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Put it in Neutral

Next time you're in a dispute, don't litigate--mediate.

In the ordinary course of business, a lawsuit is the course of last resort. Litigation is expensive, time-consuming, mean-spirited and often unfair. Mediation offers a better way.

Mediation is a lot like negotiation, but with a moderator. The mediator is a neutral party who helps the disputants fashion their own settlement. Unlike a judge or a jury, a mediator cannot bind either party. Nonetheless, mediation is astonishingly effective. Studies show high satisfaction rates and that mediated settlements are more likely to hold than litigated ones. Some experts say mediation is successful 80 percent of the time. It's certainly cheaper and faster than going to court.

It's not hard to find a mediator these days. In the U.S., there are hundreds of public mediation centers and numerous for-profit dispute resolution services that also mediate. Get a mediator who is even-handed, experienced and skilled. There's no universal credential, so shop carefully. Be wary of former judges; they can have a heavy touch and may lack diplomacy. If it's a technical dispute, get a specialist.

If you opt for mediation, bring a good spokesperson--someone with the authority to settle, such as an arbitrator, or even someone the other side really wants to engage. Take it easy with your opening statement. In mediation, calmer is better.

A speaker and attorney in Los Angeles, Marc Diener is author of Deal Power.

This story appears in the January 2007 issue of Entrepreneur. Subscribe »