[LinusKS]

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The firm could have gone out and gotten their own arbitrator/judgement mill to sell them a favorable judgement, but they didn't. Why not?

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There are two different ways to answer this question. The first is to point out that when people go to arbitration, they do it because they don't want to go to court.

I want to be clear about this - I have nothing against arbitration. I also have nothing against pre-trial negotiations. But the reason why people settle out of court - and why they agree to arbitration - is because they know that if they don't, the issue will be decided by a judge, and that the judge's decision will be binding, and that they might get less (or lose more) than they would by negotiating, or through arbitration.

In other words, it's the fact that there is a trial, and a verdict, at the end of the line that creates the incentive for people to settle, and to agree to arbitration in the first place.

The other way to answer it is to ask a different question: why is it that (for example) Pennzoil v. Texaco was not settled by the Better Business Bureau? Why did Bush go to the Supreme Court in Bush v. Palm Beach Co., rather than to an arbitrator?

The Better Business Bureau is fine if you're having a dispute with your cleaning lady. It's not so great if you're trying to decide a serious issue, or if (for example) you're charged with a crime.