Not simply an arbitrary rating

A new service which will rate arbitrators is launching in January 2010. David Hechler assesses if the venture can help clients find rising talent beyond a few 'household' names

If there are online user ratings for books and restaurants, why can't there be a similar system for mediators and arbitrators? This reasoning led the International Institute for Conflict Prevention & Resolution (CPR) to strike an outsourcing deal with a little-known company that has already introduced such a service. CPR's new arbitrator rating system is set to launch in January, and if it succeeds, it could put the concept on the map.

CPR is an influential New York-based non-profit that promotes alternative dispute resolution. The group tries to help its member companies and law firms make informed decisions when choosing neutrals (as arbitrators and mediators are often called). Its rating system surveys lawyers who have used the neutrals that CPR has screened and listed on its panel. Members are able to access the reviews but not the reviewers' names, which will be kept anonymous. And the cost is absorbed by the neutrals.

The program will be run by a small company called Positively Neutral and will be accessible to CPR members via a password-protected website. CPR chief executive Kathy Bryan says they have yet to decide how much neutrals will have to pay to be rated or what information will be available to companies that are not CPR members.

PD Villarreal, a member of CPR's board of directors and an associate general counsel at Schering-Plough, says it is an important step forward. For years, companies have complained about an information gap in the arbitration field. Finally, that will change. "It's another piece of information," says Villarreal - just like lawyer ratings on Martindale. "And we crave that."

There is a catch, however. The success of CPR's rating system depends on the co-operation of its panel of 580 arbitrators. Not only will they bear the cost (which CPR hopes to keep modest), but they will also volunteer to be part of the system. If they do not sign up, there will not be anyone to rate.

Bryan says she is not worried about that. "I am very optimistic that it will be adopted," she says. She does not expect instant results, though. Her team is only beginning to roll out the plan this autumn. If a quarter of CPR's neutrals sign up in the first six months, "that would be a success," says Bryan, who was an in-house lawyer at Motorola for 17 years before joining CPR in 2006.

The impetus for the rating system came from CPR members themselves, Bryan explains. Large companies, which constitute about two-thirds of the 400 member organisations (the balance are law firms), were particularly eager for the organisation's help. But the solution was pure serendipity.

As Bryan searched for a system early this year, she happened to be contacted by the New York-based Positively Neutral. Its website allows users to search arbitrators and mediators by specialty and location. Users can also see how lawyers who have used the neutrals rated them on criteria such as fairness, preparation, and overall performance. Often reviewers write comments as well.

The deal with CPR is a godsend to Positively Neutral founder Rob Harris, who says it is a "validation of all we have been doing". After four years, his firm has signed up fewer than 100 neutrals in five states. Harris acknowledges that until recently, his company's marketing was "dormant". The venture was started by three business partners and two of them (including Harris) had "day jobs". The third was the full-time executive in charge. But just as they were building momentum, this partner died.

Now Positively Neutral is gearing up with a different focus. "It was initially conceived to be a business development tool for the neutral," Harris explains. Its new aim is to make deals with organisations like CPR, says Harris, who has been an outside lawyer and a neutral himself.

Even after an organisation signs on to Positively Neutral's system, its success is still in the hands of the neutrals. And some may have qualms. One who works at a big law firm says that he's adopting a wait-and-see attitude. "I worry about false information," says the lawyer, who requested anonymity. What would it take to get him on board? "If it reached a point where, if you didn't participate you wouldn't be considered a credible arbitrator, I suppose you'd have to," he says.

Harris explains that safeguards are built in. Neutrals review their ratings in advance, and can always pull their listings. But it's all or nothing, Harris emphasises - they cannot cherry-pick good evaluations and throw out the bad.

The system looks good to at least one potential user. Jack Robinson is the general counsel of Benistar, the US benefit plan adviser. He had never heard of Positively Neutral, but Robinson hires mediators from all over. "Up until now," he says, "I have had to rely on word of mouth through other lawyers and other neutrals." While being interviewed for this story, Robinson clicked on the Positively Neutral listing for a neutral he'd hired based on a recommendation. There was a lot more there than could be learned from a phone call, Robinson says: "It tells you everything you need to know about him. How would you know this if you didn't know him or someone who used him?"

The tool could also help lawyers find neutrals who are relatively new to the game. Ruth Raisfeld, a neutral listed with the American Arbitration Association, CPR and Positively Neutral, says lawyers often take the easy route and do not bother seeking out new talent. "There is a reluctance to use anyone but household names," she says, with 90% of the work going to 10% of the mediators. The choice is too important, Raisfeld maintains, to be based "on gossip or word of mouth".

A version of this article first appeared in Corporate Counsel, Legal Week's US sister title.

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