Some of this may seem mundane but issues can and do come up when a party is making assumptions about or attempting to distinguish the duties and roles of “mediator” as opposed to “attorney.” To begin, mediators are not attorneys and attorneys are not mediators. By the same token, those with an attorney license may happen to mediate and those who mediate may happen to have an attorney license.
When the mediator is engaged to mediate, the mediator is not engaged to serve as an attorney, and is solely engaged to serve as mediator. A confusion about these roles can sometimes result from circumstances within the control of the mediator. The mediator can and should take steps to affirmatively prevent confusion.
Sometimes an attorney bills the mediation via the law firm at which the mediator happens to be an attorney. This is not the same thing as the law firm selling its prior year’s law books to a new attorney and accepting a check for the sale of goods, which is plainly not a legal service. There is no likelihood that the purchaser of these books will think the purchaser has engaged the law firm to perform legal services.
However, when an attorney holds himself or herself out as an “attorney-mediator” and then bills the clients (parties) for which the mediation takes place, there is the potential that a lay person or even an attorney could potentially believe that there is an attorney-client relationship formed. After all, the check made out to “Jones and Smith, Attorneys at Law, PLLC” is accepted by the attorneys into their attorney bank account. The mediator is also expressing at the beginning of the mediation and even in paperwork prior to the mediation that what happens at mediation is confidential. Confidentiality in this context is a circumstance common to attorneys, as in the attorney-client privilege, that what the attorney is told by the client cannot be shared except under very unique and specific exceptions. For example, “For example, the Texas Family Code may require a mediator to disclose child abuse or neglect to the appropriate authorities. If confidential information is disclosed, the mediator should advise the parties that disclosure is required and will be made.” (Ethical Guidelines for Mediators, Adopted by Texas Supreme Court, June 2005, Miscellaneous Docket No. 05). While these Guidelines are aspirational, they are indicative of a statutory exception found in the Family Code.
The mediator’s card given to the clients may well be the card of the attorney, and may not even have the word “mediator” written on it at all. When the attorney uses the term “attorney-mediator” on such a card, on letterhead, or on its website, this potentially adds to or could create confusion. In the grand scheme of things, there is no such role on behalf of clients as an “attorney-mediator.” Either the attorney is representing a client as agent and advising client as fiduciary under a duty of loyalty, or the mediator is serving as a neutral— the opposite of agency, and absent the fiduciary responsibilities incumbent upon attorneys under, for example, the Texas Rules of Professional Conduct (Tex. Disciplinary R. Prof. Conduct, (1989) reprinted in Tex. Govt Code Ann., tit. 2, subtit. G, app. (Vernon Supp. 1995)(State Bar Rules art X [[section]]9))).
Absent distinction, these roles can get indistinct and possibly messy. Take for example a situation where a law partner of a prior mediator in a dispute between the same two parties later serves as attorney for one of the parties. The law partner is part of the firm that held itself out as neutral and as mediator. For the former law partner of the former mediator to then, one day, serve as attorney for one of the parties has an easily avoidable appearance of impropriety. (This question was recently raised as a scenario in the online legal community).
Some mediators use a proactive-evaluative or passive-evaluative style. The evaluative mediator assesses strengths and weaknesses of the parties’ cases and may even offer a prediction of the outcome of the case. The evaluative mediator may even express the odds or likelihood in the mediator’s opinion of one or more outcomes, This kind of assessment coming from an attorney-mediator can also lead to some confusion about whether the mediator may be a second attorney for the client.
For states that do not allow trade names for attorneys, those who have trade names for their mediation company can be confused with assigning such a trade name to their law firm as well.
To avoid confusion between the roles of attorney and mediator (and to abide attorney trade name regulations where applicable), the mediator should keep a separate business solely for the purpose of mediation, just like many non-attorney mediators. Checks should be written to that separate business, such as “XYZ ADR, LLC” or “John Jones, Mediator, Inc.” The letterhead, EIN (and therefore W9) should be separate, as should ideally the website URL.
Will the attorney-mediator, say John Jones, deposit the check made out to “Jones and Smith, Attorneys at Law, PLLC” into an IOLTA account, prepare a bill and move the cash over to an operating account? Or will the same attorney-mediator potentially deposit such a check directly into an operating account. While previously earned money for what the client perceives as attorney work does not have to be placed into escrow, why take the chance of such confusion? Many attorneys have heartache over the concept of depositing checks for services into anything except the IOLTA account. The money, once earned or earned prior to deposit can then be accounted for via billing and moved to operations. But this whole question of where to deposit cash for performing mediation can be skipped if the check is made out to a mediation company for mediation services and not to a law firm.
The very act of accepting and depositing a check can create party confusion. When a law firm receives a check made out to the law firm, but has only provided mediation services, it would be safer for that law firm to have the party have already signed a document that “though the check is made out to “Jones and Smith, Attorneys at Law, PLLC,” the acceptance and deposit of this check does not form an attorney-client relationship.
Some mediators attempt to prevent confusion by expressing in preliminary papers that “the mediator does not serve as attorney for any party” and “the mediator happens to be a licensed attorney, but is solely serving as mediator and not as attorney in this mediation”. Others include “no drafter” language in the Mediated Settlement Agreement (“MSA”) as “Each party acknowledges that this Agreement and Release was drafted by all of the parties in consultation with legal counsel. Thus, the rule of contract construction that provides that ambiguities are resolved against the drafter shall not apply to any provision of this Agreement and Release.”
The ambiguous notion of “legal counsel” in this quote’s context is confusable by the lay party. Not all parties have counsel in the first place.
To be clear, this is not a discussion of the merits of those who mediate who happen to not be licensed attorneys as well. This is a discussion of keeping the roles distinct.
Practicing what is being preached here, this writer keeps two separate companies, one for law practice and another for mediation, with separate EIN, separate bank accounts, and a separate filing system. For the purposes of conflict checks, however, the mediator should verify conflicts against mediation records as well as against legal representation records.
On a whole, attorney mediators should do what makes them comfortable, and yet should be mindful of where confusion of a party might begin. Those in states that prohibit trade names should be especially careful. Texas is presently among the states with such a prohibition.
About the author: Andrew Tolchin is an attorney and mediator in the greater Houston area, and founder of 713 Mediator, LLC and Tolchin Law Firm, PLLC.