Should arbitrators and mediators attend law firm Christmas parties?

While I don’t mean to be a Grinch, and I’m no fan of saying “Bah Humbug,” I am here to advise arbitrators and mediators to stay away from law firm Christmas parties this week.

This coal-in-the-stocking advice grows out of Formal Opinion 2023-024 of the California Supreme Court Committee on Judicial Ethics (Aug. 29, 2023), in which the Committee was asked “whether a judicial officer may accept an invitation from a for-profit law firm to attend its 50th anniversary celebration, which will take place at the law firm’s offices and include complimentary food and beverages.” (p. 1)

The answer? No.

While this seems harsh, 2023-024’s reasoning and the social psychology behind it support the conclusion. And it easily extends to the Christmas parties law firms may be holding this week. So, sitting judges will be declining those invitations.

Arbitrators and mediators ought to be subject to this rule as well. So don’t expect us to attend law firm Yuletide feasts either.

The reasoning of 2023-024 extends to far more than dinner parties. The unanswered question is just how far arbitrators and mediators should extend that reasoning before it is reduced to the absurd.

What was 2023-024’s reasoning?

The heart of 2023-024’s reasoning is on Page 6 of the Opinion:

“In the committee’s view, attending a law firm’s 50th anniversary celebration may suggest that a judicial officer has a special relationship or close association with the law firm. This may cause an observer to reasonably question the judge or court’s impartiality in cases involving the law firm or suspect that the law firm has special sway or influence over the judicial officer in carrying out judicial decisions. For these reasons, the committee advises against attending a law firm celebration under the circumstances presented here.”

At Page 7, 2023-024 states that judicial officers may not accept gifts from lawyers or law firms, and that “(f)ood, beverages,” and other “tokens or favors” are gifts. At Page 8, it continues, there are no exceptions to this ban for “nominal” gifts. The acceptance of any gift disqualifies a judicial officer from sitting in any case involving that lawyer or law firm.

This is harsh. No food, beverages, or other tokens or favors, even those of nominal value.

2023-024 concludes, at Page 9, “Gifts from lawyers are inherently wrong and have a subtle, corruptive effect, no matter how much a particular judge may feel he is above improper influence.” (Cleaned up.)

This is stricter than the standard mediators commonly use, Standard II B., “Impartiality,” of the ABA Model Standards of Conduct for Mediators (2005):

“A mediator shall conduct a mediation in an impartial manner and avoid conduct that gives the appearance of partiality…

“3. A mediator may accept or give de minimis gifts or incidental items or services that are provided to facilitate a mediation or respect cultural norms so long as such practices do not raise questions as to a mediator’s actual or perceived impartiality.”

Considering the more nuanced conclusion of the ABA, we must ask: Is the severe standard of Opinion 2023-024 warranted? A strong case says it is.

Does social science support this severe standard?

Yes. Consider Chapter 2, “Reciprocation,” of Arizona State University Professor Robert B. Cialdini’s magnum opus, “Influence: The Psychology of Persuasion” (New and Expanded Version, 2021, Harper Business).

Cialdini explains how even token gifts can trigger an outsized sense of reciprocity: “A small initial favor can produce a sense of obligation to agree to a substantially larger return favor.” (p. 47.) He describes how easily people are triggered into outsized reciprocity by such tokens as greeting cards, candy, Starbucks gift cards, or a supermarket sample of cheese. Cialdini admits he has been influenced by the tiny return-address labels charities include with their solicitations. So, have I. Maybe you have, too.

The ease with which even token gifts can generate reciprocity readily translates into a suspicion of favoritism and corruption.

Consider this hypothetical: At the airport, a San Francisco Giants fan recognizes two people next to each other in line for coffee. One is Dave Roberts, manager of the Los Angeles Dodgers. The other is Hunter Wendelstedt, the umpire scheduled to call balls and strikes that night when the two teams face off. When they get to the front of the line, Roberts pays for Wendelstedt’s cup of joe. Even at jacked-up airport prices, it’s a token gift. But does it make the Giants fan raise an eyebrow anyway? Q.E.D.

Cialdini does argue there are ways to counteract the relationship between token gifts and outsized reciprocity. But they are effortful, run counter to human nature and social convention, and are therefore hard to trust.

So I concur with Cialdini’s citation of scripture: “And thou shalt take no gift; for a gift blindeth them that have sight and perverteth the words of the righteous.” Exodus 23:8 (Influence, p. 42).

How does this apply to arbitrators and mediators?

The gift ban should apply to arbitrators and mediators. How far it should extend beyond the provision of food and drink at a party, though, is terra incognita.

With respect to arbitrators, it’s a no-brainer. Arbitrators have coercive authority to decide cases just as sitting judges do. Indeed, given the limited scope of judicial review of arbitral awards, arbitrators may have even more power than judges. The reasoning of 2023-024 should apply. No law firm Christmas parties for any anyone who wants to serve as arbitrator for the hosting firm!

What about those neutrals who serve solely as mediators? Should the Christmas party ban apply to us as well? Here too, a strong case says so.

While mediators have no coercive authority, we nonetheless affect outcomes. People come to us when they have been unable to settle and expect us to change that status quo.

As proof, consider the Mediator’s Proposal, a common closing technique. Facing intractable impasse, the mediator proposes a take-it-or-leave-it settlement between the plaintiff’s last demand and the defendant’s last offer. The sides confidentially tell the mediator “yes” or “no.” If both sides say “yes,” the mediator announces the agreement. If either side says no, the mediator announces “no deal.” Anyone who says “no” never learns how the other side responded.

In many dollar negotiations, there’s not just one number to which all sides might say “yes.” There’s a range. The mediator, however, proposes just one number. Where in the range will the Mediator’s Proposal fall? If the mediator has gone to one lawyer’s Christmas party, is the mediator subject to the improper influence of reciprocity? Will the mediator tilt toward that host? How would you answer that question if you are the other lawyer?

To me, the upshot is obvious. I don’t want to invite the powerful pull reciprocity has on my objectivity and neutrality. My decision is to decline invitations to law firm Christmas parties this year.

How far should the gift ban go?

Some things are obviously prohibited. Other situations are murky. Let’s begin the discussion.

If law firm anniversary and Christmas dinners are out, other sorts of dinners should be out as well. Arbitrators and mediators should not allow law firms to buy their tickets to bar association or charity dinners. Could neutrals buy their own tickets and sit at a law firm’s table? I think so, though an observer may still infer undue chumminess. The same reasoning should apply to theater and sports tickets.

How about attending a law firm’s in-house CLE programs? They generally include food and drink, so it’s probably best to avoid them. There are other ways neutrals can fulfill their CLE requirements.

What if a law firm invites a neutral to present a CLE program in-house? Educating lawyers and the public is a legitimate part of an arbitrator or mediator’s mission. After 2023-024 was issued, I received such an invitation. I presented, but did not claim CLE credit and insisted they invoice me for lunch. I also declined a parking validation – and in pricey Los Angeles, that’s no token expense! They sent me an invoice for the meal, I paid it, and I felt ok.

A more ticklish situation involves law firms providing conference rooms for mediations. Is that a gift to the mediator? It relieves the mediator (or the mediator’s company) from the need to provide space. But since the rooms are “provided to facilitate a mediation,” it seems allowable under the ABA Model Standards.

Plus, the rooms are not solely a gift to the mediator. The host lawyers are also providing the rooms for their convenience, to facilitate access to files, and to foster their ability to multitask. The guest lawyers also benefit from having a place for the mediation.

Finally, the ability of law firms to provide space for mediations helps younger mediators enter the field. Younger mediators, early in their neutral careers, are less likely than their elders to be on an ADR company’s panel, and thus less likely to have access to a company’s suite of conference rooms. If younger mediators don’t have to rent expensive conference room space, it removes one barrier to entry. These younger mediators are also likely to be more diverse.

My own decision is to continue to allow law firms to host my mediations. I no longer let them validate my parking, though. As for meals, it’s awkward to refuse the lunches many law firms provide. And these firms’ kitchens often have complimentary drinks and snacks – forbidden “nominal gifts” which I nonetheless would like to enjoy. My solution? I inform everyone that, because of 2023-024, I will reimburse the host firm for the cost of lunch and snacks. Then I don’t worry about eating a salad, noshing on an apple, or drinking a bottle of water.

In 2024 and beyond, we will continue to explore how neutrals and lawyers should interact in social and professional settings. Must neutrals avoid every peppercorn of value a lawyer or law firm might provide other than the fee for service? While we always want to be ethical, we don’t want to be absurd. Together, we’ll find the balance.