What Are Typical Rates and Fees for Mediators? - dummies

What Are Typical Rates and Fees for Mediators?

By Victoria Pynchon, Joseph Kraynak

Mediation rates and fees vary from as low as nothing for pro bono work to upward of $20,000 a day for commercial litigation. What you can expect depends a great deal on two factors: the arena in which you choose to mediate and the level of demand for your services.

As for the arena, community mediation is at the low end and commercial litigation is at the high end. As for the demand for your services, the more prestigious the clients and the more prominent your background, the higher the rates and fees you can and should charge.

Because the legal market is so stratified, if you’re an attorney or former judge entering the litigated-case ADR (alternative dispute resolution) market, take a look at your location and market, and figure out what dollar amounts fit in each of these categories:

  • Low end: What solo practitioners charge usually represents the rate for the low end of the free market.

  • Mid-range: Check out what the mid-level panels charge.

  • High end: Look at what the people at the Judicial Arbitration and Mediation Service (JAMS) charge. If you’re not an attorney, set your fees according to your market’s ability to pay you, what your fees were in the pre-mediation practice you were engaged in, or the value you provide to your market.

Typically, commercial litigation in specialty areas including antitrust, intellectual property, securities fraud, unfair competition, and all “bet the company” cases pay the highest rates, involve attorneys from the most prestigious AmLaw 200 law firms (the “Fortune 500” of the legal profession), and have the most dollar value in controversy. In the California market, the commercial litigation numbers look like this:

  • Low range: $200-$350 an hour

  • Mid-range: Between $500 and $600 an hour

  • High range: In the $10,000 to $20,000 per day stratosphere

Mediators who serve the general public often charge between $100 and $150 per hour, and you shouldn’t charge any less than that. Each party pays only half, so that’s $50 to $75 per hour per party, assuming two parties are involved. If more parties are involved, the per-party cost is even less.

As you’re getting established, aim for the average. If you price yourself too far below the average, you won’t get your foot in the door, and if you price yourself too high, you’ll have trouble attracting clientele.

After a year or so, you’ll have a much better read of the market segment you’re actually serving. You’ll know how much people can afford to pay and how much money you’re saving them by ending their dispute.

Some mediators tack on to their rate a flat administrative fee to handle correspondence, parking, postage, and conference room expenses. Again, check your local market for the size of that fee. If everyone else is charging it, you should charge it too.

Don’t try to compete on price by undercutting the competition. That’s bad for the profession and could backfire. Many mediators discover that they must raise their fees to be a credible presence in their market, even when they’re just starting out. If you set your rates and fees too low, prospective clients start to think that you must be a lousy mediator.