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I have practiced law for 40 years with the vast majority as a “construction” lawyer. I have seen great… and bad… construction lawyering, both when representing a party and when serving over 300 times as a mediator or arbitrator in construction disputes. To be clear, I have made my share of mistakes. I learned from my mistakes and was lucky enough to have great construction lawyer mentors to lean on and learn from, so I try to be a good mentor to young construction lawyers. Becoming a great construction lawyer is challenging, but the rewards are many. The following is No. 5 of the top 10 mistakes I have seen lawyers make in construction disputes, and yes, I have been guilty of making this same mistake.

No. 5: Being a Jerk to Opposing Counsel 

One great part of being a construction lawyer is that most construction lawyers are reasonable, professional and make working with them easy. To be clear, such behavior is not inconsistent with always zealously representing your client. In most instances, I tell construction clients I prefer a good, experienced, and reasonable construction lawyer on the other side of a dispute. Having someone who knows what he or she is doing will many times save a client legal fees and enhance the chances of a reasonable settlement. The mistake (and it can occur with both young and old construction lawyers) is, simply put, being a jerk. Bad behavior can occur any number of ways, such as getting way too personal (“what kind of lawyer are you?”); inserting your ego into the matter (“never in my XX years have I seen such a **! argument); or simply refusing to cooperate when a reasonable request is made to extend a deadline (“why should I do that since you and your client are **?). 

 The old adage “what comes around goes around” is applicable. If you are uncooperative or refuse to be reasonable and let your ego get in the way, you will get it right back, and it may not benefit your client. To be clear, we have all had difficult clients who want “scorched earth” tactics and zero cooperation. You should explain to the client why it is in her best interest to be cooperative and why you are not being nasty to your adversary. As a member of the bar, you also have professional and ethical obligations, as well as a reputation to protect (both you and your law firm). You can also, without waiving any privilege or compromising your client’s case, let your adversary know that it’s not personal. Most good construction lawyers know – or can figure out – when there are difficult clients on both sides.  

For the “young” construction lawyers out there, be aware of other frequently overlooked consequences of being considered a jerk. First, especially in your geographical practice area, word gets around quickly. That could potentially affect how other lawyers deal with you and that may impact your representation of other clients. All experienced construction lawyers reading this know exactly what lawyers in their areas are…jerks.

Second, bad behavior can impact your personal and professional goals — and your pocketbook. Do you want to move up the ladder in participation on local, state, or national construction bar organizations? Doing so requires recommendations from your peers, and no one likes a jerk or wants to work with a known jerk. Also, in the construction legal world, multiple parties can be involved in a single dispute (e.g., owner/architect/lender/primecontractor/subcontractor/supplier/manufacturer). Legal, ethical, and sometimes business conflicts occur all the time, especially with larger law firms. When you have to tell a client that, unfortunately, you have a conflict that cannot be waived, that client will want a referral. You will want to make a referral to a colleague who you respect, who you know will not steal the client away for the next dispute, and who may have recently referred a client to you because of a conflict. Simply put, jerks do NOT get referrals. 

Finally, and this has happened to me many times: The other parties you do not represent in a matter will note your professional behavior. Just this year I was called out of the blue by the president of a large construction company looking to change counsel for all its construction legal needs. His company was adverse a few years ago to my client in very contentious construction contract negotiation, some of which were face-to-face with his counsel and him. He told me he remembered that while I was very tough and represented my client very well, I was good to work with, reasonable, and (while not using the word)… not a jerk. That company is now a good client of my firm. Having a former adversary hire you is one of the best compliments a construction lawyer can get. 

The moral to this article is simple: Don’t be the kind of construction lawyer who is considered to be a jerk. Don’t let your ego get in the way. Be aware of the consequences of unprofessional behavior. It will negatively impact your client’s case, and it can hurt your reputation, your professional development, and in many instances, your personal pocketbook. Be a bulldog for your clients. Be tough. Earn the other side’s respect… but, don’t be a…**!!!@@ [aka jerk]. 

Lawyer’s Advocacy in Arbitrations: No. 5 of the Top 10 Horrible, Terrible, No Good Mistakes Lawyers MakeDavid K. Taylor, Bradley Arant Boult Cummings, Nashville, TN
dtaylor@bradley.com
615-252-2396

This post is a continuation of the Top 10 most horrible, terrible, no good, “bang your head against the door” mistakes that I have seen lawyers make before, during, and after arbitrations in which I served as the arbitrator. As stated in the previous posts, there are pros and cons to binding arbitration versus trial in a court that go beyond a series of blog posts. In many instances, representing a party in an arbitration requires more due diligence and work than a trial. Great “arbitration” lawyering is essential, but many times does not happen.

No. 5: Know When to Fold ‘Em (Bad Claims/Defenses)

As the late Kenny Rogers sang, when playing poker, “you’ve got to know when to hold ‘em, know when to fold ‘em.”  The same analysis equally applies to preparing for an arbitration hearing and determining what claims/defenses will actually be presented at the hearing. Without repeating the title of these series of blogs, one serious mistake I see, while both acting as an arbitrator or counsel, is lawyers (and clients) who feel that they not only need to present every single possible claim/defense to the arbitrator, but refuse to concede positions in the middle of a hearing when it’s clear the facts are not going their way. An arbitration is not a hearing before a jury or a judge who may not know anything about the subject matter of the dispute. Your arbitrator is an industry expert, most of the time an experienced lawyer in the field at issue. She knows what good and bad positions are and when one side is trying to pull the wool over her eyes. Especially in arbitrations where there are multiple claims (such as a construction dispute), a party’s credibility on ALL positions is vital. Presenting four great claims/defenses but also one to two highly questionable ones, or stubbornly sticking to positions that look like losers, is a serious mistake. Your adversary will use anything they can to oppose the four great claims/defenses and use the questionable claims/defenses to cast doubt on the valid claims/defenses. More importantly, the arbitrator will look askance (he may not say so) at those bad claims/defenses and wonder why you are still presenting a position that appears to be a sure loser. Conceding certain claims/defenses during a hearing, no matter how hard fought, can increase your credibility to the arbitrator. Such a narrowing down on positions and in-hearing concessions can also help reduce exposure, especially if there’s a prevailing party attorneys’ fees clause. This may take some persuasion for a client who may be worried about making ANY concessions, especially in a hard fought, emotional arbitration. But part of your job as a counselor is to give the best advice possible and lay out the pros and cons, and the client can then decide if he wants to go “all in” on all stated positions.

Finally, the other great line from this song is “you never count your money when you’re sittin’ at the table.” Knowing what claims and defenses to “hold” and present, and which ones to dump and fold, will give you and your client the best chance of walking away from the arbitration table with money in your client’s pocket (after legal fees are paid, of course…).

Read numbers 1, 2, 3, and 4 on the list.

Number 5: Not Letting the Client and Mediator TalkThis post is a continuation of the 10 most horrible, terrible, no good, “bang your head against the door” mistakes that I have seen lawyers make before, during and after mediations in which I was the mediator. As stated in previous posts, it takes more than throwing together a mediation statement at the last second and showing up at the mediation. Doing it right requires the same kind of due diligence and work that goes into preparing for a key deposition or even trial. Great “mediation” lawyering is essential and is the best way to get to an acceptable deal.

Number 5: Not Letting the Client and Mediator Talk

Most mediators want to hear and talk directly with the client – not the attorney – since she is ultimately going to make the decision at the end of day. Counsel, you have to jettison your ego. Do not try to cut off this vital communication. Your client may need to get something off his chest, and he finally has someone other than his lawyer at whom to vent. Mediators are paid to take it, and these direct conversations with the client are is immensely helpful for the mediator to determine the key factors to getting to a deal. Remember these are settlement discussions, and “what happens in mediation…stays in mediation.” The mediator needs to know the temperatures in all caucus rooms and many times “non-legal” factors that are not available in court determine if a deal can be done.

Many years ago, I resolved an age discrimination claim by talking directly to the client. She just wanted to move to another city to be near her grandchildren but had no money to do so.  The final deal included a year’s prepaid rent and a used car. The lawyers were not happy, but they are not a mediator’s client: the client is the Deal.

A mediator must establish a position of trust and confidence (and frankly likability) with the key client decision makers so that, when it is time to “fish or cut bait,” the clients will listen to what the Mediator has to say. That cannot happen when the lawyer does all of the talking, and the client just sits there mute like a house plant. Good mediators will not let that happen, even if that means hauling the lawyer out of the caucus room and having a stern discussion.

Read numbers 6, 7, 8, 9, and 10 on the list.

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I have practiced law for 40 years with the vast majority as a “construction” lawyer. I have seen great… and bad… construction lawyering, both when representing a party and when serving over 300 times as a mediator or arbitrator in construction disputes. I have made my share of mistakes and learned from my mistakes. I was lucky enough to have great construction lawyer mentors to lean on and learn from, so I try to be a good mentor to young construction lawyers. Becoming a great and successful construction lawyer is challenging, but the rewards are many. The following is the final No. 10 of the top 10 mistakes I have seen construction lawyers make, and yes, I have been guilty of making this same mistake.

Your and your client’s goal after a construction arbitration is to open the emailed award and be as happy as Ralphie, in the beloved movie A Christmas Story, when he opened up his Red Ryder BB gun Christmas morning. While he later almost “shot his eye out” while battling pirates in his backyard, the point is that he was a good boy all year, and it was up to Santa to review his behavior and decide if he deserved his desired BB gun. In any arbitration, your Santa is, of course, your arbitrator. While you may have presented the best case possible, there is no guaranty of your desired award/present under the tree. The mistake made by many lawyers is failing to treat the arbitrator like Santa to make it as easy as possible for that arbitrator to put you on the very nice award list. You need to – prior, during, and after the hearing – provide the best possible cookies and make it more likely for Santa to easily slide down the chimney to deliver that great award in your favor under the tree.              

Some of these suggestions below are equally applicable to trial judges, but never forget that most construction arbitrators are not full-time neutrals and are concurrently practicing as a lawyer representing clients. Yes, there are non-lawyers on many panel lists (like the AAA), but the use of any non-lawyer on a three-person arbitration panel is very rare these days. One of the most touted benefits of arbitration is that the experienced arbitrators are experts in construction and can sift through irrelevant evidence and arguments as opposed to a judge (or jury) who may have zero experience in construction.

  1. Know your arbitrator’s likes and dislikes. Santa does not want fish sticks left by the tree; he wants milk, really good cookies and fresh carrots for his reindeer. All arbitrators have their own likes and dislikes, and doing something before, during or after a hearing that is a “dislike” is a bad idea. While you vetted potential arbitrators during the selection process, once chosen, you need to do so all over again. You should be able to get some good information since most of the better-known arbitrators are those that are chosen more often. Reach out within your firm as well as to your construction colleagues. What kind of scheduling order does she prefer? What about handling discovery disputes and dispositive motions? Any preferences for how exhibits are put together? What about “hot boxing” experts (testifying back to back)? Is a time clock used for witnesses (and to reign in long-winded lawyers)? More importantly, are there are any known tendencies on specific issues (like delay damages)? Is there an oft-used arbitrator who is unbelievably hard on parties in their presentation about meeting their burden of proof on damages, even with the informality of arbitration and where the rules of evidence may not be strictly enforced?
  2. Wear the white hat in pre-hearing matters, and don’t be a jerk. Arbitrators hate discovery disputes and ego fights between lawyers just as much as judges. I have found that because as an arbitrator I am not an elected judge, and arbitration is informal, this brings out the jerk in some lawyers. Being a zealous advocate is not the same. Will being difficult help your client? You are building your credibility with the arbitrator in every pre-hearing filing and in-person or telephonic hearing.    
  3.  Don’t forget that the arbitrator is a construction expert. You helped choose the arbitrator because of his or her expertise. This is not a trial judge who, as in the middle of a bench trial years ago where I was counsel, called the lawyers up and asked, “I keep on hearing about something called a ‘pay application.’ What is that?”  In a large multi-week arbitration where I served as chair, one of the lawyers during a direct examination went on for 30 minutes getting the witness to talk about certain construction processes as if the panel were a bunch of fifth graders. As nicely as I could, I interrupted the lawyer and said that he could move on and that the panel did not need to be educated on that topic. Did that impact his credibility? Yes, it did, but the panel did not penalize his client for such a stupid waste of time. Santa knows that time is money, and he has other houses to visit.
  4.  Remember the arbitrator is drinking through a fire hose of facts and exhibits.  While you have been living with the case and know the thousands of pages of the project and the hundreds of exhibits, remember that the arbitrator is hearing testimony and reviewing exhibits for the first time when the hearing begins. Yes, there may have been dispositive motions and a pre-hearing brief, but when the hearings start, the arbitrator is listening to testimony, making notes, and juggling exhibit books. The lesson? Take your time with your examinations. Slow down. Make sure the arbitrator is caught up to where you are. Provide a brief summary before an examination of what areas you intend to go over, as well as what exhibit books you will use. Santa wants time to understand the house, the living room’s layout, and where best to put the presents. 
  5. Create a joint set of exhibit books. The previous blog post, No. 9, emphasized the many benefits of working with the opposing counsel and creating a joint set of exhibit books. Most good arbitrators require such a process, and it stops the problems (delays and confusion) of each side showing up with its own 20 thick exhibit binders when 75% of the exhibits in each set of binders are the same.
  6. Identify the exhibit books you will be using before an examination. Do not wait until you begin a witness examination (direct or cross) to specify which book you will be using. Tell the arbitrator (and counsel) before you start which books you will be using so everyone can pull out those books and better follow your examination. Again, this eliminates all sides going back and forth to find the applicable witness books.  
  7. Consider creating witness exhibit books. This may seem counterintuitive if the goals is to limit the number of books, but if you have a witness with a small number of exhibits that are scattered among multiple books, consider putting together an exhibit book for that witness that has the exhibits already numbered (as well as what books they are in).  
  8. Color code the exhibit books on the front and the spine. Most counsel use the same black exhibit books. While there may be a label on the front and sometimes the spine, especially if there are multiple books, there can be confusion and time wasted.  Using a different color code on the labels, or even different color binders, can help efficiency (“Please go to book 5, the red one”).
  9. Make sure each page in each exhibit is numbered. While many of the exhibits will have their own numbers, confusion and delay occur when, for instance, there is an exhibit that has 20-60 pages, but the individual pages are not numbered. This happens with photos, long text streams, and multiple invoices. There is nothing more frustrating for an arbitrator (and a witness), and it disrupts an examination, for the lawyer to say: “Please turn to book 18, exhibit 135, and if you go about a fourth of the way in, you will see a picture that looks like…” And no one can find it. Worse, halfway through your “Perry Mason-like” cross examination about that picture, the arbitrator says, “Counsel, sorry, I must have been looking at the wrong picture. Can you orient me?” 
  10. Make good decisions on what exhibits go into your books, and keep up with what exhibits have been used in the hearing. The arbitrator understands that since there is limited pre-hearing discovery in most arbitrations (sometimes no depositions), the tendency is to include every document or email. But be careful not to dump scores of exhibits into books that may not have even been used. This will impact your credibility. And pay close attention to what exhibits are used during the hearing. It may be (again, treat your arbitrator like Santa) that with everyone’s cooperation, there can be scores of exhibits removed from books, or even complete books can be withdrawn.

Ralphie deserved his BB gun, but not the destruction of his family’s turkey by the next- door neighbor’s coon hounds. By thinking about and implanting the many ways to make your arbitrator’s decision-making more efficient, you create credibility for yourself and your client and will increase the likelihood of an excellent Christmas morning.   

Listen to this post

I have practiced law for 40 years with the vast majority as a “construction” lawyer. I have seen great… and bad… construction lawyering, both when representing a party and when serving over 300 times as a mediator or arbitrator in construction disputes. I have made my share of mistakes and learned from my mistakes. I was lucky enough to have great construction lawyer mentors to lean on and learn from, so I try to be a good mentor to young construction lawyers. Becoming a great and successful construction lawyer is challenging, but the rewards are many. The following is No. 9 of the top 10 mistakes I have seen construction lawyers make, and yes, I have been guilty of making this same mistake.

While the legal profession has come a long way as far as being “paperless,” with few exceptions, construction legal disputes still maintain a high level of tree killing. To be clear, clients have moved on and are at the forefront, using AI as well as project specific software (like Procore) to manage the enormous amount of documentation necessary to timely and properly design and build large projects. While I have served on a few arbitration panels where all sides cooperate and have presented exhibits exclusively via thumb drives/laptops and links, these are the exceptions and not the rule. Last year, I was on a panel for a three-week arbitration involving six parties (owner, architect, prime contractor, surety, two subcontractors). Despite pre-hearing admonitions by the panel for counsel to work cooperatively on joint exhibits, clearly labeled and numbered, the parties presented each panel member with a total of 60 black exhibit books, each more than six inches thick… and 75% of the exhibits in each side’s set were exactly the same. Precious time was wasted during the hearing dealing with redundant and poorly organized exhibits and caused a lot of confusion. A typical exchange went something like this: “Panel, please go to our Exhibit Book 23, exhibit 235, and sorry, this exhibit has 45 pages that are not numbered, so go somewhere in the middle.” Counsel and the arbitrators would then stand up, reach back to their exhibit book stack, sort through and find the right numbered book, haul it back to the table, move (or step over) the five books they just used, pull open the book with the three-hole binder (which typically gets broken), and try to find the referenced exhibit.   

There’s a better way, and before the construction lawyers out there grind their teeth and shake their heads, please remember that your goal as an advocate is to persuade the arbitrator of the merits of your client’s position. Anything you can do to make the arbitrator’s decision easier (yes, treat your arbitrator like Santa) should be done. Here are just a few of the ways – some easy, some hard – that have been implemented to address this issue, especially in large, multi-week arbitrations, with hundreds of exhibits and scores of witnesses:

  1. Go fully or even partially paperless.
    • This takes full cooperation and coordination with not only counsel, but the arbitrator (who may still want hard copies).  Technology is great until it is not. Is the hearing room appropriate and has the necessary technology? Of course, no need to worry about a room if it is a 100% virtual arbitration (which happened many times during COVID). But, what’s plan B if something goes wrong? Chaos happens, and that’s no good especially if it happens to you (and thus your client).     
  2. Create a joint set of exhibits.
    • Most good arbitrators mandate in the initial scheduling order that counsel exchange a list of all possible exhibits 30 days prior to the hearings and then work together in good faith (yes, I know that can be hard) to create a joint set of exhibit books. As mentioned above, if each side prepares and brings its own set of exhibit books, it is certain that many, if not most, of the exhibits in each sides’ books will be identical. Avoiding duplication is really easier than you think. The books can be organized in sections with a joint index. By way of example: pre-hearing briefs; contracts; pay applications, pictures/videos, damages backup, summaries, specifications, expert reports; and a year-by-year chronology (notice letters and emails). Remember that generally the technical rules of evidence do not strictly apply in arbitrations, so there is no need to fight about relevancy or admissibility. Absent something unusual, all the submitted exhibits from all sides will be admitted by the arbitrator. While this process can take time and effort, setting aside the fact that it will make the arbitrator’s life easier (especially during the post-hearing award process), it has enormous benefits, including making the preparation of witnesses and examinations so much easier and more efficient. If you try it, you will like it. If the arbitrator does not suggest this process during the initial call, you should do so.  
  3. Identify the exhibit books you will be using before an examination.
    • Do not wait until you begin a witness examination (direct or cross) to specify which book you will be using. Tell the arbitrator (and counsel) before you start which books you will be using so everyone can pull out those books and better follow your examination. Again, this eliminates all sides going back and forth to find the applicable witness books.  
  4. Consider creating witness exhibit books.
    • This may seem counterintuitive if the goals is to limit the number of books, but if you have a witness with a small number of exhibits that are scattered among multiple books, consider putting together an exhibit book for that witness that has the exhibits already numbered (as well as what books they are in).  
  5. Color code the exhibit books on the front and the spine. 
    • Most counsel use the same black exhibit books. While there may be a label on the front and sometimes the spine, especially if there are multiple books, there can be confusion and time wasted.  Using a different color code on the labels, or even different color binders, can help efficiency (“Please go to book 5, the red one.”).
  6. Make sure each page in each exhibit is numbered.
    • While many of the exhibits will have their own numbers, confusion and delay occur when, for instance, there is an exhibit that has 20-60 pages, but the individual pages are not numbered. This happens with photos, long text streams and multiple invoices. There is nothing more frustrating for an arbitrator (and a witness), and it disrupts an examination, for the lawyer to say: “Please turn to book 18, exhibit 135, and if you go about ¼ of the way in, you will see a picture that looks like…” And no one can find it. Worse, halfway through your “Perry Mason-like” cross examination about that picture, the arbitrator says “Counsel, sorry, I must have been looking at the wrong picture. Can you orient me?” 
  7. Make good decisions on what exhibits go into your books, and keep up with what exhibits have been used in the hearing.
    • The arbitrator understands that since there is limited pre-hearing discovery in most arbitrations (sometimes no depositions), the tendency is to include every possible document or email. But be careful not to dump scores of exhibits into books that may not even be used. This will impact your credibility. And pay close attention to what exhibits are actually used during the hearing. It may be (again, treat your arbitrator like Santa) that with everyone’s cooperation, there can be scores of exhibits removed from books, or even complete books can be withdrawn.

When there will be multiple exhibit books, these simple guidelines will help you, your client, and witnesses better prepare and present your case. You can enhance your credibility by using these tactics regarding exhibits prior to your next arbitration hearing.   

Listen to this post

I have practiced law for 40 years with the vast majority as a “construction” lawyer. I have seen great… and bad… construction lawyering, both when representing a party and when serving over 300 times as a mediator or arbitrator in construction disputes. I have made my share of mistakes and learned from my mistakes. I was lucky enough to have great construction lawyer mentors to lean on and learn from, so I try to be a good mentor to young construction lawyers. Becoming a great and successful construction lawyer is challenging, but the rewards are many. The following is No. 8 of the top 10 mistakes I have seen construction lawyers make, and yes, I have been guilty of making this same mistake.

Most (but not all) commercial construction contracts contain binding arbitration clauses.  Whether the contract is between an owner and architect/designer, an owner and prime contractor, or a subcontractor and prime contractor, the decision to arbitrate or litigate a dispute is always negotiable. You can refer back to one of my previous blog posts in this series discussing the pros and cons of binding arbitration vs. litigating in court. But when parties have decided to arbitrate a dispute, the next question is what rules will apply and how will the arbitration be administered?

Most arbitration clauses (especially those in the standard AIA form set of construction project documents) specify that the American Arbitration Association (AAA) will “administer” the arbitration and that the construction rules of the AAA will apply (the “AAA Rules”). Per the AAA Rules, a party filing an arbitration pays a filing fee to the AAA, the amount of which is based on the amount of the claim. For example, the total non-refundable fee (with few exceptions) for a claim (or counterclaim) from $500,000 to $1 million is $12,675. A claim from $1 million to $10 million is $17,450. There are other AAA fees to pay as the process continues. The other primary costs are the compensation (normally hourly) of the selected arbitrator (or panel).  

There are many experienced construction lawyers who are unhappy with the administrative services provided by the AAA (I am not one of them) when taking into consideration the amounts charged by the AAA to the clients. Their arguments are as follows: “I know who the good and bad arbitrators in my area are. My clients do not need to pay the huge AAA filing fees to just get a list of potential arbitrators. And once chosen, a good arbitrator takes over the administration of the arbitration and all the AAA case manager does is set up calls (when the arbitrator does not do so), collects the estimated arbitrator fees from the parties, sends out notices and pays the arbitrator.” 

Because of the arguments above, and other concerns, there is a growing trend for parties and their construction lawyers, even with an arbitration clause that calls for AAA administration, to completely “bypass” the AAA and have the arbitration administered “privately.” Over the past five years, I would estimate that 33% of the arbitrations for which I have served as an arbitrator (including on a panel of 3 arbitrator) over the past 3 years have been privately administered. What this means is that the parties agree to amend the arbitration clause; enter into a private arbitration agreement (which may call for portions of the AAA Rules to apply); and agree on an arbitrator(s). There can also be an agreement to a private arbitration without a pre-existing arbitration clause. While the arbitrator’s rates will normally be the same as the rates charged by the AAA, the obvious savings to the clients is that the AAA’s initial filing fees and other charges are avoided.

On first blush, especially for large claims and counterclaims, this may look like a win-win for the clients. However, before you go off and recommend this to your clients, you better be fully aware of the risks and issues that can arise.

  • Avoid issues by having an agreed private arbitration agreement.

If the arbitration clause calls for AAA Rules, and the parties agree to private arbitration, there should always be a carefully well-drafted private arbitration agreement signed by the clients. It should, among other items, set forth what rules will be applicable; what pre-hearing discovery will be allowed; identify the agreed arbitrator (and at what hourly rate); outline the requirement to split the arbitrator compensation; and determine a process if, for whatever reason, the existing arbitrator must withdraw prior to the hearings. I do not agree to serve as a private arbitrator without such an agreement in place (which is where I obtain my authority to issue a binding award).  Also, do not forget that such an agreement is a “contract,” and there can be clauses included that were not in the original contract, such as a prevailing party attorneys’ fees/arbitration expenses clause or even an agreement for the most convenient hearing location (not the location of the project). Last year I served as a private arbitrator on a project located in Alabama with counsel in Atlanta, Tennessee and Colorado, and the hearings were in my firm’s offices in Nashville.          

  • Involve your client in the arbitrator selection.

In the AAA process for selecting an arbitrator, the AAA sends a list of potential arbitrators to both counsel,  who then send in a confidential list to the case manager with names crossed off and an order of preference (much like jury selection).  The case manager then reviews the list and appoints the arbitrator (subject to conflicts). In a private arbitration, both sides must agree on an arbitrator.  In most instances, the client will not have any idea of any potential arbitrator, so the client will be heavily relying on your advice, albeit tempered by the admonition that there cannot be any guaranties on how an arbitrator might rule. Another previous blog post in this series discussed the issues of not vetting potential arbitrators. The point here is to involve your client and explain who has been suggested as the private arbitrator. Because if the agreed upon arbitrator rules against your client, despite your fantastic efforts, a losing, disgruntled client may ask (when presented with your final post-hearing invoice), “I don’t recall agreeing to this arbitrator: why did you recommend we use that guy? You told me he would call balls and strikes, and he did not.”              

  • Managing post-arbitrator selection conflicts can be tricky.

While any potential private arbitrator will disclose any conflicts (same process as the AAA), arbitrator conflicts can come up after selection. An example would be the later disclosure of expert witnesses or fact witnesses. If that arbitrator uses or has used one side’s designated expert, there should be a disclosure. The difference is that when the AAA administers the case, if a disclosure is necessary, the arbitrator discloses to the case manager who then deals only with counsel. Under the AAA Rules, the AAA has the sole discretion to rule on whether the arbitrator can continue to serve. In a private arbitration, the arbitrator must manage the conflict directly with counsel. One solution is to designate, in the private arbitration agreement, another qualified arbitrator who is authorized by the parties to rule on any conflict.    

  • Handle party nonpayment issues.

When the AAA administers a case, the arbitrator provides an estimate of his total compensation/expenses, and the AAA bills each side one-half of the estimate. The payments go into the AAA “bank.” The arbitrator sends invoices to the AAA, and the AAA pays the arbitrator from the deposits. The difference is if one side does not pay its share. If a AAA administered arbitration, the case manager manages it internally and does not inform the arbitrator which side has not paid. If the payment is not timely made, the arbitrator is then given the option of proceeding with the hearings or putting the arbitration on hold. The AAA does give the paying party the option to pay the other side’s portion (but most of the time this does not happen). In a private arbitration, the arbitrator is the “bank.” The pre-payments are made to her, and obviously she knows which side has or has not paid. 

The bottom line is not making the mistake of allowing the “benefit” of a client not having to pay the AAA fees with the real and material issues that can occur with a private arbitration. Having good, experienced counsel on both sides helps, as well as knowing that many of the identified issues can be anticipated in a well-drafted private arbitration agreement.

Listen to this post

I have practiced law for 40 years with the vast majority as a “construction” lawyer. I have seen great… and bad… construction lawyering, both when representing a party and when serving over 300 times as a mediator or arbitrator in construction disputes. To be clear, I have made my share of mistakes. I learned from my mistakes and was lucky enough to have great construction lawyer mentors to lean on and learn from, so I try to be a good mentor to young construction lawyers. Becoming a great and successful construction lawyer is challenging, but the rewards are many. The following is No. 7 of the top 10 mistakes I have seen construction lawyers make, and yes, I have been guilty of making this same mistake.

No. 7: Not Paying Attention to Your Arbitrator or Judge During a Hearing

Trial and hearing advocacy skills – whether you were exposed during law school or in the heat of a legal battle – can be both an art and a science. This blog post does not relate to jury trials, but to arbitration hearings (which can be in front of one arbitrator or a “panel” of three arbitrators). However, it is equally applicable to bench trials before a judge.

No matter how much we try to become a “paperless” society, most construction projects that turn into a legal dispute will be document intensive. In a typical construction arbitration hearing, there can hundreds of proposed exhibits, normally presented in scores of “exhibit books.” I was the chairperson in a three-week arbitration a few years ago that had 850 exhibits contained in 30 exhibit books. There were 45 disputed change orders, various delay claims, and multiple expert witnesses. There were attempts to present the exhibits through the use of flash drives and technology, but at the end of the day, most arbitrators will want hard copies.  

Of course, all of the significant lawyer and client preparation for an arbitration can be wasted if the parties’ presentations are not presented in a manner that takes the arbitrator into consideration. While an arbitrator will have some general knowledge of the issues, the majority of the time during the hearing, he is drinking through a fire hose of facts, witnesses, dates, issues, and exhibits, while at the same time trying to take legible notes.

Here are the two horrible, no-good mistake scenarios that often occur and can undermine even the best lawyer preparation and presentation:                

  1. You have prepared for days for a vital cross-examination. This is why you went to law school and became a construction lawyer. Your client representative can’t wait to see you in action. Your cross is going great. You are in the zone. You stare down the intimidated witness. You nail the witness many times, going back and forth between exhibits in exhibit book 1 (which has 55 exhibits). You are just about to complete your cross after getting the witness to admit a key fact when you look to the side, hoping to see the arbitrator admiring your prowess, and notice the arbitrator is… busy flipping through exhibit book… 4. Has the arbitrator even been following your devastating cross? 
  2. You have diligently prepared for a vital direct examination on which you and the witness have been working for days. You have five key areas to cover, and the examination will probably go for three hours. You start, and the direct is going great. You seamlessly run through multiple exhibits, complete the first three key areas, and make a vital point. But then the arbitrator says, “I am so sorry, counsel, I have been lost for a few minutes. What issue are you now addressing and to what exhibit are you now referring and what exhibit book is that in?”

In either horrible scenario, you can bet that the other side won’t let you just repeat your devastating cross (and even if so, the witness is now prepared) and certainly will object to a repeat of previous testimony. 

The obvious “no good” mistake made over and over again (by both young and old construction lawyers) is the failure to pay attention to the fact finder. But there are a number of practical solutions to avoid this mistake:

  • Slow… down… your examinations. Pause between questions.
  • When you move on to another subject or topic, tell the arbitrator to get her oriented — and to give her a chance to finish or make notes or put markers on the exhibits you have just used.
  • If you are going to be using multiple exhibit books during the examination, tell the arbitrator before you start an examination (“Mr. Arbitrator, for my direct examination of Mr. Client, I will be using exhibit books 5, 9 ad 10”) so he has a chance to have the exhibit books ready to go and follow along with you.
  •  Always look up and give the arbitrators time to get to another exhibit book and find the specific exhibit. Make sure they are caught up in all respects. It is perfectly fine to ask if the arbitrator is caught up and has the book/exhibit.
  • Use a co-counsel or client representative to keep an eye on the arbitrator and to let you know, as you begin to ask your vital questions (the “Perry Mason” moment), if the arbitrator is caught up, not taking notes, or has his nose in another exhibit book.           

The lesson to be learned is, in the end, pretty simple: Especially in arbitrations where an appeal is really difficult and many times there is not a court reporter, make sure that your fact finder hears your great advocacy on behalf of your client. That way you and your client can be assured that, win or lose, the arbitrator heard and considered your arguments.      

Listen to this post

I have practiced law for 40 years with the vast majority as a “construction” lawyer. I have seen great… and bad… construction lawyering, both when representing a party and when serving over 300 times as a mediator or arbitrator in construction disputes. To be clear, I have made my share of mistakes. I learned from my mistakes and was lucky enough to have great construction lawyer mentors to lean on and learn from, so I try to be a good mentor to young construction lawyers. Becoming a great and successful construction lawyer is challenging, but the rewards are many. The following is No. 6 of the top 10 mistakes I have seen construction lawyers make, and yes, I have been guilty of making this same mistake.

No. 6: Not Marketing Your Skills: Internally and Externally 

You are a proud construction lawyer.  Like Liam Nelson in many of his movies, you have a “special skill” set. You are both a transactional lawyer when negotiating construction contracts and a “dispute resolution” specialist when called upon. Unlike most “litigators,” who normally get involved after a dispute occurs, you are brought into a matter by a client early on in a project to provide legal and practical advice so that a full-blown dispute never happens – or if it does, the client will be in a better position to achieve a good result. You are an aggressive fact finder  and zealous advocate. You know more about the way a construction project is financed, negotiated, documented and built than some of your clients. You can provide a more accurate analysis of probable outcomes of disputes, especially in arbitrations. 

Then what’s the MISTAKE? The assumption in this post is that you want to be a successful, well respected, and – yes – profitable construction lawyer. If the answer is no, you are not reading this post. The mistake I often see, especially with young construction lawyers, is that they do not properly market themselves with these “special skill sets” both internally within the law firm and externally to fellow lawyers and the construction industry. This includes failing to make cross marketing a priority.

Marketing Internally

Of course, marketing yourself internally depends on your experience, the size of your law firm and your construction group. But you can’t sit back in your office and expect work to come to you or be fed work by a partner. Referrals can come from within a firm, whether from transactional lawyers or litigators. Establish yourself as one of the “go to” lawyers for reviewing and negotiating construction contracts, reviewing arbitration clauses in non-construction contracts, and for all things related to arbitration. Offer to put on seminars about your practice or attend monthly practice group meetings for other groups. Send relevant construction law updates to your partners who are assisting potential construction clients in other practice areas. Pay attention to trends in the industry and deals being worked on internally, especially with clients for whom you have done work. Make yourself available (and do great work) if asked to help a client by a non-construction attorney at your firm. Seek out and create relationships with the most successful lawyers in your firm or group and ask how they achieved their success. The benefits of a personal “in person” relationship, not just via zoom or email, are substantial.

Marketing Externally via the Bar 

Because of the very nature of construction, and the number of parties involved in a construction project (lender/developer/owner/designer/prime contractor/subcontractor), referrals by other lawyers due to conflicts regularly happen. If the construction bar in your area doesn’t know you, other lawyers will not refer work to you, and that has to change. Consider doing the following to help build you brand within the local/state construction bar:

  • Join and actively participate in your local or state bar construction committee, and that can include committees focusing on ADR. If there is not one, create one through your bar or via a separate organization. Contact the folks in charge of CLE for your local and state bar associations and offer to put on a construction (or even arbitration) related CLE program, which may be only an hour. In Tennessee, we created the “Tennessee Association of Construction Lawyers”, and it has been highly successful.
  • Try to write articles to be published in local or state bar magazines. The ABA Construction Forum is a great national construction lawyer organization, but it takes a willingness (as well as your firm’s support) to regularly attend meetings, actively participate, and work your way up to leadership positions.
  • Consider writing a series of blog posts, which can be picked up by national media groups. These efforts may also be taken into consideration when the various groups select “rising stars” and “best of” in different legal fields.             

Marketing Externally to the Construction Industry

Many successful construction lawyers focus their marketing efforts not on other lawyers but on construction industry groups. There are national construction organizations (such as ABC, AGC, ASA) that have local and state group meetings. Although frequently overlooked, there are also specialty construction groups, whether roofing, masonry, road building, specifications, or architects. Each group meets monthly and has state and national conferences… for which they need speakers. Research and consider joining these groups, go to the monthly lunches, and actively participate. Offer to put on continuing education at no charge. In addition, research which specialty groups publish magazines. Any time you visit a client see what publications are out front in the waiting area. What organizations are they a member of? Offer to co-speak on a topic at an upcoming meeting. Submit an article of interest geared towards that group. Many times this results in invitations to speak at national meetings. All of these efforts (as well as keeping your firm bio updated) can raise your profile within your law firm and group.           

Marketing and Cross-Marketing to Existing Clients

Be proactive in knowing your client’s business. Keep up with their projects and any awards. Many companies want to promote from within and educate their employees. You can offer to put on presentations at their office, which also solidifies you as their “go to lawyer.”  Finally, never overlook the fact that construction clients, like any other business, have many legal needs. If you work for a full-service firm, make the client aware that your firm can provide labor, banking, real estate, and transactional expertise. Getting that work into your firm not only helps you succeed but also makes for very happy, impressed and appreciative non-construction lawyers.        The bottom line is this: Don’t be “that” construction lawyer. Be proactive in determining how your  special skills can translate into becoming an even more successful lawyer. Make and stick to a written plan with both short- and long-term goals. Seek advice from your mentors. This may not immediately result in recognition and new clients, but business development is a process, and you have to stick with it in order for any plan to be successful.

Listen to this post

I have practiced law for 40 years with the vast majority as a “construction” lawyer. I have seen great… and bad… construction lawyering, both when representing a party and when serving over 300 times as a mediator or arbitrator in construction disputes. To be clear, I have made my share of mistakes. I learned from my mistakes and was lucky enough to have great construction lawyer mentors to lean on and learn from, so I try to be a good mentor to young construction lawyers. Becoming a great construction lawyer is challenging, but the rewards are many. The following is mistake No. 4 of the top 10 mistakes I have seen lawyers make in construction disputes, and yes, I have been guilty of making this same mistake.

No. 4: Not Folding Bad Claims/Defenses

We are taught in law school and as young lawyers to assert every claim and defense, especially at the beginning of a lawsuit or, in the case of most construction disputes, in arbitration. This is not a mistake. It is necessary because typically at that early stage of the dispute the facts are unclear. Your client also may be focused on going after the other side and want you to make every possible claim or defense. The mistake is to continue stubbornly on this path through to the arbitration hearing or trial in a courtroom. This kind of mistake was carved into stone by the late, great singer-philosopher Kenny Rogers, who crooned, “You’ve got to know when to hold ‘em, know when to fold ‘em.” This simple but catchy phrase is applicable to all trial lawyers, especially to construction lawyers. 

In the typical commercial construction dispute, there are scores of claims and an equal number of defenses. The best examples are defective work and change order claims. On a recent arbitration panel of which I was the chair, there were 38 claimed change orders – some seeking only money; some requesting time; and some seeking both money and time. But each change order had its own factual story, many times quite complicated. This is one of the reasons why construction disputes are so expensive as far as legal fees (and client time). As discussed in mistake No. 1 in this “mistake” series, the most important four issues in any construction dispute are the facts, the facts, the facts… and the facts. In turn, the defenses to such multiple claims can be equally factually complex. Many times, there are alternative theories: There was no timely claim notice; there was no defective work; even if there was notice and defective work, the client did not cause it; and even if the client caused it, the costs sought are both unnecessary or unreasonable or both. 

Credibility before an arbitrator or judge (and the jury), both for you as a lawyer and your client, is absolutely critical. If you have 15 claims and determine prior to the hearing that eight are extraordinarily strong, four are “iffy,” and three are extremely poor, the mistake is not “folding” the poor claims. The same goes for defenses. I cannot tell the young construction lawyers out there how many times, as an arbitrator, when bad claims/defenses are presented (through the same set of witnesses used for the strong claims/defenses), I have then questioned the credibility and viability of both the “iffy” and strong claims. This consequence applies equally to a party who stubbornly refuses to concede unopposed facts or portions of claims. Any attempt to practice scorched earth “litigation” tactics simply does not go over well in front of an arbitrator or judge. The best example in a construction context is when one side’s claims are less than the amount stipulated to be owed to the other side, but that side has refused to pay the undisputed amounts. 

Remember, while a judge or jury may not know anything about construction, a construction arbitrator does. The arbitrator is a construction industry expert, normally a very experienced construction lawyer, who has been through scores of arbitrations, both as counsel and as an arbitrator. Stubbornly sticking to losing positions, especially in arbitrations, is a grave error that will hurt your client’s chances of a successful arbitration outcome.  

Also, consider if raising a claim or defense is worth the time and effort. How much time do you have to put toward your case? I have had parties in a multi-day arbitration where the total claims exceeded $1 million spend three hours on a $1,000 claim when the total legal (and arbitrator) fees for these three hours may exceed $5,000. I have had a client go against my strict instructions to agree that a picture showed exactly what the other side was contending on a ridiculously small claim. Instead, he refused to do so. The other lawyer pounced on the opportunity. The arbitrator rolled his eyes, and it destroyed the client’s credibility and adversely affected the final result. His explanation to me afterwards was: “Oh, sorry, I just wanted to try to confuse that jerk of a lawyer.”   

To be clear, to fold a bad claim or defense you must fully educate and involve your client, and that can sometimes be difficult. The client is in charge and calls the shots. But there can be gobs of credibility gained with the arbitrator by strategically, timely, and tactically making concessions prior to and especially during a hearing. As Kenny wisely sang: “You’ve got to know when to hold ‘em, know when to fold ‘em, know when to walk away, and know when to run.”       

Listen to this post

I have practiced law for 40 years, with the vast majority spent as a “construction lawyer.” I have seen great… and bad… construction lawyering, both when on the other side of a dispute, as well as when serving well over 300 times as a mediator or arbitrator in construction disputes. To be clear, I have made my share of mistakes. I learned from my mistakes and was lucky enough to have great construction lawyer mentors to lean on and learn from, and I have tried to be a good mentor to young construction lawyers. Becoming a great construction lawyer is challenging, but the rewards are many. The following are the Top 10 mistakes I have seen lawyers make in construction disputes, and yes, I have been guilty of making all of them.

No. 1: It’s About the Facts…and the Facts…and the Facts

One of the best construction lawyers around, when asked to provide advice to young construction lawyers, said it best when asked about the four most important things to know about the successful practice of construction law. They are in this order:

  1. The Facts
  2. The Facts
  3. The Facts
  4. The Facts

This is not a typo. There is no other area of law, including commercial litigation, where there can be scores of factual issues (bids, change orders, delays, supplementation, liens, defects, default, pass-through claims, termination, etc.), each of which has its own subset of hundreds of additional “facts.” In most commercial litigation disputes, the dispute has already occurred. In construction law, many times we are asked to provide advice prior to an issue ripening into a full-blown legal dispute. Is there an ongoing issue on a project that merits a default and/or termination? What are the “tool-box” options available to a party to invoke? Gathering all of these facts, especially from an e-discovery standpoint, can be time consuming (and expensive), but is absolutely critical not only to representing and providing advice to a construction client, but also to trying to achieve a preferred result. That advice may prevent a later full-blown legal dispute or put the client in a better position to obtain a preferred result.

Many construction clients are not sophisticated in the organization and retention of project records. Employees come and go. Part of a construction lawyer’s job is to ask… and ask… and ask… and, yes, bug the client to make sure that all documents are not only preserved, but provided, reviewed, and analyzed. One of my own notable examples was a dispute in which I represented a contractor. Right before the start of a week-long arbitration, I was preparing the site superintendent to testify. And, yes, I had hounded the client to produce all project documents. While doing a mock cross-examination, he smiled at a question and said, “Well, I have that fact documented in my personal, daily project journal I keep on every project.”  My response was “WHAT the (expletive deleted)!” That journal had not been provided to me, much less to the other side, and certainly was not a hearing exhibit. I disclosed the journal, produced it immediately, and was able to use it (over objection, but that is one of the advantages of arbitration). It did not play a huge role in the final result (which was a win for my client), but I learned a valuable lesson from this “mistake” and never made it again. Remember, when on the warpath, search for ALL client project documents.

To be clear, the “law” is always a vital part of any construction dispute, both statutory and basic case law. Any good construction lawyer has to know the law and how best to present that law in conjunction with the facts to the decision maker. The oft-heard criticism of arbitration is that arbitrators do not care about the “law” as much as trial court judges. I disagree, but since most construction arbitrators are normally great, experienced construction lawyers, I have found that their adherence to the “facts” is manifest. Ignore facts that hurt your side or be surprised by “facts” that show up in document production at your and your client’s peril.

 Finally, at any hearing, the construction lawyer that has done his or her homework and knows the facts in and out is normally the most successful and persuasive. In a recent arbitration, one older lawyer was searching unfruitfully for an exhibit, when a young (well-trained) lawyer on the other side helpfully piped up saying, “Look at Volume 3, Exhibit 75.” That young lawyer knew the other side’s exhibits as well as his own. It was impressive. Was that enough to sway my final award? Of course not, but it did show me which side was more prepared and persuasive.

So, the moral of this mistake is to always, always remember: It’s. All. About. The. Facts.