Don't tell attorney Rafael Chodos that a down economy is a bad time to start a business, especially when his plan a dispute resolution service is designed to reduce the cost of litigation.
"When I saw the financial crisis hitting, I decided that this was the time to do it," said Chodos, a sole practitioner with an office in Woodland Hills.
So he launched Rent-a-Judge last month. The company charges disputing parties a flat fee of $10,000 $5,000 each to argue their case before a mediator during a one-day, eight-hour trial. Parties can pay extra if the session runs longer, but Chodos said the goal of Rent-a-Judge is to help the litigants resolve their dispute in one day or less.
For comparison, large private dispute resolution companies such as Jams and ADR Services Inc. charge upwards of $500 per hour, plus filing fees that range from several hundred to several thousand dollars. However, those proceedings often go on for days or even a week or more, and the final bill can easily exceed $10,000.
"With the Rent-a-Judge process, the whole idea is to get to the heart of what you are arguing about," Chodos said.
Chodos, 66, said he is targeting small and midsize business owners in disputes who want to reduce their legal costs, which have exploded lately because of such matters as the costly discovery process for e-mails.
"This program is an attempt to deal with the high cost of litigating smaller disputes, and getting them resolved at a cost proportional to the amount in dispute," said Mark Neubauer, managing partner of the L.A. office of Steptoe & Johnson LLP. Neubauer is a seasoned litigator who has been involved in numerous alternative dispute resolution sessions. He is not involved with Chodos' business.
Not all are impressed with the concept.
Mary Culbert, director of Loyola Law School's center for conflict resolution, said that both parties can specify a deadline for a dispute resolution procedure. "With any alternative dispute resolution mechanism, you can limit the time and what is considered."
Rent-a-Judge, like other such services, uses arbitrators who are approved by both parties. The sides in the dispute can choose whether the arbitrator's ruling is binding. In some instances, the parties will opt for a nonbinding ruling and use the session as a guideline for talks going forward.
Chodos has invested $40,000 of his own money to design a Web site, and plans to spend thousands more on advertising in the coming months.
He has an entrepreneurial background and went to law school after selling a software business he had started. His new venture is a way to blend his law career with his entrepreneurial impulse.
How did Chodos come up with the name Rent-a-Judge?
"It seems logical as a straight statement of what's going on here," he said.
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