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Thanks again to IP attorney R. David Donoghue of the Chicago IP Litigation Blog for including my post on Trust and Compromise in the May Carnival of Trust. 

Now I have even more reason to be grateful.  

The Political Calculations Blog's weekly On the Moneyed Midways compilation of business and money related blog carnivals choose my post How Can I Convince My Client to Lose More than Predicted and Still Maintain My Own Credibility? as the Best Post of the Week Anywhere!

Makes a girl feel all appreciated guys! 

Thanks!!! 

And nice to find the Best of the Best aggregated for readers on a weekly basis at Political Calculations which we'll be adding to our blog roll post haste!

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Take a look at this summary of the article When Winning Is Everything by Deepak Malhotra, Gillian Ku, and J. Keith Murnighan, now available online here as well as in the May '08 Harvard Business Review.

Malhotra and colleagues suggest that an adrenaline-fueled emotional state [which they] call  competitive arousal, often leads to bad decisions.

Negotiating litigators may want to note that all of the conditions giving rise to "competitive arousal" are the day-to-day conditions in which litigation is conducted, i.e., intense rivalry, especially in the form of one-on-one competitions; time pressure . . . ; and being in the spotlight—that is, working in the presence of an audience.

Sound familiar?  Take a look at the consequences and the potential solutions below. 

Individually, these factors can seriously impair managerial decision making; together, their consequences can be dire, as evidenced by many high-profile business disasters. It's not possible to avoid destructive competitions and bidding wars completely.

But managers can help prevent competitive arousal by anticipating potentially harmful competitive dynamics and then restructuring the deal-making process. They can also stop irrational competitive behavior from escalating by addressing the causes of competitive arousal.

When rivalry is intense, for instance, managers can

• limit the roles of those who feel it most
• reduce time pressure by extending or eliminating arbitrary deadlines
• deflect the spotlight by spreading the responsibility for critical competitive decisions among team members.

Decision makers will be most successful when they focus on winning contests in which they have a real advantage—and take a step back from those in which winning exacts too high a cost.

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Recently, I excerpted the expressed concerns of in-house counsel about ineffective mediators.   Among the complaints was some mediators' refusal to see or acknowledge the other side's "irrationality" As Where's the Magic from the U.K. online Mediator Magazine noted:

It can be frustrating where they [the mediator] can see the irrationality of the other party, how their claims and positions are unsubstantiated, and choose to ignore it,' says Frank Aghovia, legal adviser at Exel Plc. He continues, 'It's like saying, "I know he's talking out of his backside, but can you give him what he wants anyway." He concludes that 'steadfast neutrality is irritating and wastes time.'

Reality-Testing

Helping litigants and their attorneys reassess their case is one of the mediator's greatest challenges.  The mediator intervenes only after the parties' dispute has reached stalemate.  Each party to a stalemate has negative attitudes about his adversary that are maintained and prolonged by three psychological mechanisms: selective perception, self-fulfilling prophecy, and autistic hostility.

Selective perception:  people tend to select those perceptions that tend to confirm their existing attitudes, and ignore or discount information that would disconfirm their existing attitudes.

Self-fulfilling prophecies:  people with negative attitudes about their adversary engage in conduct that provokes the adversary's "expected" response, which confirms the party's original expectation, and a vicious cycle ensues.

Autistic hostility:  Parties in litigation have stopped talking with one another about their dispute, communicating only through their attorneys.  The social scientists would say that such people are "stuck in autistic hostility, that is, their hostility is perpetuated by their refusal to communicate."

(for a full discussion of these and other conflict dynamics see CR Info's Book Summary of Social Conflict: Escalation, Stalemate and Settlement by Dean G. Pruitt and Jeffrey Z. Rubin). 

When the parties are in this frame of mind -- particularly after years of highly contentious litigation -- they genuinely believe that the other side is either completely irrational or downright evil.

So how does the mediator reality test in this climate of anger and distrust while continuing to maintain his ability to work effectively with both parties.  

Peter Robinson, co-director of the prestigious Straus Institute of Conflict Resolution in Malibu, California, tackles this problem by way of a hypothetical.  He assumes that one side believes his adversary came here from another planet via UFO.  What should a mediator -- who needs to retain the trust and confidence of both sides -- do?  

Robinson answers his own rhetorical question in this fashion:

When talking to the UFO-guy, I am totally with him.  Listening, asking questions, trying to understand whether his delusion actually has some hidden meaning that might suggest a way to resolve the dispute without asking the other party to "buy in" to the UFO story.

After giving Mr. UFO an opportunity to have his say and to experience -- perhaps for the first time ever -- another human being's willingness to temporarily suspend his disbelief -- I begin to gently "reality test."  To do so, I do not have to doubt Mr. UFO's story.  I can suggest, however, that not everyone is as understanding as I am. 

"Have you told this story to many people?" I might ask.  "And what has their response been?"  Do you have any reason to believe that a judge or jury might be more likely to believe this narrative of events more than, say, your mother, sister, cousin, wife, best friend, etc. were?

Robinson's suggested action between the rock of understanding and the hard place of consensual reality is shrewd and effective.  It neatly avoids the problem recently raised by my friend and colleague Jeff Kichaven who has likened piling rationales atop one another for the purpose of changing another's mind to raising your voice for the purpose of communicating with a deaf man.   

Harvard Business School professors Deepak Malhotra and Max H. Bazerman address the irrationality problem in another fashion in their tremendously useful book Negotiation Genius. 

"Whenever our students or clients tell us about their 'irrational' or 'crazy' counterparts," they write, "we work with them to carefully consider whether the other side is truly irrational.  Almost always, the answer is no."

Malhotra and Bazerman list the mistakes that lead us to call our negotiating partners "nuts," "delusional" or "evil" as follows:

Mistake No. 1:  They are Not Delusional, They are Uninformed. 

If you can educate or inform your bargaining partner, say Malhotra and Bazerman

about their true interests, the consequences of their actions, the strength of your BATNA, and so on - there is a strong likelihood they will make better decisions . . . [I]f someone says "no" to an offer that you know is in her best interest, do not assume she is irrational.  Instead, work to ensure that she understands why the offer is in her best interest.  She may simply have misunderstood or ignored a crucial piece of information.

Mistake No. 2:  They are Not Irrational; They Have Hidden Constraints

In negotiation, a wide variety of possible constraints exist.  The other side may be constrained by advice from her lawyers, by the fear of setting a dangerous precedent, by promises she has made to other parties [this is a particularly common constraint in IP infringement actions] by time pressure and so on.  [D]iscover these constraints . . . and . . help other parties overcome them . . . rather than dismissing others as irrational.

Mistake No. 3:  They are Not Irrational; They Have Hidden Interests

[P]eople will sometimes reject your offer because they think it is unfair, because they don't like you [or are tired of feeling as if you don't like them] or for other reasons that have nothing to do with the obvious merits of your proposal.  These people are not irrational; they are simply fulfilling needs and interests that you may not fully appreciate.  .  .  [I]nvestigate:  "What might be motivating her to act this way?  What are all of her interests?"

But What if They Really Are Irrational

If your counterpart truly is irrational -- in other words, he is determined to work against what is in his best interest -- then your options will be fewer.  You can try to push through an agreement despite his irrationality, you can try to "go around him" by negotiating with someone else with authority who seems more willing to listen to reasons . . . or you may decide to pursue your BATNA because his irrationality has eliminated all hope of creating value.

I have a friend who is, literally,  a rocket scientist.  He says that there are no problems which cannot be solved -- only problems that we don't yet understand.  This is as true in negotiation as it is in rocket science.  In both cases, the wisest course is to assume you know nothing and begin asking the type of questions that would help learn something.

 

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Thanks to Geoff Sharp at mediator blah blah for directing us to this great U.K. Mediation resource, The Mediator Magazine which is great to poke around in a little when you're home for mother's day and mom's gone off to bed.  Here, for instance, are some well taken criticisms of mediation practice by in-house counsel from the article Where's the Magic?

Top of the list of issues which invite scorn is perceived weakness on the part of the mediator. Giving palpable nonsense and well documented fact equal air-time in the interests of appearing open-minded has backfired for a number of mediators. 'It can be frustrating where they [the mediator] can see the irrationality of the other party, how their claims and positions are unsubstantiated, and choose to ignore it,' says Frank Aghovia, legal adviser at Exel Plc. He continues, 'It's like saying, "I know he's talking out of his backside, but can you give him what he wants anyway." He concludes that 'steadfast neutrality is irritating and wastes time.'

One public sector lawyer, though generally more favourably disposed towards mediation, shares a sense of frustration with the purely facilitative model: 'If a mediator is too passive,' he says, 'there isn't going to be any realignment of expectations, there isn't going to be the refocusing of the parties on the strengths and weaknesses of their own and the other party's case. It's simply not going to happen. You're not going to facilitate the movement.'

Naturally it is all a question of degree, but frustration with a style perceived to be 'slow', 'wet', 'namby-pamby', or worse, 'like therapy' is real, and stands in the way of mediation increasing its meagre market share.

It is also evident that some mediators have failed to manage the process with sufficient vigour, fuelling comments like 'I've been at quite a few [mediations] and question what the mediator actually does.' No doubt they've had to spend all their time working with the other side, but if so, this needs to be communicated.

This lack of robustness which for many is synonymous with mediation has bred the widespread belief that mediation only works when both sides want to mediate. And where that's the case, without prejudice discussions will do the job. Until mediation's image hardens to the point where people realise that great mediators can deal with the shirty, dismissive and gratuitously rude types, mediation will remain in the shadows. . . .

These criticisms are real and require attention.  I'm uncertain of the state of "professional" mediation in the U.K., but here in California, its all over the board.  For the mediation advocate and his client, finding the right mediator for the right case at the right time is not only more art than science, it's often more guesswork than art. 

I'll be dealing with the issues raised by this U.K. article in the coming weeks.  For the full article, click on the link above.

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If you need help Negotiating the Minefields of Electronic Discovery, you have my complete sympathy.  I hope this article by Stephen D. Williger, Esq.and Robin M. Wilson, Esq. from 10 RICH. J.L. & TECH. 52 (2004) helps. 

And if you're the client -- well, here's a darn good reason for settlement before you embark on searches of the C: drives of every employee you have! 

Entire article embedded below

Negotiating the Minefields of Electronic Discovery - Get more documents

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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.

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I'm asked this morning by an ADR colleague whether we can criticize diversity without sounding like racists.  The question itself is problematic because it not only assumes a racial divide, it places "us" on the "white" side of it. 

The question arose from a recent press release by local mediator Elizabeth Moreno -- Is Mediation Losing Its Effectiveness:  Lack of Diverse Mediators.  The release describes an ADR diversity initiative being pursued by Shell Oil.  Shell, noted Moreno, is  

 introducing supplier diversity to the ADR profession [by] extend[ing] business opportunities to certified minority and women ADR neutrals. These efforts, coined as "second tier," allow Shell to influence prime or majority ADR firms, with whom they do business, to also contract with minority and women owned ADR firms within the business community.

In the upcoming months Shell will be targeting  . . . ADR services to participate in second tier efforts. Shell astutely recognizes that by embracing the concept of inclusion, the company will rise to a higher level, reflecting its belief that it "will benefit from diversity through better relationships with customers, suppliers, partners, employees, government and other stakeholders, with positive impact on the bottom line."

I'm assuming that my questioner does not agree with the "affirmative action" aspect of this program.  Having debated the affirmative action issue since I began law school at U.C. Davis where the Supreme Court Bakke decision originated, I know well how divisive this issue can be.  But it is an important issue -- an issue critical to a nation not only "conceived in liberty" but "dedicated to the proposition that all men (sic) are created equal."

So Let's Take a Look at ADR and Diversity

I'll ask the academics over at the ADR Prof Blog to correct me if I'm wrong.  

I understand the academic criticism of mediation to be this:  in the immediate post-civil rights era while greater legal protections have been afforded to women and under-represented minorities, the "people" have been channeled into a system -- mediation -- that lacks the prejudice-flattening constraints of the rule of law.  More disturbing, say critics, is the fact that this "lawless" system is largely presided over by -- excuse me if this offends anyone -- OLD WHITE MEN.

I've learned more about racial bias talking to my liberal (white) "unprejudiced" friends this election season than I have since I participated in the "second wave" women's movement in the early nineteen seventies (remember consciousness raising?)  I do not judge them, nor myself, for our necessarily limited view which just happens to be that of the dominant culture.

I know we still have a serious racial divide because when I talk to my educated and liberal African American friends they say things that shock me. Things like -- the U.S. may have started the AIDS epidemic to rid the world of Africans. OK. I get it.  There's something about their experience of America that is so radically different from mine that I think their point of view is, frankly, just a little nuts.  This is what I do know -- I will never truly be able to see the world from their point of view.

That said, I do think we can criticize people for taking advantage of "diversity" issues to forward an agenda -- or their own personal advancement -- other than forwarding diversity itself. We can criticize those who would deepen the divide to profit from it.

I think Obama is modeling the correct response to racial divide, which is one of the reasons his candidacy impresses me so.  There haven't been many public figures willing to talk about the elephant in America's living room -- racism.  Nor has anyone on the national stage in my memory ever said "your dreams do not have to come at the expense of mine."

If I could write a sentence in a circle at this point, instead of linearly as the language requires me to do, I would do so.  Here is what I understood Obama's response to the question of the racial divide in America to be.

Acknowledge it Heal it Move on Heal it Move on Acknowledge it Move On Heal it Acknowledge it

There are no periods in this sentence because this activity needs to be constant and on-going.  Because we will always be stuck in our own point of view.  Because in-group and out-group prejudice will always be with us. And because the more visible markers there are for "otherness" in others, the more prey we are to the error of dividing the world into "us" and 'them."  

The answer?  Diversity.  Vigilance.  Education. 

Toward that end, here are some ADR Diversity resources: 

Commonality to Balance Diversity

Mediation:  the Great Equalizer?  A Critical Theory Analysis

Toward a More Perfect Union in an Age of Diversity: A Guide to Building Stronger Communities
through Public Dialogue

Center for Dispute Resolution, whose mission is to "to promote and provide education and comprehensive approaches to dispute resolution that constructively serve the needs of our culturally diverse society."   

ACCESS ADR:  A 2004 Diversity Initiative Launched With The Support Of The JAMS Foundation And The ABA

Striving for DIVERSITY in ADR & Why it Matters: An Interview with the Hon. Timothy K. Lewis, the Chairman of the AAA's Diversity Committee [who] speaks candidly about his interest in diversity in the decision making professions, and why allowing minorities and women an opportunity to participate is so vitally important.

The Diversity Task force of the International Institute for Conflict Prevention and Resolution ("CPR") whose mission it is to "adopt businessdriven initiatives to increase the ethnic, gender, and social diversity of mediators, arbitrators, and those involved in alternative dispute resolution, both within CPR institute and on a national scale."

Compilation of mediate dot com articles on diversity in mediation 

THE GREGORY SOBEL DIVERSITY IN MEDIATION SCHOLARSHIP APPLICATION

Slouching Towards Inclusion by Carol Miller Lieber & Jamala Rogers

Diversity Resistance

The Media Diversity Institute

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A friend and former legal partner was fond of saying that the biggest lie in the business was I don't take it personally. After four years of full-time mediation, I have another "Big Lie" to add – it’s only about money.

The social scientists who sutdy these things say that the way in which we respond to adversity "often reflects the fact that [our] prestige or status has been threatened more than the fact that [our] purchasing power has been diminished." Miller, Disrespect and the Experience of Injustice, Annual Review of Psychology (2002). In other words, the corporate C.E.O., like any other kid on the block, will retaliate when he feels he has been disrespected.

Conversely, research shows that business people are reluctant to recommend legal action if they believe that they and their company have been treated respectfully. Although this is particularly true of fiduciary and special relationships such as lawyer-client and business partnerships of all kinds, it also applies to arm's length business transactions.

Every commercial interaction, we are told, "represents a social exchange and every form of social behavior represents a resource." Id. People's satisfaction with the outcome of a commercial transaction therefore "depends highly, and often primarily, on their perception of the fairness of those outcomes." Id.

When we, as litigators and counsellors, actively listen to what our clients and our adversaries are saying about the rights and responsibilities of all participants in an ethical business community, we stand the best chance of engendering mutual trust and respect among the parties. In that atmosphere, the probability of becoming embroiled in litigation decreases precipitously. When the parties believe that their concerns are being heard and respected, losses that might otherwise become lawsuits, are far more likely to be addressed as the understandable consequence of the inevitable mistakes and miscommunications that attend all human enterprises.

As much as we'd like to believe that we don't take it personally or that it's only about money, the good news for all of us is that we do and it's not.

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Today the Silicon Alley Insider in its post Google, Viacom: We Won't Settle YouTube Fight Out Of Court asked the same question about Google and Viacom that we've been asking about J.K. Rawling and a middle school teacher -- Whuzzup with the whole settlement thing?

As Alley reports, David Eun, VP in charge of Google content partnerships told Dow Jones Newswires ``we're going all the way to the Supreme Court.  We're very clear about it.''

In the law biz we call this "posturing," and that "all the way to the Supreme Court" comment we call laughable posturing.  Alley says:

Call us dreamers, but we still think both sides could kiss and make up before this gets to the Supremes. After all, the two sides were negotiating for months before going hostile. And Sumner Redstone's other media company -- CBS -- seems quite happy with YouTube. So while both sides can argue that there are important principles at play here, we're pretty sure they can get resolved with an appropriately sized check. 

Of course it might well not be the size of a check but some other set of commercial exchanges, concessions, or synergies that will eventually settle the thing.  

These are business people for goodness sakes.  And never was a business person born who wants to establish Supreme Court precedent.  Talk about giving away your power and control.  

We welcome comments from more knowledgeable readers!

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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.

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Thanks to Geoff Sharp at mediator blah blah for alerting us to this truly excellent post over at The Consensus Building Institute:  Mediator as Juror:  A Day in Middlesex County Superior Court.  After recounting the facts of the case, CBI's Managing Director Patrick Field comments as follows:

[T]he case reminded me why mediators have such an important, but difficult, job in supporting justice, civil society and social capital. Many parties simply cannot find a way out of escalating conflict and assume that justice can only be served in the courts. This case was a perfect example of several time-tested conflict lessons.

Emotions get the better of us. Here were two well-educated, well-off individuals who let their anger, hurt, offense, and desire for revenge get the best of them.

Communicating is the hardest thing to do. A second phone call, an attempt to be conciliatory, or a short email asking to set a different tone didn’t happen. Somehow, the simplest thing to do—talk—became the hardest.

Sunk costs sink us further. Clearly, the plaintiff was trying to recover his sunk costs, but had passed the point of no return. From an economic standpoint, he had failed to get out when it made dollars and sense (pun intended) and was embarrassingly digging himself deeper and deeper.

Taking responsibility is harder than fighting over it. The facts, as we came to understand them, suggested that this dispute could and should have been resolved months earlier—to everyone’s benefit. Yet the parties chose to point fingers and relinquish their responsibility for resolving the dispute efficiently, fairly, and expeditiously.

Justice is sought but not necessarily served. The parties, both angry, both determined that they were right, decided to take their case all the way to jury. Each was going to get a verdict in his favor one way or another! But the reality was that several partial settlements were offered, winnowing the total amount down, and the judge retained the right to rule on legal fees. We, the jury, were left with a seemingly trivial case, wishing we could punish them both for being so foolhardy.

Serving on a jury reaffirmed to me that justice doesn’t simply emanate Solomon-style from on high. Here’s what I learned.

Justice is not divined; it is negotiated. As our jury deliberated, I realized that this was in fact a negotiation, constrained as it might be by our charge and the evidence. Was the contract valid? Did the defendant actually breach the contract? If so, how much were the damages really worth? When parties hand over their dispute to a jury, they are not avoiding a serious negotiation, they are simply leaving it in the hands of strangers.

Justice is blind. As jurors, we couldn’t ask questions. We couldn’t get at the parties’ deeper motivations, feelings, and emotions (like a mediator might). We did issue a verdict, but we did so blindly, due to our exceedingly limited information and understanding.

Juries deliver verdicts, not necessarily justice. I feel our verdict was fair and reasonable, given what we knew. My fellow jurors (all twelve) took the case seriously, considered the evidence, and did their best to arrive at logical conclusions.

However, we probably didn’t deliver much on the larger front of justice. We couldn’t help the parties find a resolution that left them better off in terms of lower costs, less bitterness, and greater self-respect. We couldn’t censure the lawyers for not doing a better job of restraining their clients’ emotions. We couldn’t issue an admonition against abusing the courts with cases that should be settled by reasonable people elsewhere. We couldn’t aid society by helping its citizens take responsibility for their actions, emotions, and disputes.

So, mediators, next time you sit with parties who are rearing to go to court, I encourage you to keep in mind that court is really settlement, formal as it may be, by other means. And to the future parties of such a suit, it would be well to remember that there is no certainty—and in fact much reason to doubt—that a judge and jury will issue a better verdict or clearer justice than you might arrive at by your own making.

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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!

 

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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 Matters; George 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.

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My Judicate West Video Profile here and, of course, Gloria Swanson in Sunset Blvd. below

My favorite lines:

Joe Gillis: You're Norma Desmond. You used to be in silent pictures. You used to be big.
Norma Desmond: I am big. It's the pictures that got small. 

Norma Desmond: We didn't need dialogue. We had faces!

 

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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.

 

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(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.

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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.

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In this part of the new series on getting the parties to the bargaining table, I interview former in-house Chrysler counsel and former Hogan & Hartson partner, Lew Goldfarb, who now has his own full-time outside settlement counsel firm.  

For Lew's full bio and contact information, click here.

 

• what's the difference between outside settlement counsel and a mediator?

Settlement counsel is an advocate for one side, in my case, that's usually the defense.  While the mediator is a neutral who tries to facilitate a compromise, settlement counsel attempts to achieve better outcomes for his clients for two reasons:  (a) I have a complete understanding of the full range of my clients' interests, many of which are often not communicated to litigation counsel; and, (b) it is easier for me to learn the true motivations (if not the bottom line) of plaintiffs' counsel than it is for litigation counsel to do so.

In class actions, which are my specialty, I strive to craft a solution that responds to plaintiffs' counsel's needs while imposing minimal costs on my client. There are numerous, creative ways to settle class actions that accomplish both objectives effectively.

• I sometimes find that the parties for whom I mediate have not confided in the litigation team all of the corporate interests that are propelling the client toward settlement. I found this to be true in litigation practice and as a mediator. Do you encounter this as outside settlement counsel and, if so, how do you serve the client's interests without stepping on the toes of litigation counsel and vice verse.

There's always a bit of a communication gap between litigation counsel and the client.  When clients hire me as settlement counsel it's in their interest to provide me with complete information in order to get them the best possible outcome, so they rarely withhold any important information fro me. In a recent case, I was not only invited to speak at several client board meetings, I was also asked to spend several days in the field on sales trucks to observe the client's franchisees that were the subject of the lawsuit.  As a mediator, I usually only see the information that the litigation counsel provides as part of his client's submission, which is probably much more selective.

• Now that I've been mediating full time for four years, I find I'm much more prone to ask the parties interest-based questions than I was as a litigator. When I say "interest based," I mean corporate realities such as chain of command; upcoming mergers or acquisitions; a new management team; quarter- or year-end financial planning; divisional loss history; and, the like.  If you find that to be true as outside settlement counsel, what do you think accounts for corporate counsel keeping their litigation team largely in the dark about issues that might have a substantial impact on the ultimate resolution of the matter?

Since I have always approached litigation with a view toward early resolution, either as in house counsel, outside litigator or mediator, I would usually make the same inquiries regarding the client interests that you do as a mediator. My only explanation as to why corporate counsel may withhold such information from their litigators may be that they are not seeking a negotiated outcome. In that case, they may believe that their litigators will be more effective and focused without being encumbered with "interest-based" information.

• My peers in the mediation world are fond of saying that litigators have to "churn" cases before settling them. I find that a shockingly cynical attitude.  I often found that clients were more settlement averse than their litigation counsel.  What is your experience in that regard?

I have to admit that I am more on the side of the cynics. I've had this longstanding belief that the legal profession imposes enormous economic costs on society without a commensurate benefit to the public, all in the name of providing access to the legal process. (See Goldfarb v. Virginia State Bar, 423 U.S.886 [1975]) I believe that litigators tell themselves that they were hired to litigate not settle the case. I think it's less a matter of "churning" than it is the litigators' belief believe that "early" resolution means winning a dispositive motion, even if it takes a year or more to get an outcome. (See my article "Litigate it or End it" which discusses this issue.)

While there are always legitimate corporate reasons for not settling a case, litigators are reluctant to discuss early settlement with their clients for two reasons: (1) loss of fees; and, (2) fear of showing any lack of resolve to win the case. My experience is not that clients are settlement averse, rather that litigation counsel convince their clients to hold off on settlement for one more dispositive motion.

• How did you come to champion the use of settlement counsel? 

I honed my skills as settlement counsel while serving for 16 years in house at Chrysler. When I arrived at Chrysler in 1985, the company was engaged in costly litigation with GM over a GM/Toyota joint manufacturing venture in Calif. The General Counsel asked me to look for alternatives to the litigation, which is when I found an article by Roger Fisher of Harvard promoting the use of separate settlement counsel. Chrysler did so and settled the case within a few months. I was then placed in the role of overseeing all class action litigation and serving as settlement counsel as well. Most in house counsel are not sufficiently immersed in the litigation, however, to serve as settlement counsel or simply do not have the time.

• As a former litigation partner in an AmLaw 100 law firm, do you wish you'd had inside settlement attorneys working side by side the litigation team? 

Because of my experience as in house counsel settling cases, I was always the partner urging my fellow litigators to evaluate settlement possibilities. For all the reasons set forth in my answers above, most large law firms do not embrace the idea of institutionalizing an in-firm settlement section. One exception was Wilmer Cutler in DC which did set up an ADR group within the firm with the idea that clients would make use of it. I don't know whether it still exists. I still think it is a great idea, although not as effective as the hiring of a completely separate firm or individual to explore settlement.

• Doesn't it take outside settlement counsel an unnecessarily long time to "get up to speed" on a major piece of litigation -- thereby making it less cost effective than simply hiring a mediator to help the litigators settle their own cases?

Not at all.  When I take on an assignment as settlement counsel I provide the client with a budget that includes a separate breakdown for "up to speed" time. While I need to understand the merits of the client's defense I do not need to read all the briefs since I generally am not called on to argue the merits of the case. Most importantly, I must fully understand what the client's interests are and what it is willing to offer up in settlement. For better or worse, what I offer is a very low cost, low risk means of exploring and settling complex litigation. 

Thanks Lew!  I can think of a couple of complex anti-trust, securities and IP cases I could have used your services for.  I hope this interview gets the word out to attorneys feeling pressured to settle a difficult case but unable to get the other side to the bargaining table.

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. . . because the jury is about to transform your $1.7 million commercial dispute into $352.7 million verdict . . .  read all about it in this 2001 story, After $1.7 million landed in the wrong account, CoreStates insisted it could seize the money. It was A VERY COSTLY MOVE.

I give you only the article's conclusion, daring you to click on it without reading it to the end.

The overarching question of why the bank didn’t settle remains a puzzle.[The Bank's counsel] thought he gave the bank solid advice. All the lawyers who joined in the bank’s defense hold to that position: Legally, they contend, the bank was within its rights in seizing the $1.7 million.

But the case ran away from them. It got bigger and bigger and worse and worse. And there was no stopping it. One defense lawyer observed, “It went to hell in a handbasket.”

Maurice Mitts says his client is willing to call it quits for the $56 million. But First Union still isn’t willing to pay a big number. Mitts isn’t surprised.

“ ‘We know the law, we are the law, and too bad for you,’ ” Mitts said. “That’s been their attitude all along.”

Thanks to the Philadelphia law firm of Mitts Milavec, LLC for fighting the good fight and posting this dynamite legal tale.