From Disputes to Value: How Corporate Counsel Can Reimagine Conflict Management Through Process Design and Outcome-Focused Funding

Abstract

Corporate counsel today are expected to go beyond managing legal risk and reducing costs. They are being called upon to contribute actively and directly to business value creation. This shift requires a fundamental rethinking of traditional dispute management strategies, as litigation and arbitration-focused approaches are often too slow, costly, uncertain, and damaging to relationships. External law firms, while focused on helping their clients to win their disputes, may not be sufficiently familiar with their broader commercial objectives or internal dynamics. Their emphasis on legal positioning and victory can inadvertently lead to conflict escalation and overlook opportunities for collaborative resolution. This article proposes that modern legal departments can generate greater value through early conflict diagnostics and tailored dispute resolution design, using a new generation of Appropriate Dispute Resolution (ADR) professionals and mixed-mode processes, including combinations of mediation, conciliation, expert evaluation, and arbitration. These processes should not be viewed as alternatives to one another, but as complementary tools that can be used sequentially, in parallel or in an integrated manner to enable collaboration and accelerate resolution timelines. These approaches can be supported by using innovative funding mechanisms to help manage disputes more efficiently and strategically, not through traditional litigation funding, but ADR funding, which facilitates early convening, helps assess procedural needs, and supports the design of bespoke processes to reach mutually acceptable outcomes within 3 to 6 months, and at a fraction of the cost of litigation or arbitration. This article explores how in-house counsel can turn potential disputes and business risks into business opportunities, enhancing brand value, improving financial metrics such as Internal Rate of Return (IRR) and Working Cost of Capital (WCC), and advancing compliance with Environmental, Social and Governance (ESG) principles and the United Nations’ Sustainable Development Goals (SDG). In doing so, legal departments can shift from being perceived as cost centres to strategic partners, contributing to long-term value creation and organisational stability for both shareholders and staff.