Midlands-based and northern firms are reluctant to point their clients towards mediation, claims a joint report by the Centre for Dispute Resolution (CEDR) and Dibb Lupton Alsop.
CEDR's survey of 1,500 top companies in the Midlands and the North suggests lawyers still see mediation as the "weak" option.
The survey has found that 61 per cent of respondents had not received advice from their lawyers on the possibility of using mediation.
However, since 75 per cent believe mediation has a significant role to play in resolving disputes, the report suggests firms are out of touch with their clients.
Companies are keen to try mediation - 96 per cent want the courts to suggest mediation prior to trial and 68 per cent want it introduced prior to proceedings.
CEDR director of alternative dispute resolution services Bill Marsh warns that if firms fail to discuss mediation with clients they may fall foul of the Woolf rules.
"The legal profession still has a long way to go," he says. "The new civil procedure rules will encourage parties to use mediation, but we are still some way off our desired level of awareness among potential users."