Negotiating Anger: Why are They Shouting at Me????

Brilliant piece on de-escalating conflict over at Tammy Lenski's Conflict Zen this morning.  Teaser and link below:  

The friendly bailiff unlocked the small courtroom. After telling me to make myself at home, he pointed to a small red button on the wall. “If you need me, just press that button and I’ll be in here faster than you can blink and eye. It’s an emergency button.”

“Ok, thanks,” I replied, and began to unpack my briefcase.

“I mean it,” he said. “Just press the button. Maybe you should set up your chair so you’re near it.”

I gave him a long look. “You seem to want me to know about that button. Is there something else you want to tell me?”

Continue reading here.

New Negotiation Resources: Preparation, Preparation; Preparation

I'll add these to my blog roll when I'm not rushing out the door.  For now, check out Jonathan Farrington's Blog post on Negotiation - Dealing with the Early Phases, a resource I have to thank the Business Growth Blog for, cited at the end of more excellent advice on Negotiating:  Thinking it through

Here's a teaser to get you to the Business Growth post:

Remember that classic scene in "Erin Brokovich" where the high powered, electric utility law team shows up in force to negotiate with the small town law firm? Ed Masry sees them coming in and gets all his staff to file into the board room so they have more "lawyers" on their side of the table… and overpowers the power brokers.

Would you like to have a system that helps you think on your feet like that?

Here is a list of 8 questions you can ask yourself when you suddenly realize that you have to prepare for a negotiation. Use these to generate quick preparation for any negotiation.

For the list of 8, click here!

Thanks guys!  Great advice in both posts with more good negotiation resources at the end of the Business Growth Blog post.

Advice from Forbes.com: How to Negotiate Like a Pro

Because I'm in this Forbes Business and Financial Blog Network, I figured I should finally take a look around to see what useful advice Forbes.com might have for my readers.  And sure enough, a Forbes.com search turned up How to Negotiate Like a Pro from the Entrepreneurs column by Lisa LaMotta.  Below an excerpt and the link here.

Life is one negotiation after another, though too few of us are equipped for battle. Formidable dealmakers like Warren Buffett, Bill Clinton and sports agent Scott Boras tend to be born, not made.

Yet talk to negotiating pros from the worlds of government, finance and media and they'll admit there is at least some science to this art. Winning every point is rarely an option, of course, but if you keep a few principles in mind, you can tilt things in your favor--whether you're signing a peace treaty or just angling for a raise.

If you remember one thing about negotiating, it should be this: It's not the maneuvering once you're in the trenches, but rather the preparation before sitting down at the table that counts.

That means taking the time to define what you want, what you are willing to accept and at what point you will walk away. It also means doing enough research to know what the other side wants--and how far they are willing to go to get it.

Want to know more?  Click here!

 

Chicago IP Litigation Blog Hosts a Carnival of Trust

R. David Donoghue over at the Chicago IP Litigation Blog is hosting a new "Carnival" of Blogs that is new to me -- The Carnival of Trust.  

As David explains:

The Carnival of Trust is a monthly, traveling review of ten of the last month's best posts related to various aspects of trust in the business world. It is much like the weekly Blawg Reviews that I post links to and have hosted, but those generally contain far more than ten links. My job this month was to pick those ten posts for you and provide an introduction to each post that makes you want to click through and read more.

I'm ridiculously pleased to be included in the category of Trust in Leadership and Management along with Charles H. Green's Trust MattersGeorge Ambler's Practice of Leadership;  and Stephen Albainy-Jenei's Patent Baristas  (if they gave awards for blog template design, PB would win in my book every day of the week).  In this crowd I feel like Zelig!

Here's David's generous mention of the Settle it Now Negotiation Blog and my recent post on convincing your clients to give up more than you (their attorney) predicted while still maintaining your credibility.

On the subject of trust-based leadership, Victoria Pynchon at the Settle It Now, Negotiation Blog has an excellent guide for maintaining your client's trust during a difficult negotiation: How Can I Convince My Client to Lose More than Predicted and Still Maintain My Own Credibility? The answer is complex and multi-faceted, but it boils down to the fact that you have to get the stakeholders and decision makers face-to-face, get their buy in on resolution as a goal (in addition to winning), explore all avenues of resolution, and you have to let them explore all aspects of the dispute, even those that do not matter. The last point is a difficult one for lawyers. As a lawyer you generally want to remain focused on the settlement inputs -- money, confidentiality provisions, sale of existing product if something about the product is being changed, etc. -- but from a trust perspective it is important that the stakeholders resolve not just those issues that go into a final agreement, but any problems or concerns they have related to the dispute or the parties to the dispute.

And let me just add here -- though I'll sound like a broken record to my regular readers -- that business people seek out lawyers because they believe themselves to be victims of injustice. (see my short-short video on this topic here)

Though I, as a mediator, am always seeking business solutions to legal problems, the client's injustice problem must be addressed to maintain your credibility (and retain your client's trust.).  Every great mediator I know will address this issue with your client unbidden.  If you're using less than great mediators --  raise the issue yourself -- all competent mediators should be prepared to address the issues foremost on your client's mind right including -- Will I lose?  How much more is this going to cost me? and Am I Being Extorted or Low-Balled?

Thanks for the mention, David!  I truly am greatly honored.  But more than that, you've helped me reach greater numbers of business people with a message that I carry somewhat like an old-fashioned missionary -- go beyond positions; find the parties' interests; create value; claim as much of that value as possible; craft business solutions to a legal problems; and, frankly address your client's injustice issues.  They'll be yours for life.

Thinking Like a Mediator with TCL's The Human Factor

In the new issue of The Complete Lawyer, my fellow Human Factor columnists and I talk about what new tricks we had to learn and old skills we had to re-invent when we took the journey from legal to mediation practice.  I give you my section of the column below, encouraging you to link to the Human Factor here to read what my my good friends and colleagues Gini Nelson, Stephanie West Allen and Diane Levin have to say.

My first day of mediation training progressed in somewhat the same fashion as my first few weeks in Civil Procedure. I remember struggling with the theoretical bases of jurisdiction in Pennoyer v. Neff one day only to be told the following week that Pennoyer was no longer the law. “Why,” I remember thinking, “did we even bother with Pennoyer when this Buckeye case about an exploding boiler now seems to be the law? Or would it be replaced next week as well?”

Law school, which taught me to “think like a lawyer,” was the precise opposite of my new mediation studies. Now, it seemed, I was being trained to stop “thinking like a lawyer.” Still, mediation, like the law, was full of conflicting ideologies from which it appeared I was required to choose.

It was easy for me to be evaluative: I had 25 years of legal practice in my backpack. I learned Dr. Cialdini’s “Principles of Ethical Influence”—Reciprocation, Scarcity (the rule of the rare), Authority, Commitment, Empathy, and, Consensus. These power principles helped the mediator to “make the other side see reason” when called upon to do so.

But the evaluative style was not the only prescribed route to mediation mastery. There were many who favored facilitation. The facilitative mediator first creates an atmosphere of hope and safety before helping the parties locate areas of agreement and mutual benefit. Here, the mediator is a follower or helper on the path to resolution, like the protective figures who appear early in a hero’s journey to enlightenment.

You can’t immerse yourself in mediation for long before you hear the clamor of the transformative crowd. Facilitative mediators, say the transformative folks, too often present themselves as wizards who intrude upon the parties’ conflict with their own agenda—usually “resolution be damned, let’s settle this darn thing!” The transformative mediator lets the session wheel out of control if that is where it is eager to go. Conflict is not seen as a state to be avoided or suppressed. Like a loving mother following the course of her child’s flu, the transformative mediator provides the parties with encouragement, opportunities to rest, lots of fluids and a metaphoric place to lay their heads as the conflict runs its natural course.

When I first brought this tangle of methodologies to the few master mediators I know, they all made short work of it with the scalpel of experience. “You are the technique,” they instructed. “Just stay in the process. Don’t guess. Ask questions. Listen. Don’t give up before the miracle of mediation happens.”

Now, four years into a full-time ADR practice, I am still struggling to embrace the entire dispute—the business or people problem that found its way to an attorney because of the justice issues with which it was burdened. I often feel that I’m walking a razor’s edge. I will never stop “thinking like a lawyer.” Nor will I stop pursuing this new way of thinking—one that looks for the opportunity to finesse the legal impasse by using the problem itself as an opportunity to broker a deal.

Why mediation? For me, it’s simply a broader canvass on which to paint a new picture. How mediation? In baby steps, one after the other, in just the same way I learned to be a litigator and trial attorney. How can the Human Factor help with your own life and legal practice? Stick around. Miracles are common here. We think you’ll enjoy the ride.

 

Why Take a Negotiation Class in Law School?

(pictured, Harvard law School's winning Negotiation Team)

I could write an entire book on why law students should study negotiation as well as an entire chapter on why they should study texts written for MBA students rather than law students.  The latter topic I will cover in a future post.  The former has already been written succinctly as an article -- link and excerpts below.  

From Why Take ADR Courses In Law School by Cathy Cronin-Harris from the March 2008 issue of the Just Resolutions eNewsletter.

Cathy Cronin-Harris is Co-Chair of the Advocacy Committee of the ABA Section of Dispute Resolution. She's a Senior Consultant to the International Institute for Conflict Prevention & Resolution (CPR) and teaches Negotiation at Columbia Law School. She has taught at Georgetown and Fordham Law Schools, and has been an Administrative Law Judge and litigator. She can be reached at chadr5@aol.com.

Familiarity with Negotiation Approaches

[N]egotiation is a . . . . complicated process and demands a . . . . mind set that recognizes the inherent tension in negotiation: you must engage the other side in order to get to agreement while both sides are in a seeming struggle to achieve apparently conflicting objectives. That tension demands more subtlety than pushing [your opponent] into submission.

[E]xposure to negotiation theory and practice will help you understand "when to hold 'em," "when to fold 'em" and when and how to develop other feasible options and approaches beyond just holding out or giving in.

[Negotiation] courses stress the collaborative mode of negotiation or mutual gains bargaining popularized by Fisher and Ury in Getting to Yes. Its fundamental concepts stress objective standards, creativity, option development, respect for opponents and satisfying parties - genuine underlying interests rather than their positions.

Such exposure will expand your repertoire and allow you to negotiate with agility. You'll appreciate varying approaches people take to negotiation, discover ways to lessen competitive tendencies, become more conscious of options you can use rather than relying on raw intuition, appreciate the significant human elements impacting negotiation success, and learn the value of planning. As you become familiar with the broad brush approaches, you'll be enhancing the key skills below.

a. Expanded Communication Skills

In adversarial settings, assertion skills dominate: lawyers use logic, well-developed statement and presentation skills, tightly orchestrated cross-examination questions, and tools to connect with the trier-of-fact, such as compelling language, analogies and themes, to win the day. But when you negotiate, an additional set of communication tools comes into play along with asserting. Those skills focus on enhancing dialogue to solve the problem.

It's usually a challenge for lawyers to move from assertive statements to a wider band of communication skills. So negotiators learn to use better listening skills which includes confirming understanding of the other side's statements. They use open-ended questioning rather than restricted cross-examination formats to understand and dig out relevant information. They focus on body language and other signals embedded in communications that can provide information indirectly. They also refine assertion skills by ratcheting down the tone and format of statements to express needs compellingly without rancor. So negotiation will complement any communication skills learned in adversarial settings.

But beyond improving your negotiating ability in disputes, these skills will assist you in conducting your daily practice interactions including interviewing clients, unearthing their real needs and interests, advising them of your evaluations, enlarging their view of solution potential, calming them down, and in a host of other ways both professionally and personally.

b. Enhanced Persuasive Skills

The persuasion studied in most courses emphasizes logical rational analysis. Appellate judges apply it in every case based on the lawyers' logical presentations. Needed in negotiation? By all means. But persuasion to induce another to make a deal requires more. It includes your credibility, command of the subject, astute use of reasonable demands, varied questioning, and relationship building with the other side. We also persuade by showing our willingness to be persuaded: by meeting the other's needs and concerns and exploring a variety of options that might satisfy both entities rather than only pushing our agenda. And some psychological insights come into play about framing our requirements and anticipating likely reactions so we can make our offers more acceptable. While adversarial persuasion involves many of these tools, they are used to convince an outsider that you're right. Negotiation persuasion seeks to embrace your opponent, from whom you want something for yourself, and requires persuasive approaches we ordinarily don't consider.
c. Appreciation of the Role of Perceptions

Every trial lawyer knows that perception plays a role in the court room: it's not just about facts. Trial advocacy aims, in part, to shift the judge or juries' perceptions in your favor. In negotiation, we also deal with perception change efforts since negotiators, like everyone else, bring misperceptions to the negotiation table. They make assumptions, they suffer from partial or selective perception, and they tend to view the opposing side with suspicion. So, we seek to amplify those perceptions to remove the negative conclusions the other side draws from their misperceptions which impede willingness to find solutions. We clarify our intent that may have been misperceived; we demonstrate we're not just competing which they might have assumed; and, we suggest solutions to demonstrate regard for their concerns as well as our own. We explore hypothetical outcomes to induce a broader view of settlement potential. Even in making offers, we account for perception barriers in the way we state offers and use rationales to caste new light on their justifiability. We recognize that the way we use actual leverage or power can alter the other's perceptions toward or against us. Exploring these concepts underscores the important role that perceptual awareness plays in negotiation success.

d. Appreciation of the Human Dynamic

One can't effectively negotiate or help orchestrate it as a mediator without recognizing the human emotions at play in disputes. Emotions greatly affect receptivity to settlement proposals. Anger at past events, negative reactions to offers deemed insulting, absence of control over a situation or perceived lack of respect, attention or appreciation can derail deals. On the other hand, creating a positive emotional environment by building trust, building relationships across the table, and acknowledging the other's emotional state can alleviate some of the negative feelings in negotiation. These courses will highlight the need to consider the human element whenever you deal with clients or others in conflict.

e. Expanded Problem Solving Ability

Many lawyers went to law school to help people solve problems. Then, the adversarial adjudicatory system gets ingrained in their blood. That system and the rule of law it's built upon are still the best route to justice I know, when you can't settle matters. But, to function well as a twenty-first century lawyer, you need to complement your adversarial skills with problem solving abilities that support the mutual search for solutions when conflict exists. The negotiation skills you'll garner in the consensual ADR courses will prepare you to engage in collaborative problem-solving whenever possible and apply many of its tenets and skills even in extremely competitive situations.

While I've only touched on the key benefits of gaining negotiation training by enrolling in one of the consensual ADR courses, I hope I've helped you appreciate the need to treat those elective courses as part of your personnel core curriculum. Rounding out adversarial advocacy courses with vital settlement skills will pay vast dividends in every area of law practice despite your chosen field. You'll be more confident and prepared for the challenges ahead and more successful as you join us in the near future.

The Complete Lawyer Arrives in LACBA Member Email Boxes on May 5

The Los Angeles County Bar Association will soon be bringing its members the dynamite on-line work-life balance journal The Complete Lawyer.

Even if I weren't a columnist for TCL (the Human Factor here) I'd still urge you to flip through the online "pages" of this tremendous resource.  Take a look at the following for instance.

Are You As Stressed As Other Attorneys? by Ellen Moran, Lyle Miller and Alma Dell Smith 

We’re Culturally Inclined To Separate Mind And Body by Richard Strozzi-Heckler

My own husband's favorite offering -- When You Lose Sleep, Your Work And Health Suffer Dramatically by Thomas M. Heffron ("yes, honey, I'm coming to bed!")

Possibly A Firm’s Most Effective Health Insurance by one of my co-columnists, Stephanie West Allen who has penned this article with her Brains on Purpose colleague Jeffrey Schwartz

How To Master Stress by Maynard Brusman

Ask The Coaches (about networking) by Debby Stone and Laura Biering

Fix The Leaks In The Pipeline (on minority law school enrollment) by Carl Cooper

Hourly Billing Is The Opiate Of The Profession by Ronald J. Baker

Invest In Training Programs During Tough Economic Times  by Kathleen Brady

Five Steps To Achieve A Sound Mind by Cathy Wright

Master The Fine Art Of Appreciation by Judi Craig 

Do You Think Like A Solo Practitioner?  by Susan Cartier Liebel

Women Lawyers Have Natural Allies In The Millennial Generation by Lauren Stiller Rikleen 

What’s On Your Mind? by Arnie Herz

Beware Of Bloglash by Dawn Wagenaar

. . . . and much much more,

 

including my reviews of Lauren Stiller Rikleen's brilliant Ending the Gauntlet:  Removing Barriers to Women's Success in the Law

and

Ken Cloke's challenging new book Conflict Revolution:  Mediating Evil, War, Injustice and Terrorism.

Negotiating Happiness with Mind Maps: See Links by Clicking On "Continue Reading"

Increase Your Bargaining Power with Writs of Attachment and Execution

If you aren't using writs of attachment in contract cases where the amount due is certain, you aren't using the most powerful means of increasing your bargaining power in litigation.

Attend LACBA's Brown Bag Lunch with Judge James Chalfant at the Stanley Mosk Courthouse 111 N. Hill Street, Los Angeles on May 15, 2008.  Program Description:

Writs and Receivers: Practice tips for those who are rarely there. Judge James Chalfant will host a brown bag lunch highlighting tips and tricks for those who may not have much experience in this area. There is no cost to attend, but participation is limited to the first 12 attorneys who register. The program will be held in the judge's chambers at Stanley Mosk Courthouse, Dept 85. Please note, there is no CLE credit for this program.

Click here to register online.

Getting the Parties to the Bargaining Table, Part I

Is negotiation a political issue?

You bet.

Qureshi: Pakistan Won't Negotiate With Terrorists

(RTTNews) - Pakistan's Foreign Minister Shah Mehmood Qureshi said Monday that his government would not negotiate with "terrorists" even as it seeks open dialogue with some militant groups.

Jimmy Carter and Hamas

WASHINGTON TIMES EDITORIAL
April 16, 2008

Jimmy Carter's decision to meet with the terrorist organization Hamas is turning the former president into something of a political pariah.

New York Times "On the Issues" Foreign Policy Terrorism and Iraq

John Edwards

 On North Korea: "We should negotiate with the North Koreans. We should be tough. We should require that they stop their nuclear development program. We should have the absolute ability to verify that that has occurred."

On the Middle East: Has said that he believes "a two-state solution is ultimately the answer" but would not negotiate with Yasir Arafat. (before Arafat's death, obviously) Would send an envoy to the region.

Glenn Greenwald in Salon
Wednesday Feb. 27, 2008 
Majority of Israelis want to negotiate with Hamas

Sixty-four percent of Israelis say the government must hold direct talks with the Hamas government in Gaza toward a cease-fire and the release of captive soldier Gilad Shalit. Less than one-third (28 percent) still opposes such talks.

I could go on but you get the point.  The first decision any negotiator must make is whether he's willing to negotiate with the "opposition."  And the second is on what terms.

That decision -- and the many ways in which you can bring your opponent to the bargaining table any time you wish -- with the expectation that your negotiations will either successfully resolve your dispute or drastically limit the amount of time you spend litigating it before settlement will be the subject of this week's posts. 

Along the way, we'll talk about the many ways in which the masters of international diplomacy manage to take advantage of favorable negotiation conditions and to finesse unfavorable political climates for the purpose of getting warring parties to meet in an attempt to reach accord.. 

Stay tuned!

Negotiating from a Position of Weakness

I was cruising around the blogosphere this morning looking for links to the prime directive of all negotiations -- know your BATNA -- when I ran across this great 2007 post by Penelope Trunk of the Brazen Careerist -- How to Negotiate When You Have Nothing to Leverage.  

Penelope suggests the weakest strategy available -- exchange power for sympathy.  "If one person has a great BATNA," writes Penelope, "and the other has a terrible one, it’s not really negotiations; it’s trying to get a little something extra. It’s asking for a favor. If you approach negotiations from this perspective then you are much more likely to get a little bit of what you want."

Two of the savviest negotiators around Deepak Malhotra and Max Bazerman in their tremendously practical book Negotiation Genius have devoted an entire chapter to Penelope's problem called, not surprisingly, Negotiating from a Position of Weakness.  Their recommended strategies include the following:

  • Don't Reveal that You Are Weak

[H]aving a weak BATNA is not terribly problematic if the other side does not know that your BATNA is weak. If you have a weak BATNA, don't advertise it! 

  • Overcome Your Weakness by Leveraging Their Weakness

[W]hen both parties have a weak BATNA, it means that the [Zone of Potential Agreement] is large.  In other words, a lot of value is created when the two sides reach an agreement.  Who claims more of this value? . . . [T]he one who fares better is the one who makes the other side's weakness more salient throughout the negotiation. 

  • Identify and Leverage Your Distinct Value Proposition

[V]ery often, you do bring something to the table that distinguishes you from your competitors.  This is your distinct value proposition (DVP), and it need not be a lower price.  You may have a better product,, a higher-quality service, a good reputation, a strong brand, or a host of other assets that your [bargaining partner] values and that you can provide more effectively or cheaply than your competitors.  

  • If Your Position is Very Weak, Consider Relinquishing What Little Power You Do Have (This was Penelope's strategy in the Yahoo negotiation subject of her post). 

[I]f you can't out muscle the other side in a negotiation, you may want to stop flexing our muscles and, instead, simply ask them to help you.  When negotiators try to leverage their power, others reciprocate.  This pattern can be disastrous when you are the weaker party.  But when you make it clear that you have no intention of fighting or negotiating aggressively, others also may soften their stance.

  • Strategize on the Basis of Your Entire Negotiation Portfolio

[A]udit the implicit assumptions you make when formulating your negotiation strategy.  You may perceive yourself as being "weak" if you only measure strength as the ability to push hard in any given negotiation without losing the deal.  But you may discover that you are actually quite "strong" once you begin to think about your ability to withstand losing some deals because you are maximizing the value of your entire negotiation portfolio.

  • Increase Your Strength by Building Coalitions with Other Weak Parties

In the realm of international relations, a vivid example of the power of coalitions surfaced during the 2003 World Trade Organization negotiations in Cancun, Mexico.  Disgruntled by the continued lack of attention paid to the issues of concern to developing nations . . . twenty-one "weak" countries banded together to create the Group of 21.  This group is now in a much stronger position to negotiate for the interests of its members than any member nation would have been on its own.

  • Leverage the Power of Your Extreme Weakness-They May Need You to Survive

[I]t is often useful to tell the negotiation "bully" that an overly strong show of force can be counterproductive:  "If you push me too hard, you'll destroy me -- and lose a value-creating partner."

  • Understand -- and Attack -- the Source of Their Power

A number of Planned Parenthood clinics around the country have adopted a particularly creative strategy for fighting back [against protesters], usually referred to as the "Pledge-a-Picket" Program.  Here's how it works:  The clinic asks its supporters to pledge donations to the clinic on a per protester basis.  The more protesters that show up to picket the clinic, the more money the clinic raises in donations! . . . The Planned Parenthood of Central Texas in Waco has even posted a sign outside its clinic that read:  "Even Our Protesters Support Planned Parenthood."

Once the Planned Parenthood clinics understood that the source of their opponents' power was the ability to draw large numbers of protesters outside the clinic, they were able to think of a novel way of diminishing the benefits of doing so.

Malhotra and Bazerman conclude their chapter on Negotiating from a Position of Weakness by noting that

while being in a position of weakness is sometimes unavoidable, you will negotiate most effectively when you leverage the fundamentals -- systematic preparation and careful strategy formulation.

 

Your Potential BATNA: The Great American Jury Trial

Thanks to Stephanie West Allen at idealawg (channeled to me this morning via the Forbes Business and Financial Blog Network) for the Famous Trials Website from Socrates to Moussaoui (and yes of course O.J.'s there). 

(above, theDeath of Socrates by Jacques-Louis David)

Here's Stephanie's announcement:

Professor Douglas O. Linder of University of Missouri - Kansas City School of Law has created a Web site Famous Trials which presents one intriguing story after another. From Professor Linder's faculty page:

The Famous Trials website, the Web's largest and most visited collection of original essays, images, and primary documents pertaining to great trials, has been an ongoing project of Professor Linder's since 1996. Professor Linder has contributed book chapters, participated in video projects, and presented public speeches on the subject of historic trials.

BATNA for the uninitiated simply means a Better (or the Best) Alternative to a Negotiated Resolution, which is what trial is when your opponent can't negotiate a settlement within the range of reason.

Check it out!

How Can I Convince My Client to Lose More than Predicted and Still Maintain My Own Credibility?

The provocative comment we're following is Jay Welsh's remark that to settle most cases the Plaintiff has to accept a lot less than he wanted to recover and the defendant has to pay a lot more than he ever imagined paying.  And the response we're replying to is Canadian lawyer Michael Webster's:

When the issues have been crystallized into legal ones so well, you are in a lose/lose situation. The manager's dilemma then becomes counsel's dilemma: how do I manage to convince my client to lose more than I ever predicted and still maintain my own credibility.

The reason litigators settle law suits is because the outcome of litigation is uncertain and its pursuit expensive.  But that just states the problem.  How do you "tell" a client in the midst of expensive litigation that he's going to have to pay way more or accept way less than his attorney predicted (with appropriate disclaimers) long, long ago?

First, let me provide a checklist for success in commercial mediation:

  1. Bring the real deal-makers to the mediation or settlement conference for it is they -- not their attorneys -- who will  make the decision to pay way more or to accept way less than they had previously imagined.   
  2. Bring the parties back into the conflict as participants in its resolution again.  Businesses have commercial problems that have business solutions.  Litigation is often just the stick to force the continuation of commercial negotiations that broke down in so spectacular a way that the parties stopped talking to one another, hired lawyers, and began to fight over legal issues the parties neither care about nor understand.  The parties have now experienced how surreal their negotiation becomes when it's conducted in the courts.  They're probably ready to deal again.  Let them.  
  3. Permit the parties to discuss all aspects of the conflict whether they are relevant to the legal issues or not.  The reason one party initiated litigation against the other party is not because he wanted to create precedent.  And if precedent is what a party wants, money might but often cannot settle the matter.  
  4. Bring the experts along and let them talk to one another about the ways in which the matter might be resolved or even why their expert opinions are diametrically opposed.  
  5. Address the parties' justice issues.  People seek out lawyers for one reason and one reason only.  Because they believe themselves to be the victims of an injustice.  And if its the defendant you represent, the injustice visited upon it is the litigation itself.  I spend a significant amount of time during a mediation discussing justice issues with the parties. 
    1. they're being extorted
    2. they're being low-balled
    3. they were defrauded
    4. their trust and confidence was betrayed
    5. their competitor's market tactics have been unfair and violative of any number of state or federal laws
    6. their intellectual property was stolen
    7. etc., etc., etc.
  6. Let the mediator talk with the parties about what the justice system can do, what it should do, what it most likely cannot or will not do.  Most parties will not be happy with their attorneys if their justice issues are not addressed at the time of settlement.  And its my job to make clients happy with their attorneys.
  7. Let the mediator help the parties understand that their case has -- with no one's fault -- gotten worse rather than better over time and why.   
  8. When all else fails, blame the "system." 

Why Parties Pay More or Accept Less than They Want To

Jay Welsh is right.  If the parties have hired a mediator to settle complex commercial or mass tort litigation, they have done so because they need to pay more and accept less than they are prepared to do.  Otherwise, they'd settle without the assistance of a mediator.

This does not mean that the mediator bangs heads or twists arms.  There are hundreds of reasons why parties do not continue to trial and thousands of good excuses for corporate counsel to stop the bleeding.  They include:

  1. the witnesses on the other side performed better in pre-trial testimony than expected
  2. the Judge made pre-trial rulings that cut the heart out of your case
  3. the Supreme Court (state or federal) just over-turned a hundred years of precedent making one party's legal case far worse and the other's far better than expected
  4. it's the economy, stupid
  5. the client realizes during the course of the mediation that there's more than one way to organize the facts and apply the law -- something lawyers are trained to do and even sophisticated clients find hard to swallow.  Having had an "aha" experience during the mediation, the client realizes there's more (or less) at risk than he's been thinking and the offer/demand now on the table looks pretty darn good after all
  6. the other side becomes un-demonized during the course of the mediation, making it easier to part with money for the purpose of resolving the one thing both sides have in common -- a difficult, uncertain, expensive, dangerous lawsuit.
  7. one side simply out-negotiates the other (it happens) 
  8. one or both sides lose heart for the battle when they see that the delta between the their bottom lines is not as great as they expected it to be
  9. the parties manage to "expand the pie" (more about this later) such that the plaintiff does not have to accept that much less nor the defendant pay all that much more than each anticipated (it happens)
  10. one party genuinely develops an understanding of and empathy for the other side's position and changes a hard line attitude against settlement as a result (it happens)

 

There Are No Non-Relational Zero-Sum "Pure Money" Negotiations: Part I

Canadian Lawyer Michael Webster asks about Jay Welsh's comment (see videos) that "in a mediation the plaintiff has to settle for far less than they thought and the the defendant has to pay far more than they ever thought." 

"So," asks Webster, "this would be the lose/lose theory of mediation?"

I know when Michael's being sarcastic but decided to respond seriously by noting that Jay himself  used the phrase "lose-lose." 

I went on to say that the most valuable service I can often perform is to "break through confirmation and other biases/ ** that have interfered with case analysis and caused impasse."

Michael's reply was important:  

When the issues have been crystallized into legal ones so well, you are in a lose/lose situation. The manager's dilemma then becomes counsel's dilemma: how do I manage to convince my client to lose more than I ever predicted and still maintain my own credibility.

Though I'm a little tempted to be flip ("this is why they pay me the big bucks") Michael's question nails one of the most difficult issue attorneys must deal with in settlement negotiations.  It is certainly one of the most delicate tasks a mediator is called upon to perform.

First Let's Re-Visit Interest-Based vs. Distributive Settlement Negotiations, Asking Ourselves Whether There's Really Such a Thing as a "Pure" Money Case

My husband, with 35-years of complex commercial litigation practice under his belt is my attorney-mediator-communication weather-vane.  So I asked him over pancakes this morning, "Honey, do you think there's any such thing as a 'pure' money case?"

Two months ago, he would have said "yes," and given me that "you've changed too much" look.  I don't know why he said "no" this morning.  But here was the gist of his response.

"Every case involves someone's interests, whether it's the GC or a company executive, or even a 'little guy' down the management chain who made a decision that impacted the course of the dispute four or five years ago.  So of course there are innumerable non-monetary concerns that impact why the case is settled and when and for how much.  Then again, maybe I've just been living with you for too long."

So let me first say that there is no such thing as a non-interest based negotiation.  There are only negotiations in which we ignore the fact that party interests are at play.  

This is one of those nature/nurture mind/body duality questions.  Yes, it's "just" about money.  And yes, the money represents party interests.  It's nature and nurture, mind and body, budgetary constraints and party goals and relationships.

Here's another thing.  Although the disputing parties may never again be in relationship with one another, the people on each side of the conflict-fence are not only in daily contact, their well-being, livelihoods, self-respect, reputation, promotions, demotions, and salaries depend upon their on-going relationships with one another, which are all in play in every negotiation of every commercial dispute.

And one more thing.  Conflict cannot arise in the absence of a relationship.  Even though the disputing parties may never again be in relationship, they're sure the heck in relationship now.   And the relationship of the disputing parties from the moment conflict arises to the minute it settles has everything to do with its resolution.

There is no "zero-sum" game outside the realm of the virtual or the hypothetical.  There is no "rational" man.  People -- messy, conflicted, emotion- and interest-driven people -- are the necessary pre-requisite to conflict.  How we deal with apparent lose-lose conflicts, "manage" party expectations and deliver bad news in a way our clients can hear it in the next post.  Immediately hereafter.  

_______________________

**/   "Confirmation bias" refers to our "unwitting selectivity in the acquisition and use of evidence" in ways that are "partial to existing beliefs, expectations, or a hypothesis in hand."  See Confirmation Bias: A Ubiquitous Phenomenon in Many Guises by Raymond S. Nickerson of Tufts University.

Negotiate with Your Head, Not Your Heart

Thanks to Anne Reed over at Deliberations for forwarding this April 22 Psychology NewsWire, It Pays to Know Your Opponent: Success in Negotiations Improved by Perspective-Taking, But Limited by Empathy.

It Pays refers to recent work done by Kellogg School of Management Professor Adam Galinsky, who has demonstrated (with colleagues William Maddux -- (INSEAD -- Debra Gilin -- St. Mary's U. --  and Judith White -- Dartmouth) that success in negotiations depends on focusing on the head and not the heart. In other words, it is better to take the perspective of negotiation opponents rather than to empathize with them. (You may remember Galinsky as the academic responsible for demonstrating that the person who makes the first offer will (nearly) always get the larger share of the delta between the two parties' "bottom lines."  See Making the First Offer here)

Now Galinksy and friends inform us that we are far more likely to reach a negotiated resolution to a conflict if we use our heads rather than our hearts.  As It Pays reports:  

Perspective-taking, according to the study published in the April 2008 issue of Psychological Science, a publication of the Association for Psychological Science, involves understanding and anticipating an opponent's interests, thoughts, and likely behaviors, whereas empathy focuses mostly on sympathy and compassion for another.

"Perspective takers are able to step outside the constraints of their own immediate, biased frames of reference," wrote the authors. "Empathy, however, leads individuals to violate norms of equity and equality and to provide preferential treatments."

The researchers performed a total of three studies designed to assess the relationship between successful negotiations and perspective-taking and empathy tendencies. In two of the studies, the participants negotiated the sale of a gas station where a deal based solely on price was impossible: the seller's asking price was higher than the buyer's limit. However, both parties' underlying interests were compatible, and so creative deals were possible. In the first study, those participants who scored highly on the perspective-taking portion of a personality inventory were more likely to successfully reach a deal. In contrast, higher scores on empathy led dyads to be less successful at reaching a creative deal. 

Why Enlightened Self-Interest Trumps Sympathy

Just when you were about to stereotype "negotiated resolutions" as commie-pinko limp-wristed new age aquarian left-of-liberal kum-by-ya marshmellow toaster solutions to the problems of (excuse me fellas) real men -- along comes new research once again demonstrating that negotiation requires hard heads rather than soft hearts. 

Why?

Because our competitive natures ("I need my stuff to survive") will almost always trump our collaborative inclinations ("we need each other to survive").  If this weren't so, the world wouldn't be divided into its current "pie pieces" -- the first, second and third worlds for instance.  

More particularly, because distributive non-interest based bargaining is all about getting "our share" of a fixed pie while interest-based or integrative negotiations require the parties to:  (1) learn about and attempt to satisfy their bargaining partners' often non-apparent needs and desires; and, (2) to collaborate in an effort to find ways to satisfy those needs and desires in novel and creative ways, reaching an integrative agreement becomes much more likely than reaching a purely distributive one. 

Why?

Because the integrative deal will -- by its very nature -- serve more of both parties' interests than would its distributive counter-part.  

Perspective-Taking, Sympathy and Foreclosure

I don't know my neighbors well.  They have a small family with very young children and keep pretty much to themselves.  I understand from the local grapevine, however, that they're selling their house because one of them lost their job and they can't make the mortgage payments.   

If we lived in another country or if the neighborhood belonged to certain religious sects that make it their business to take care of their own, we might all come together to help the neighbors save their house.  But we don't.

We have and express a lot of sympathy when we discuss our neighbors' plight.  "Must be hard for the kids," we say, "and the parents have worked so hard to improve the property.  It would be a shame if they lost their equity."

Our sympathy, however, does not lead us to trump our self-interest (which includes simply "keeping to ourselves") in favor of the interests of the neighbors.

If, however, we learned that the neighbors were about to sell the house to a local fraternity, you can put easy money on the neighborhood mobilizing into action to find a solution.  And once the neighborhood starts looking for an affordable solution to a neighborhood problem, the chances that the interests of the distressed family and their (temporarily) better-off neighbors will intersect and that new resources will be brought to the table ("hey, George, I know a lawyer who specializes in these things" or a banker or a politician or a journalist for the L.A. Times) increase exponentially. 

Heck, instead of hiring lawyers to stop the sale to the fraternity, we might put together an emergency neighborhood loan-fund.   Or simply help find the unemployed neighbor a new job.  There are a lot of resources in my neighborhood.  And many good-hearted people.  But I'm afraid modern American folk-ways just don't allow for a neighborhood solution to one of its member's problems.  Until, that is, our own self-interests are threatened.

So it might seem counter-intuitive to say that mentally putting ourselves into another's shoes to ascertain their interests needs and desires (perspective-taking) is more likely to create a "deal" between people than simple sympathy. 

But we didn't survive as a species because we're particularly loving.  We survived as a species because its in our best interest -- our only interest -- to cooperate with one another. 

Or, quite simply, we die.

Which reminds me that it's Earth Day.  Make a contribution to the planet and our collective and individual survival as a species today by clicking on the image below!

Outside Settlement Counsel in Class Actions

As I promised last week, we'll be providing our readers with a series of posts about the use of settlement counsel in sophisticated and complex commercial litigation.

While searching the internet for pertinent articles, I came upon an interview with a New York attorney, Lew Goldfarb, whose entire practice is devoted to settling cases for clients already represented in litigation by other law firms.  Mr. Goldfarb's credentials are impressive, his observations shrewd and his opinions about the use of settlement counsel closely match those of our colleague Jay McCauley whose article we published earlier today here.

Here's the link to Mr. Goldfarb's firm and another to the interview (from Metropolitan Corporate Counsel) with a tantalizing excerpt below:

Typically, I am retained by the defense side as part of a dual-track approach. The litigation continues on one track, while I advise the plaintiffs' lawyers that I have been retained by the defense to take a look at the possibility of settlement. At the outset, I make it clear that I have been given only a 30 day window to attempt settlement and that my involvement should not be construed as a lack of resolve to litigate the case.

Following this initial dialog, I review the strengths and weaknesses of defendant's position. Class action litigation often produces a contentious dynamic that polarizes positions based more on emotion than factual disagreements. One of my most important tasks is to identify the true elements of disagreement. When I have a good understanding of these factors, I make recommendations to my client and obtain parameters for my discussions with plaintiffs' counsel.

I then meet with the plaintiffs' counsel, preferably one who is not involved in the litigation, to focus on ways to settle the case. Plaintiffs' lawyers are usually receptive to this approach, because they are looking for ways to get relief for their clients and to get their legal fees without the costs and risks of further litigation.

In some cases I am first approached by plaintiffs' counsel who are interested in settling a case and who know me from years of litigating class actions. I will then take this overture to the corporate defendant who will decide whether to retain me to attempt a settlement. I have resolved a number of cases in this manner.

I have also found success in ending class actions by combining the resolution of a government investigation with additional relief to class members. Very often class actions follow on the heels of a government investigation. In negotiating a settlement with a government agency, it is often possible to synchronize the remedies that the government wants with those that plaintiffs' counsel is seeking and put them all into one package. This serves not only to end the government's involvement, but also to satisfy the claims of the plaintiffs, and provide a compelling argument for ending the class action. I would then go back to the plaintiffs' lawyers, demonstrate how their clients' claims have been fully satisfied, and offer them appropriate attorneys' fees.

In some cases plaintiffs' counsel demand greater relief for the class, in part, to justify higher attorneys' fees. If agreement is not reached, the client can attempt to persuade the court that the relief to the class is adequate. If the court agrees, the lawsuit becomes a catalyst case where the only issue is whether the plaintiffs' lawyers are entitled to attorneys' fees for achieving results for the class. The defendant often is in a much stronger position arguing this issue rather than the merits of the case.

Continue reading here.

What it Takes to Be a Great Mediation Advocate from Day on Torts

Thanks to Geoff Sharp for leading me to John Day's terrific series of posts on What it Takes to Be a Great Trial Lawyer particularly Part 11, The Courage to Tell the Client the Truth, excerpt below.

As information is learned in a given case, great trial lawyers also tell their client the truth. They give an opinion about whether to make, accept or reject a settlement proposal, or indicate that the proposal is so within the range of reason to make it a toss-up. They give these honest opinions whether the client likes the advice or not, and explain the basis for the opinion.

A great trial lawyer will not hesitate to tell a client that the client is making a mistake by not taking a recommendation of the lawyer, but then will follow the client's wishes so long as the course of action is legal and ethical.

In other words, great trial lawyers understand that client is the boss, and unless the client is demanding illegal or unethical action or the relationship between lawyer and client has become so impaired that the lawyer cannot adequately represent the client, the lawyer yields to the client's wishes.

When you lift the rock of legal practice off your back . . .

. . . you tend to escape gravity in a fury of creative activity.

Like this!  The Spring issue of the r.kv.r.y. quarterly literary journal, which has just been published and is quickly approaching it's fourth anniversary.  (see also r.kv.r.y.'s blog here!)

If you, like me, chose law as the default profession of the liberal arts major (Literature here, natch) check out our latest issue, which is full of great stuff -- more than a little of which has been written by lawyers.

Don't get me wrong -- I LOVED legal practice and am even more passionate about mediating the resolution of the type of case I litigated for 25 years -- complex commercial litigation.  

NEGOTIATING the resolution of these cases is really just the final part of my legal career -- a turn in the road that I'm more than pleased to have followed, particularly as our national recession deepens. 

Why?  Because negotiated resolutions don't depend upon court calendars, cranky and often unpredicatable Judges (my friends on the Bench excluded) or someone else's idea (12 people good and true; three arbitrators; one Judge, etc.) of what the most beneficial and fair solution to a business problem might be.

It's all of a piece, you see, because story -- as in those written by r.kv.r.y.'s contributors -- is more important to the mediated settlement of a dispute than a litigated resolution.  In mediation, we dress the "legal case" back up in all of its compelling though often messy particulars; we put the flesh and blood people back into the business problems that led them to lawyers in the first instance, permitting them do with their mutual conflict what they do best -- create a commercial solution to a business problem.  

Story. Self-determination.  Justice.

Negotiating Law Firm Happiness: Partnership Compensation

I've got a little series on law firm happiness going on over at the tremendous workplace law resource Connecticut Employment Law BlogDan Schwartz, the dynamite Blog Meister behind Connecticut Employment Law had to take a blog break  while actually TRYING A CASE (yes, people still DO).  While working, he filled his excellent blog with guest posts, including my three-part series ending with partnership compensation today.  

Call me an idealist, but some of the suggestions made in my current post over at the Connecticult Employment Law blog are taken from Lauren Stiller Rikleen's exhaustive analysis of the modern law firm's ills and potential remedies in Ending the Gauntlet, my review of which will appear in this section of the Complete Lawyer's next issue so keep a look out for it!

 

Mediation Advocacy: the Self-Serving Bias

(top: we assimilate and organize data in our own favor:  click here for full size chart)

Despite our own beliefs that we've adequately analyzed the weaknesses in our own cases, we have all been told at one time or another that we are "buying our own bull%#@^."

Is there a remedy?

First the Social Science Research

According to Bargaining Impediments and Settlement Behavior, studies of self-serving bias on estimates of probable damage awards provide strong evidence that:

  • we assimilate information based on our existing biases (remember the OJ verdict);
  • even when told we're doing so, we continue to organize information in such a way that it supports our existing opinions;
  • the receipt of additional information, without more, will simply "confirm" existing biases; and,
  • to make a difference in the parties' views of the merits of their case, mediation practices must include techniques for de-biasing the parties.

The Research

Research subjects were given the identical "case" materials and randomly assigned roles as "Plai