TIME IS NOT “FREE”: SOMETHING TO THINK ABOUT
Benjamin Franklin once said “Remember that time is money.” (Advice To A Young Tradesman.) In a May 29, 2002 article on the Sci-Tech web page of CNN.com, a formula created by Economic Professor Ian Walker of Warwick University in England demonstrated that “time is actually money.” More specifically, he concluded that in 2002 the average minute was worth approximately 15 cents to men and 12 cents to women. The formula is: V= (W (100-t/100))C, where V is the value of an hour, W is a person’s hourly wage, t is the tax rate and C is the local cost of living. To calculate the value of your time, click here
In a more recent article (published on August 30, 2004) on the web entitled Time Isn’t Money, Erica Okada, a University of Washington assistant professor of marketing, and Stephen Hoch, professor of marketing at the University of Pennsylvania Wharton School, discuss their study (involving 360 undergraduate students) that revealed “that the concept of time is easier to write off than is money.” (Id.) While people “are relatively certain about how much their money is worth,. . . when it comes to their time, people are less certain about its value.” (Id.) That is,
“. . . consumers are used to transacting primarily with money and are accustomed to assessing its value. . . . The average consumer in today’s world hasn’t learned how to assess the price or value of time.” (Id.).
So what does this have to do with mediation? A great deal. Throughout the United States and especially in Los Angeles County, many mediators – including this blogger – provide their services on a pro bono or free basis to certain types of court cases. Many times, precisely because the parties are not paying in cold hard cash for the services of the mediator, they do not take it seriously. They come unprepared, or without all of the parties needed to reach a settlement or without the necessary settlement authority or they come quite involuntarily in that they are appearing simply because they were “ordered” to do so by the court and have no intentions of resolving their dispute.
Because the mediation is “free”, the parties have not placed any value on it. Like the average consumer, the parties in a “free” mediation have not learned how to assess the price of time. They have not applied Professor Walker’s formula to calculate how much not only their time is worth but that of the mediator’s as well. They do not realize that both they and the mediator are giving up something of value. As a result, they are nonchalant or dismissive about the whole matter and do not take it seriously. Like the students in the study, their level of satisfaction does not markedly depend on the outcome since they are not paying in cash but only in time. They do not realize that time really is worth something; that there is no such thing as a “free” lunch much less a “free” mediation.
Everything does have a cost: even pro bono mediations. Just apply Professor Walker’s formula to figure it out in real dollars and cents.
. . . Just something to think about.
