly established digital case management platform to be used for ad hoc arbitrations globally free of charge during the pandemic – a unique cloud-based platform providing a well-structured and secure method to manage arbitrations. The ICC International Court of Arbitration is already working on a technical Virtual Hearing Solution which can be adopted to fully or partially remote hearings. Various webinars and online conferences have also been swiftly organized in order to address the pressing issues of the arbitration community and its users, with a focus on conducting effective remote hearings and further exploring the benefits of technology. Delos, an independent arbitral institution, has compiled and published a very useful list of resources, webinars and checklists on remote hearings.
II. Lessons learned
As a result of the need to digitalize analogue processes, even opponents of digitalization could not help but notice that there are some great advantages coming with it. It is worthwhile to consider which elements we would like to develop further in order to improve established procedures and diversify our offerings.
One of the major improvements could be a better cloud-based offering of digital platforms for case management by arbitral institutions and other providers. Such platforms provide great flexibility with regards to access and the structured management of a case, and can also minimize the risk of cyber-attacks and data leaks. This step could also accelerate the transition to paperless (and more environmentally-friendly) proceedings.
Without question, video-calls and conferences have become the ‘new normal’ for many of us. Positive experience shows, for example, that it is much easier to agree upon a video-appointment than find a time slot in a calendar for a personal meeting that would satisfy all the parties. In addition, video-calls provide for a different and sometimes even more collaborative environment compared to telephone-conferences. Scheduling videoconferences instead of conference calls paired with counsel’s engagement and effective guidance by arbitrators to discuss case-management and, if requested, a preliminary assessment of the case might result, for example, in increased efficiency and settlement of disputes.
During one of many webinars on remote hearings, a leading arbitration practitioner suggested that we reconsider the planning and scheduling of arbitration proceedings as we know it – meaning we reconsider planning around an agreed point in time for a hearing, to be accommodated by all parties and which might therefore automatically and unnecessarily set a prolonged time-frame for proceedings in general. Remote hearings might be much easier to schedule and they provide savings in terms of travel costs, accommodation costs and rental costs for hearing facilities, etc. Finally, being forced to answer the question during the pandemic (and with an eye to the Prague Rules), we should continue to question whether a hearing is necessary in each and every case at all.
III. Re-Examining the desired outcome
When liquidity becomes one of the main issues on the market, lengthy and costly arbitration proceedings might not be the right answer. Parties are often interested in guidance on risk allocation and liability resulting from pandemic-related events. The primary goal is resolution of a dispute with minimal impact on business and liquidity of stakeholders.
Arbitration brings great flexibility with regards to the design of the procedure as such. It is possible to design dispute-resolution procedures which integrate other ADR tools into arbitration and could serve the parties and their needs in a more constructive and efficient method of dispute resolution. Indeed, in light of the pandemic a recent note from the British Institute of International and Comparative Law (BIICL) proposes that parties may be best served by allowing “breathing space” before triggering disputes clauses, and even then first consider engaging in negotiation and mediation processes. It is therefore important to explore from the very beginning whether the main goal of the parties is a hard-fought arbitral award or rather an efficient and timely (perhaps earlier) resolution of a dispute.
In summary: Three takeaways towards a better offering
Instead of getting “back to normal”, the arbitration community should embrace the opportunity to elevate its offering going forward. Adopting a flexible and collaborative approaches, our three proposed actions to achieve this goal:
(i) Re-imagining the working environment and working methods;
(ii) Exploiting the benefits of technology;
(iii) Re-examining the desired outcome of dispute resolution proceedings.
Authors: Olga Hamama, V29 Legal - Duve Hamama Rechtsanwaelte, Frankfurt
Tomas Vail, Vail Dispute Resolution, London
The ideas and thoughts contained in this article are those of the authors and not Nexsoma Legal.