Making Peace and Making Money: Economic Analysis of the Market for Mediators in Private Practice
by Urška Velikonja
Published in paper form in Albany Law Review, Vol. 72, pp. 257-291 (2009).
May 2009 |
|
There has been virtually no empirical or theoretical research about the markets for mediation services and for providers of those services: how many there are, who they are, and what they have in common. This article is an attempt to fill the void.
The article presents data that the supply of willing mediators by far exceeds the demand for their services, and suggests possible economic explanations for the excess entry, including overoptimism and the lack of formal barriers to entry. Excess entry is socially suboptimal: many aspirant mediators spend money pursuing what is likely an illusory career and forego other career options, even though they were never going to be able to make money as mediators. The article also presents data that income distribution in uneven in the market for private mediation and suggests that the market is a winner-take-all market. It proposes economic causes that contribute to this phenomenon: non-homogeneity of the product (i.e., mediation services), de facto barriers to entry, including mediator selection preferences and specialization, organizational structures, and inelastic demand for mediator services. The lack of objective measures of mediator quality, other than settlement rates, further contributes to reputation becoming the most important factor predicting mediator success.
The analysis has important implications for aspirant mediators and for the design of mediation training programs. Aspirant mediators would be well-advised to specialize in a particular field, such as environmental issues or construction, and gain a solid reputation among lawyers and/or business people in that field before starting a mediation career. Mediation training programs ought to be redesigned to convey to aspirant mediators the realities of mediation practice. Suggested Citation
Attachments
Biography
J.D. Harvard 2009, LL.M. Harvard 2003, LL.B. Univ. of Ljubljana 2002. I have been a teaching fellow for the Economics Department at Harvard University from 2007 to present. I will be a Visiting Assistant Professor at Arizona State University Sandra Day O'Connor College of Law starting in August 2009.
Email Author
Website: works.bepress.com/urska_velikonja
Additional articles by Urška Velikonja
Comments
 |
|
| Alicia M. Phidd
|
12/16/10 |
| Informative- A Must Read for New Mediators |
|
|
|
|
This article was suggested by an instructor for a CME and CLE class and it is on point. I found it interesting that the author found the mediation business climate to be "cutthroat", when the business is conflict resolution and all its tenets. (smile) Before reading the article I had interviewed a few mediators and they seem to mirror the ideas expressed in the article. Certainly a must read for new mediators. |
|
|
|
|
|
|
|
|
|
| Patrice ,
Brentwood Tn |
MPM1011@gmail.com
04/23/10 |
| Lucrative specialties in Mediation |
|
|
|
|
I am concerned about having made a substantial investment in mediation training with the belief that there is enough work in the marketplace to justify the level of commitment in time and money. Can anyone speak to the areas that are lucrative besides foreclosure mediation in states where its mandated? I will not be adding this skill set to an existing profession or business. Instead my sole focus will be on mediation. Is it unrealistic to expect to make a good living? |
|
|
|
|
|
|
|
|
|
| Karen Rice,
Scottsdale AZ |
01/08/10 |
| Outstanding and Timely |
|
|
|
|
I agree this is a must read for those interested in pursuing mediation as a career and for those already in the field. I commend your work and welcome you to Arizona! |
|
|
|
|
|
|
|
|
|
| rose ,
Glendale ca |
12/12/09 |
| mediation |
|
|
|
|
The problem is:
1. Here in California, the Los Angeles Superior Court provides panel of pro bono mediators. Attorneys use pro bono mediators versus hiring a private one.
2. There are excessive amount of mediation training taking place. Successful mediators make most of their money from training where there is not enough private mediation (paid mediation) work for mediators who are being trained.
3. I am told over and over again that I am a great mediator. I have J.D. I am fluent in Armenian and Farsi and other cultrues. Have great life experiences, yet I am not hired a private mediator because there is free mediation services provided by the local court. |
|
|
|
|
|
|
|
|
|
| Rodney ,
West Palm Beach Fl |
08/31/09 |
|
|
|
|
This is a seminal article on modern mediation. Although there is a glut of certified mediators, I have found, as the owner of a fairly successful mediation firm, there is a shortage of excellent mediators to recruit. There is also a noticeable lack of diversity among mediators. |
|
|
|
|
|
|
|
See All 6 Comments
