The Biz of Baseball has an excellent breakdown of how Wandy's arbitration case will likely proceed. Read the whole thing, but let's pull this:
-The club and player representatives exchange their “exhibits”, usually in binder form. This allows each side to prepare for any rebuttals in the process. While players often attend salary arbitration hearings, it is not mandatory.
-The hearings start with a one-hour argument for the player making the case for the asking figure they are seeking.
-After arguments for the player, management then has an hour to make their case for their offering figure.
-The one-hour arguments are then followed by 30 min. rebuttals for each side (player goes first, then club).
-The panel of three arbitrators then rule, normally within 48 hours, as to which salary figure (player, or club) that the player will earn during the upcoming season. There is no middle ground.