The cost of conflict represents a resource drain of huge proportion and a source of great unhappiness and discomfort.

I appreciate being able to handle this matter without investing any more time, effort and money than was necessary. ~ Satisfied Client

Twenty percent of Fortune 500 senior executives' time is spent in litigation-related activities. Imagine the tally that adds up to on a macroeconomic level. It's commonplace for legal fees to exceed the value of the amount at stake. Years ago, if a situation had more than $100,000 at stake, litigation was a viable alternative. Today the benchmark is $1 million and growing quickly. Following this paradigm is very costly! It is something lawyers might think about in terms of client relationships, client satisfaction and firm management. This large cost of conflict represents a resource drain of huge proportion and a source of great unhappiness and discomfort.

Why So Expensive?

Traditional court systems, what you may think of as the usual way of resolving conflicts, do not foster resolution. Their operative premise is that someone will win. Our dispute resolution machinery often fuels the fire of conflict and impedes real resolution. Worse, while engaged in the conflict resolution process, productive activity, what one’s life is really about, is diluted. The traditional system does not foster resolutions that address the underlying sources of conflict-breakdowns in relationship. (If relationships had not broken down people would resolve things by themselves!) Unfortunately the process is not designed to get people back to their optimal state of productivity.

The system embodies struggle, control and a survival of the fittest mentality. It is based on dialectic, right/wrong, either/or patterns that originated in Aristotelian logic. Even though we live in a densely populated, rapidly changing technological world that cries out for systems that foster collaboration, individuals and institutions tenaciously cling to old habits. Elected representatives often believe that we can legislate ways of treating each other. Often the knee-jerk response is to enact a new rule or regulation in response to a problem. This does not work. The standards essential for a functional social fabric cannot be legislated. What are missing are the bedrock ethics and values that were taught by the educational community and religious institutions, and were fostered in extended families. These values have become clouded in our modern, mobile, sound-bite techno-society.

Because family structures and religious institutions have become so fragmented, we no longer rely on them to provide the education of core values. Many people seek external standards that will tell them what to do. People often have little grounding in collaborative skills because real partnership flows from within the "covenantal" relationships that community, family, and religious institutions have traditionally demanded and fostered. Many people have no role models and sadly, in many instances, don't know how to treat each other from within a common covenant. This is where lawyers can help with interventions that look at situations through an extra-legal lens.

Noted futurist Alvin Toffler, author of Future Shock, The Third Wave, and Powershift, has said: “The place we need really imaginative new ideas is in conflict theory. That's true with respect to war and peace, but also it's true domestically. The real weakness throughout the country is the lack of conflict resolution methods other than litigation and guns."

Toffler is on the right track. Our current situation is caused by both the aspects of today's conflict resolution system and the way that it is administered, such as:

Increase in the body of statuary and case law reflecting the growing numbers of lawyers, and complex transactions requiring regulation.

• Commercialization of the legal tradition fostered by competition and advertising.
• Growing reliance on counselors and therapists who care for our internal conflict and feed our conflict-avoidance mentality.
• Breakdown of trust and the inability to assess the value of, or need for, specific actions that therapists or lawyers take (evidenced by growing malpractice claims).
• Attorneys' conflict of interest because their practice of hourly billing results in a devotion to process, not results.
• The growth of the contingent fee and a class of cases in which there is nothing to lose by taking a chance.
• The myth of finding truth and justice in a courtroom, a myth that has been perpetuated by the role models celebrated on TV.

These reasons are symptoms. They evidence a breakdown in the covenants of trust between people who are members of the same "community." They point to a lack of communication. People are focusing on themselves. They are concerned about their "rights" and "entitlements" without thinking about their responsibilities toward others. This all flows from the win/lose systems and practices that are in place.

Many people are looking for guideposts and rules that will tell them how to treat each other. This requires new practices and new ways of thinking. Before discussing them, let's examine the cost of doing things the present way which might have the effect of waking people up to exploring alternatives. As we review the different costs, imagine how much more you might accomplish if you could harness the resources expended, the money and energy used in the battle of traditional conflict resolution. Imagine using those resources to produce the outcomes more palatable to everyone. Imagine lawyers as advocates holding an awareness of the real cost of conflict.

The Cost of Conflict

The cost of conflict is composed of the following:

1. Direct Cost: Fees of lawyers and other professionals
2. Productivity Cost: Value of lost time. The opportunity cost of what those involved would otherwise be producing.
3. Continuity Cost: Loss of ongoing relationships including the "community" they embody
4. Emotional Cost: The pain of focusing on and being held hostage by your emotions

Direct Costs

Because of an inability to face conflicts, many people spend money they can't afford on professional gladiators hired to do their bidding. A divorce between two people whose only asset is their home can transform that residence into legal fees. The process brings out the worst in people who thought enough of each other to marry, but now can't even sit down and talk.

Productivity Cost

Time is a valuable, limited commodity. When people are focused on rehashing the past, they cannot create and produce value in the present. There are two aspects of this cost-direct loss and opportunity cost. The direct loss is the value of a person's time-what the person should be earning but is not being paid because he or she engaged in the conflict. The opportunity cost is the value the person might have produced if his or her energy was focused on creation and innovation.

Continuity Cost

Continuity costs are the costs that result from the inability to let go of conflict and the need to end business relationships. The best example is the real cost to an organization of the need to terminate a managerial or professional level employee. The next time you cavalierly

suggest terminating someone remember that the real cost to fire, find and get someone new up to speed is in the neighborhood of 1.5 – 2 times annualized salary. That is a huge number!

Emotional Cost

This factor is challenging to place a number on…but it is an important component.

Conclusion

Current attitudes and systems of conflict resolution foster conflict. Conflict is very expensive. It consists of the following, never to be recovered, costs: (1) direct cost-professional fees; (2) opportunity cost-what would otherwise be produced; (3) continuity cost-the loss of relationships and "community;" (4) emotional cost-the pain of being held prisoner by emotions. Before you step into a litigation mind set, weather on behalf of a client or within your law firm consider the real cost of demonstrating you are right and decide if it’s worth it.

Reflection

Think about the "expensive" conflicts in your own life. What was the direct cost? The cost of professionals? The opportunity cost? The emotional cost? The relationship cost? As you reflect on your situation, think about the different actions and results you might have had if you had taken a different tack. How might you do it differently next time? How would your life be different?

  Adapted from "Getting to Resolution: Turning Conflict Into Collaboration" by Stewart Levine. Copyright 1998. All Rights Reserved Worldwide (used with permission).