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Business, Physical and Financial Plans


It is possible to work without a plan, just as it is possible to jump out of an airplane without a parachute, there just is seldom any reason to do so.

A PADR (Private Alternative Dispute Resolution Center)'s plans should cover the promotional or marketing goals, the physical plant and the financial structure.


The overall plan is really a business plan.  The sub-set that is often thought of as "the business end" is the marketing program which, for a PADR, is really education of the market.  The marketing and education goals should be set in-line with the outline provided for ADR Centers -- Initial Considerations for a Private Center which provides a good place to start.  The goals should be set in three different terms:

  1. Time spent on the area.
  2. Results expected in the area.
  3. Progression in the area.

Time spent is basically the equivalent of billable hours that the principals of the PADR intend to devote to marketing efforts.  In planning for a PADR it is important to realistically set time goals for time to be spent promoting the project and to assign duties to each person in terms of both time and of actions to be taken.

Progression in marketing is an important concept.  As the center and the community mature in their appreciation for ADR, it is important that the marketing plan mature or progress in its application.  A media interview every month is a goal to which a PADR might allocate time.  Getting one every month is a matter of results that can be tallied.  Progression means that the media interviews need to go from "this is what ADR is" to "this is how we are applying ADR to the community benefit" to "this is the progress the PADR has made" to "this is a newsworthy matter that happened at the PADR."

The same is true of the advisory councils (note how the article covers the three groups that need to be brought in, over time, and how they interact.  A PADR would assign time, goals to be reached in terms of members, and progress to be made in terms of the type of members).

Finally, there are three types of results to be measured.  First, are the simple ones.  E.g. goal:  media interviews or goal: advisory council members.  Tangible, direct, easily noted goals are important.  Second, impact goals.  E.g. media interview that generated calls or interest.  Council members that gave good advice or led to referrals.  Finally, third, business plan goals -- does the marketing translate to success for the PADR?

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Physical Plans

These are basically the plans for the premises -- meeting the physical needs for successful mediation.  They may range from simply renting two offices and access to a conference room to elaborate plans.

Below is a simple floor plan for a PADR/etc. office.  It contains four offices, with small client conference tables, a reception area and two larger conference areas and is modeled after PADR plans for an area where office space was very inexpensive.  Several of the basic concepts are useful.

First, all of the offices are separated by some sort of space/sound barrier.  If the offices are used for mediation sessions, even if no conference rooms are available, the sessions still remain private from each other.

Second, the two conference areas are separated as far as is possible to provide the most available privacy and confidentiality.

Third, the office is set up so that the offices need not be used as a part of the mediation process.  While it is extremely common for mediators to use their personal office and a conference room, it can provide a needed respite if the parties are in conference rooms and the mediator has an office to recover in.

Fourth, the space provides for more than two parties in a mediation session.  (In theory, if every office and conference area is used, up to six parties can participate in a mediation in this setting).

Fifth, the space allows for the reception area to steer parties directly to conference rooms and for some physical separation of the parties prior to the beginning of mediation.

The layout is not perfect and has flaws -- but it is provided as a place to help those considering a PADR think about what they need to take into account when they work out the design for their PADR.

PADR Floorplan

As a post script, assuming you have not created procedures, forms, training approaches, and such, these should also be put together as a part of the "phyiscal" plan of your PADR.

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Financial Plans

It is possible to self-finance a PADR from an existing law firm.  Even if a PADR is not self-financed, it can be very helpful to anchor it on an existing law practice.

However, given the depth of time, effort and focus that a PADR requires, it is important to prepare and consider financial plans.  There are five elements to consider.

First, work out the time requirements of your PADR.  Unless you have partners whose time is available (from a dearth of billable hours), you will need to seriously consider allocations to cover the hours that a PADR will take to establish. Similarly, various promotional costs (meals, etc.) need to be budgeted and planned for.  Finally, traditional business plan efforts are extremely valuable for deciding on everything from the physical plant extensions (not every office starts out ready for ADR support) to secretarial and other needs. (visit your local Small Business Administration office for more background)

Second, consider the financing available.  PADRs often qualify for substantial grant-in-aid assistance (especially in areas with substantial school yard violence, gangs or international evolvement), subsidies (see the SBA for subsidised loans, etc.), Court affiliated center status and support (anything from discounted or free rent to staffing, referrals and base salaries) and other non-traditional (i.e. other than just talking to your banker) financing.

It is important to have a completed business plan before approaching any of these groups for money whether it be a grant, subsidised loan or affiliation assistance that you are seeking.

If a PADR has a joint focus (such as also being a Child Advocacy Center or also serving as a Juvenile Offender Mediation Services provider), that will often increase the funding venues available.  Working as a part or, or in affiliation with, a University can also do the same thing and result in subsidised space, costs and marketing.

Finally, you may want to provide just the situs -- a location for mediation rather than the services.  Reducing the scope of what you do can be as successful as increasing the scope.  Several PADRs exist as basically business suites for rent for the use of  mediators who are attempting to lower their overheads.  A PADR can be "just" several conference rooms, scheduling, and an answering service for community mediators and be quite successful.  So, in addition to considering "more" also consider "less."

Third, run a financial for the cost of the PADR as if it was being prepared and launched independently -- from the ground up.  This will give you an idea of comparative cost and is extremely useful.  That is, calculate:

  1. The cost of the office space (whether or not you currently have it and are using it for other things);
  2. The cost of the staff (whether or not you currently have staff and are using them);
  3. The time cost of promoting the PADR (as if you were paying someone else by the billable hour).

For example, if I were to launch a PADR from the law offices where I practice, I would calculate the cost of the conference room, two or three of the offices here, the use of the other conference room and the receptionist's salary.  To that I would add my billable hour charges as well as the "obvious" costs of business cards, stationary, etc.  While I would not be paying extra to use any of these facilities (the offices, conference space, etc. are not going anywhere and are already being paid for), and I don't bill myself for time used (due to the current tax structure), that base number will give me some very useful perspectives.

Fourth, realize that reserves need to be set, and should be set using the base number calculated from step three above. You do not want to be undercapitalized and reserve funds are much easier to get when you do not need them than when you do.

Fifth, plan an exit strategy for what you will do if, for some reason, your PADR does not perform as you expect. Perhaps five other groups will start PADRs.  Perhaps you will mediate so successfully that the backlog of people needing the services of a PADR will disappear.  Perhaps ...  I'm only aware of successes in the PADR setting so that my examples of why a PADR might fail to generate sufficient revenue is somewhat limited.  However, my experience and training tell me that anyone considering a PADR needs to plan an exit strategy for "just in case."

It may be anything from reverting to a law practice (if your PADR is co-terminant with a law practice in physical space and staff) -- and writing off the time exerted to some other exit strategy, but you need to consider one and when you would use it.

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Private and semi-private Alternative Dispute Resolution Centers have been successful from Amarillo to Houston.  They offer an excellent approach and struture for alternative dispute resolution.  With proper planning, a PADR can be as great a success as ADR has been.

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Copyright 2000 Stephen R. Marsh [home]

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