Mediation Costs: Fees and “Flat Rates” and “Per Diem Caps,” Oh My!

On a recent call, a potential customer asked about costs of mediation.  It is a question that comes up all of the time.  I began to feel a bit like a cell-phone sales person, though.

Like most mediation firms, One Mediation’s mediators have different hourly rates that reflect their experience.  On the other hand, One Mediation also has mediators who offer a “per diem” cap on their mediation fees which is somewhat unusual.  Another mediator associated with One Mediation also offers a “flat rate” for her mediation services based upon the value of the dispute. 

All these “pricing programs” can be like sorting through the cell phone plans with unlimited minutes, additional lines, etc.   Don’t panic!

The short story of mediation expenses is pretty simple – there is “Traditional” billing and “Alternate” billing.  Traditional billing involves the parties paying their portion of the mediator’s hourly fee for the time the mediator spends providing them services.  In other words, if the mediation takes three hours and the mediator’s hourly fee is $200, the total bill for all parties will be $600.00 which is evenly split between the parties. 

Sometimes the mediator’s fee is split up differently because the parties have agreed to a different formula.  Additionally, in many settings, one party may agree to pay the entire mediation fee as part of the resolution.  A starting point, however, for mediation costs is to plan on splitting the fees evenly across the parties.

Alternate billing involves things such as “flat rates” and “per diem” caps.  A “flat rate” is a set fee that is paid to a mediator for any and all services rendered in facilitating the mediation of a particular dispute.  A “flat rate” has no correlation to the mediator’s time spent on the dispute.  As such, the parties could mediate for one hour or ten hours, and the rate will be the same.  Generally, flat rate billing is fairly rare.

Another alternate billing format involves “per diem” caps.  In this scenario, a mediator may offer his or her services on an hourly basis up to a certain amount per day.  After that point, any mediation services will not be billed at the hourly rate.  For example, if a mediator’s hourly rate is $200 and his per diem cap is $1,000.00, then a mediation that lasts over five hours will not increase the cost of services provided on that day.  Some mediators are willing to provide such caps, and parties should inquire about them.

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File for Divorce or Mediate Before You Separate?

No one teaches you how to break up.  In love and war, emotions play high.  Often, a race to the courthouse to file for divorce can occur.  But, there is another way to break up that may not only be in the best interests of “the wallet,” but also in the best interests of any minor children involved.

Parties can file divorce on their own (or pro se), but more often than not, at least one spouse will retain an attorney.  The attorney’s retainer is rarely less than $5,000.00.  Not every couple has a spare $10,000.00 to spend on two attorneys – and the retainer is likely just the beginning. 

Sure, you’ve seen billboards that announce that attorneys will represent you for a few hundred dollars if the divorce is “uncontested.”  The second there is any dispute – holidays with the kids, the amount of child support, who gets the debt – it’s a contested divorce.  Simply put, it is the rarest of occasions that a couple’s divorce is uncontested, at least for the billboard attorney.

But, one way to set up an uncontested divorce is to mediate before (or during) separation – or at least before a petition for divorce is filed.  For about $1,000.00, a mediator can assist the couple with working out the details of their split – the debt, the assets, the children, the retirement, the house and furnishings, etc.  When couples have already gotten most, if not all, of these issues worked out on their own, they are well positioned to avoid a big legal battle that simply drains the pot of money that they are fighting over (okay, or usually are fighting over). 

Check out www.mediateB4Useparate.com for more information on mediation in the context of separation.  There is at least one other way to break-up, other than making a mad dash for the courthouse to file for divorce:  it’s Mediation.

New Panelist Teri Fields joins One Mediation

Teri FieldsTeri Fields began practice as a law clerk for the Bankruptcy Court for the Northern District of Alabama. She then went on to practice law in the Creditor’s Rights, Workouts and Insolvency Section at Burr and Forman, LLP in Birmingham, Alabama. Ms. Fields then moved back to her hometown of Atlanta, Georgia where she began practicing as an Associate in the Construction Law Group of Freeman, Mathis and Gary. From there she moved to the Georgia Department of Law where she served as an Assistant Attorney General in the Real Property, Construction, and Authorities section and conducted litigation as well as served as general counsel for several Georgia Authorities. In June 2009, Ms. Fields opened the Fields Firm which specializes in general civil litigation, estate planning and probate litigation. Ms. Fields joined Townes Davis & Associates in February 2010 where she has added personal injury and premises liability to her practice.

Mediation: Step-By-Step

Step 1: What to Expect
Prior to most mediation sessions, the neutral may hold a telephone conference with each party. This call is an opportunity for the neutral to give the party an overview of the process and to receive a brief summary of the dispute. Dates, times and location of the mediation will be confirmed. It is part of preparation for the session.

Step 2: How to Prepare
Before the session, parties should evaluate the strengths and weaknesses of their cases. Consideration should be given to providing information unknown to the other side beforehand or at the session if it would impact the other side’s own assessment of the case. Logistically, parties should clear their schedules to minimize distractions to the session.

Step 3: Joint Sessions and Caucuses
Usually the parties begin mediation together in a joint session led by the mediator. After an introduction by the mediator, each party often provides an opening statement about the dispute. Frequently, mediators then will move parties into separate rooms, and the mediator will “caucus” with each party. These caucuses facilitate the flow of information and offers between the parties to facilitate agreement.

Step 4: If Resolution Is Reached
If an agreement is reached, a document will be drafted that captures the facets of it prior to the parties’ departure from the mediation session. When parties have legal counsel, this document may include an agreement for the attorneys to prepare a more formal document that incorporates the mediation document.

The Value of ADR – Alternative Dispute Resolution

One MediationThe value of alternative dispute resolution is in the opportunity. Resolving a legal dispute outside of courts has many benefits, such as exercising some control over the outcome. Additionally, ADR also provides the parties the opportunity to control when the matter resolves, which may occur faster than waiting for a trial or a ruling on apppeal. One Mediation neutrals can assist you with maximizing these opportunities.

One Mediation neutrals are qualified professionals whose rates are reasonable. After neutrals confirm that they have no conflict with respect to the parties in a mediation, the scheduling the session is confirmed and can be done online. One Mediation provides online payment options for unrepresented parties. Additionally, One Mediation neutrals are available for certain matters on Saturdays. Meet our neutrals by clicking here.