Mediation is pitched as an easy and the most cost-effective route to resolution of high-value disputes. It makes complete business sense when you think of it – a self-determined resolution with a facilitated dialogue and completed within a short span of time. Mediation is an absolute no-brainer to the client when compared to months of arbitration and years of litigation, for disputes where mediation would be suitable. However, for lawyers, unlike litigation or arbitration, mediation calls for flexible fee arrangements that reward efficiency.

So, the million-dollar question that make most lawyers blush is – Will this cost-effective, self-designed and party autonomous process puncture my purse? Following on from their conversation at the Mission Mediation Conclave hosted by The PACT in Delhi recently, the authors will delve into what it would take to encourage lawyers to be proactively involved in commercial mediation in India. The aspects covered in this write-up primarily apply to pre-litigation or pre-arbitration commercial mediation. Further, the suggestions made are borne out of practical experience of the authors and may not be reflective various fact situations.

Mediation is a negotiated, client-driven process and its value lies in speed, confidentiality and tailored outcomes. That reality makes rigid litigation-style billing (many-a-times based on hourly rates) commercially unattractive for many clients. Institutions, corporates and firms are therefore experimenting with fixed, capped, blended or hybrid fees to provide cost predictability while preserving lawyer incentives to achieve a settlement.

There are roughly five billing phases in commercial mediation, where lawyers can build a billing structure that is both transparent and justifiable. The hours (mentioned below) span across weeks / few months and are based on general experience of practitioners in commercial mediation.