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(pictured:  the indispensable McElhaney Trial Notebook)

From the ABA Journal E-Report, comes James W. McElhaney's article Legal Writing That Works :  Persuasive briefs are the product of tough choices about substance, style 

"Writing a brief," counsels McElhaney, is like trying a lawsuit."

 You start with your theory of the case—the basic idea that not only explains the legal theory and the factual background but also ties as much of the evidence as possible into a coherent, credible whole.

That means making choices. You throw out arguments that aren’t plausible.

You pick between the inconsistent legal theories. You cull out the weak points. You toss out whatever gets in the way. You discard what doesn’t need to be said, even if it doesn’t hurt.

What’s left is tight. Lean. Spare. It crackles with power because it’s undiluted with stuff that doesn’t matter.

Doesn't trial and motion practice focus on the parties' positions, you ask, and the settlement of litigation on the parties' interests.  

Yes, but only after you've established that you have the ammunition necessary to make your adversary your partner in the mutual problem of making the litigation go away for a price (or on terms) that make the negotiated agreement a far better option than potential victory at trial.

I tell people that I prefer the symmetrical to the "asymmetrical" lawsuit -- both as a litigator and as a mediator.  What is an asymmetrical lawsuit?  One where the plaintiff is an individual represented by an over-burdened sole or small practice contingency fee litigator and the defendant is a repeat player defendant -- an insurance carrier or other "deep pocket." 

Why?  Because all too often the plaintiff is unwilling (or unable)  to devote the resources necessary to pose a real threat to the defendant's interests (costs of defense and potential verdict or judgment) despite the merits of the plaintiff's case.

In these cases, the defendants not only can afford to wear the other side down in court (why should I settle?) they often resist settlement because they firmly believe they are victims of legal extortion (yes, even insurance carriers who work by and through often beleaguered claims adjusters -- people -- who resist and resent being pushed around by an aggressive opponent who -- because of lack of preparation -- appears to be bluffing).

The solution?

Although it is important to convince the mediator that your case has real merit and genuine potential to result in a harmful judgment for your opponent, it is critical to impress your opponent with:

1. Your theory of the case in which the evidence tells not only a coherent, credible story, but one of injustice that a court or jury might respond to with sufficient passionate intensity to inflict some "unjust" harm on your opponent; and,
2. Your ability to make good choices -- "throw[ing] arguments that aren't plausible," and backing up those that are with the least amount but most compelling detail and "pick[ing] between the inconsistent legal theories. . . . cull[ing] out the weak points . . . toss[ing] out whatever gets in the way. . . [and] discard[ing] what doesn't need to be said. . . "

If "[w]hat remains "is tight. Lean. Spare. . . . crackles with power" you'll press your opponent to do some intensive interest-based negotiation to arrive at a settlement that is best for both of you.

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(photo:  Just a Minute by Jon Lucas)

We seem to be in "five rule land."  Today's five "One Minute Negotiation Tips" (courtesy of the Los Angeles County Bar Association) come from attorney-mediator (and good friend) Linda Bulmash. 

Her five tips below:

WINNERS OUTWIT AND OUTCHARM THEIR COUNTERPARTS

"Civility is not a sign of weakness!" President John F. Kennedy

1. Negotiation is not a contest. In other words getting as much as you can does not mean beating the other person. You seldom have so much leverage that they will agree to a deal that gives them nothing.

2. WIIFM (What’s In It For Me?) Your counterpart is continually asking “What’s in it for me?” Never assume your counterpart knows what he or she has to gain from a settlement. Take time to not only find out what you want but spend time identifying what they want. Then make sure you spell out the benefits to them of your proposal.

3. Show respect for and acceptance of their position: Take the chip off your shoulder before starting the negotiation. Never attack another person's ego and self-worth; if you do, they will be more resistant to even the most beneficial settlement terms.

4. Be Persistent. No matter how great the differences, the final outcome often is not apparent until after extended discussions. Be persistent -- do not give up until you have examined all possibilities.

5. Always consider "worth" analysis. "Cost/benefit" considerations are not the only driving force in a negotiation. Each issue in a negotiation has a different value/worth to each participant. You can often give your counterpart things that will satisfy their "worth" needs, without giving up an essential deal point for yourself. Examples of this could be that timing of payments would be “worth” enough to lower the demand.

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(photo by Jeff Cockshaw)

If you're not already acquainted with Harvard Business School's free weekly "Working Knowledge" newsletter, do let me introduce you here.  There's no better negotiation advice on the internet and when it's all too much reading, skim the concise "Executive Summaries" or, what the heck, check here from time to time and I'll alert you to the most interesting articles posted there. 

This week, Harvard professors John Davis and Deepak Malhotra give us Five Steps to Better Family Negotiations which, I must say, applies to every settlement negotiation that I help facilitate.

My own "executive summary" with excerpts below.  

1. Analyze the negotiation space:  this is a fancy way of saying identify all parties who have an interest in the matter being negotiated.  This seems obvious until you sit down with pen and paper (or keyboard and screen) and diagram not just the decision makers but also those, for instance, who will be called upon to put the terms of the agreement into action.  As Davis and Malhotra advise

 many of the parties affected by a negotiation, or able to affect it, will be around for a long time. It is dangerous to negotiate only considering the interests of those at the bargaining table when those who are not at the table will be affected by what is negotiated and can assert their rights or power in the future.

This doesn't mean that you should bring all of these people to the table, but that you are far more likely to achieve a durable settlement agreement if everyone's interests have been vetted prior to sending company representatives to the bargaining table.

2. Don't try to beat the other side

As Davis and Malhotra note, "most successful negotiations entail the possibility of mutual value creation, compatible if not aligned interests, and cooperation."  Although this advice also helps insure that an agreement will be durable, it also fosters an atmosphere in which the greatest degree of innovative "value creating"  problem solving can take place.

3. Understand the other party's interests, constraints, and perspective

If you think this applies only to family business negotiations, think again.  Robert McNamara (defense secretary under Kennedy and Johnson) lists "empathize with the enemy" as his first rule of war.  (for the illustrative story, follow this link and click on 1962, where you'll hear McNamara discuss (or where you can read a description of)  the negotiations that averted nuclear war with the Soviets during the Cuban Missle Crisis).  

Close to home, Davis and Malhotra advise: 

[T]o get what you want in negotiation, you often need to understand the other side's needs and interests so that you can "give a little to get a little (or a lot)." Even if the other side is entirely willing to help and is ready to give you what you want, it may be critical that you understand the constraints that he or she faces in meeting your demands. In other words, effective negotiation requires that you understand the other side's interests and constraints, and that the other party understands your interests and constraints. 

4. Avoid single-issue negotiations: identify and negotiate multiple issues simultaneously

Davis and Malhotra again:

Negotiators who negotiate multiple issues simultaneously are more easily able to recognize value-creating tradeoffs. . . . While any multi-issue negotiation is going to be complicated, the likely outcome is considerably worsened when negotiators become overly focused on a single issue or dimension. The far superior approach is for all parties involved to work together to identify all of the issues that are relevant in the current negotiation, and then identify which issues are most important to each person (and which issues each person can concede on).

5. Negotiate over interests, not positions

As Davis and Malhotra note, while the negotiating parties' positions may be irreconcialble and non-negotiable, often their interests can be satisfied without requiring them to compromise their positions.  For a lengthier discussion of interest-based bargaining, click here.

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(photo by T.W. Collins)  I must tell you that I have not read this new book on negotiation, but it looks intriguing and I intend to order a copy for myself.  It's entitled:  Making Money Talk:  How to Mediate Insured Claims and Other Monetary Disputes by J. Anderson Little

Brief review:

Making Money Talk is a valuable contribution to the conflict field. Andy Little correctly identifies the weakness in traditional needs-based mediation for quite a wide variety of cases, yet shows how the basic value of a facilitative, client-centered, process-oriented, communication-focused approach is still essential to money cases. This guide is well written and presented--it's a pleasure to read."  Bernie Mayer, Professor, Werner Institute for Negotiation and Dispute Resolution, Creighton University, Omaha, NE

The publishers say:

Learn how to effectively deal with the peculiar problems of traditional bargaining that you face when negotiating the settlement of civil litigation cases. This new guide written by an experienced litigator and mediator will help you understand why negotiations of insured claims are difficult to get started, why they become increasingly emotional as the parties engage in round after round of proposals and counter proposals, and how they can be settled with models and techniques that have been tested in thousands of civil trial court mediations.

With these proven models and techniques--essential for the novice or seasoned professional--you will:

• gain a better understanding of the dynamics of money negotiations
• be able to identify the recurring problems of traditional bargaining
• learn facilitative tools and models to use when positional bargaining is unavoidable

In addition, this resource provides litigators, negotiators and insurance claims representatives with the strategies necessary to prepare for settlement negotiations and avoid the many pitfalls that exist in the negotiation and settlement of civil litigation. If you're involved in a negotiation that involves a monetary settlement, this book is an invaluable tool to help you reach a favorable goal. 

$42.00 regular price; $35.00 [ABA] Section of Dispute Resolution member price

 

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(Everything Old is New Again from All That Jazz; my favorite line from this movie:  [stand-up comedian):   This chick, man [referring to Kubler-Ross] without the sole benefit of dying herself, has broken down the process of dying into five stages: anger, denial, bargaining, depression and acceptance. Sounds like a Jewish law firm. 'Good morning, Angerdenialbargainingdepressionacceptance!'. )  

Meet Early, Settle Often is music to our ears here at the Settle It Now Negotiation Law Blog. 

The "new idea" is called "structured negotiation" (a lot like a multi-part construction dispute mediation) and the big news is that lawyers are doing it for themselves.

Now I don't really like to talk about how we used to walk to work in three feet of snow (no compuers, no word processing, no faxes, restricted access to copy machines, no Lexis/Westlaw) but we really did negotiate our own settlements on a weekly basis without filing suit first. 

No mediators.  Look Ma! no hands.

As Ken Cloke says, "mediation is a profession in pursuit of its own suicide," i.e., we really do want you to have and use these skills to negotiate your own settlements.  Really, we do.  

So I'm pleased to give you a link this morning to a Law.com article, California Attorneys Meet Early, Settle Often.  Excerpt below: 

Linda Dardarian and Elaine "Lainey" Feingold are in the midst of a long winning streak in disability access cases -- and so are their opponents.

In eight years, the San Francisco Bay Area plaintiffs lawyers have settled more than two dozen disputes without filing suit or even bringing in a mediator.  . .

When Dardarian and Feingold send demand letters to organizations they claim are violating disability access laws, they offer to avoid litigation by sitting down with a small group of defense lawyers and technical experts and working out an agreement, a format known as structured negotiation. The letters generally mention the legal basis for a claim of attorney fees, as well, Dardarian said.

From square one, the plaintiffs lawyers' success depends on carefully balancing cooperation with the looming threat of litigation. . .

"A lot depends on the trust you have with people and the way in which they approach you," she said.

Stewart said she knew Dardarian and Feingold were "credible, capable" lawyers from previous dealings with the two. More importantly, though, their demand letter laid out their claims and their desire to find a resolution.

"How can you say, 'No, we won't talk to you?' It's stupid, in most circumstances," said Stewart, who turned over the dispute to Julia Friedlander, the MTA's general counsel, and Deputy City Attorney Christiane Hayashi.

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The following excerpt from the PBS Benjamin Franklin webpage, Citizen Ben, demonstrates the wisdom of Lax' and Sebenius' advice that every successful negotiation requires moves away from the table to set  up the most promising situation once your'e at the table. 3-D Negotiation.

Here, those "away from the table" negotiation moves led to the founding of our nation.   

In 1781, Benjamin Franklin was in France. .  .  Franklin understood the French and knew that real diplomacy wasn't accomplished at the negotiating table, but at the dinner table. He spent a great deal of time in the salons and at dinner parties where things could be discussed in an informal manner. In this way, he won the trust and respect of the French court.

Although the Continental Congress wanted to negotiate a treaty directly with Great Britain, the French wanted to arrange for a three-way treaty that would end the war between France and England, as well as between England and the colonies. There was some concern on the part of the Congress, as well as other commission members, that Franklin might be unduly influenced by France in the negotiations. Months passed and various offers and counteroffers were made by the former colonies and Great Britain. In addition, France was negotiating settlements with Great Britain that involved portions of the North American continent.

Adams and Jay made an end run around France to negotiate a treaty directly with Great Britain. The British made an incredible offer, one that gave the Americans almost more than they were demanding. Franklin recognized that the British offer was the best that could be had. The French were offended that the Americans had gone behind their back.

Franklin used his connections and his diplomatic skills to convince the French that Adams and Jay had acted out of lack of propriety, not hostility.

In late November 1782, the Paris pact was signed and sent back to Great Britain and the American Congress for ratification.

Thanks to Franklin's diplomacy, along with Adams' and Jay's work, the United States was recognized as a separate and equal nation by the world's great superpowers, France and Great Britain.

Happy 4th of July!

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(Hollywood Bowl Fireworks by Jodi Tripp)

 

There's a nice article on those situations in which attorney-mediators might serve litigants as well, or better, than former jurists in the July 2 edition of Lawyers Weekly ADR (give them your name, rank and serial number and you'll get a free 6-week trial to see whether a subscription is worth the price).

The article is entitled Advantages Flow Both Ways When Attorneys Become Mediators and it is written by attorney-mediator F. Peter Blake /*.  

Except below:     

 

A lawyer with extensive courtroom experience is able, as a mediator, to understand and communicate the risks of mixed-blessing jury findings that give with one decision about a monetary award and take back with another that slashes the amount because contributory negligence was perceived.

To be sure, in court, even when you win, you don't always come away with what you thought you had won.

In the ADR process, parties often hear the "other side" of the case for the first time. It reinforces a humbling truth worth remembering: Very rarely does one side have a monopoly on valid arguments.

Just as important is the mediator's ability to avoid undercutting attorney-client relationships or compromising legal strategies. A knowledgeable lawyer is well positioned to navigate that sensitive course, respecting each side's need to avoid feeling coerced or backed into a corner.

The ADR process provides an open forum conducive to helping the parties involved in a dispute address the issues in good faith, explore acceptable remedies and shape the outcome. That sense of self-determination and of having a timely "day in court"— without gambling on six jurors unfamiliar with the issues — greatly increases the likelihood of satisfaction in the end.

When lawsuit adversaries emerge with an acceptable agreement they shaped after being heard by a dispassionate observer retained at their shared expense, justice is served. Sometimes the deal goes beyond dollars and cents to include an apology or expression of regret — a meaningful gesture no jury can provide.

Though I agree with Blake's analysis of the benefits of hiring an attorney-mediator, he writes primarily from an evaluative rather than a facilitative viewpoint.  I would therefore add the following to his list, particularly where the settlement being negotiated is one necessary to settle commercial litigation.  

• because most attorneys have run their own businesses (or at least participated in the management of their law firms) they are able to understand the business needs, desires, interests and fears of the commercial adversaries, i.e., they can speak the litigants' language
• former commercial mediator litigators, particularly when hired in a specialty industry such as the garment, manufacturing, professional services, and software  businesses (to name a few) also understand the complex relationships between counsel and client, as well as the communication gaps that can occur over time during the litigation of any commercial case. 
• the experienced attorney mediator not only knows how the lawyer views the case, having now mediated hundreds of commercial cases, s/he also knows how the clients continue to view the dispute (as a commercial, not necessarily a legal, problem) and how wide the gap between those two points of view can be. 
• because the attorney-mediator first made his living in private practice based upon his continued beneficial relationship with his clients and his reputation in the community, s/he is not only attuned to the way in which lawyer-client communication gaps can be bridged, but also how to leave both parties with their sense of justice, dignity, professionalism and humanity intact.
• perhaps most importantly, a commercial litigator-mediator knows how to plan, execute and close a deal.

There are more, but I must leave you to begin my holiday.

Happy 4th of July to you all!

________________________

/*  Blake is a certified general civil mediator and founding partner at Detroit-based Blake, Kirchner, Symonds, Larson, Kennedy & Smith, P.C. His more than 25 years of experience includes mediations, facilitations, arbitrations and special case evaluations as well as representing plaintiffs and defendants in a range of civil litigation matters.

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We recently posted a brief discussion about "Winning" the Negotiation/ Mediation.  Though not statistically significant, I can nevertheless report that, aside from the all-time hands-down reader-favorite post I'm Billing Time, Winning the Mediation has had more "hits" than any other.  

Forget collaboration.  People want to win.  (a more serious post about this later).  And the reason most of us feel like such inadequate negotiators?  Because we buy retail.  As was pointed out to me in my very first mediation course, Americans typically bargain over only two purchases in their lifetimes:  new and used cars and real estate.  We're just not that into it.

That said, help is on the way from our good friend, mediator Linda Bulmash.  Text from the recent LACBA announcement below.  Reason alone to join LACBA.

Los Angeles County Bar Association Announces the Launch of a New E-Newsletter "One Minute Negotiation Tips"

Have you ever walked away from a good deal because an agreement could not be reached….or wondered whether you paid too much… or accepted too little…or felt so rattled by the other side’s hardball tactics that you lost sight of your main objectives? Have you ever negotiated a great deal but can’t figure out why you succeeded so that you can replicate the “win” again?

Now you can be a negotiation winner. Now you can stop yourself from paying too much, settling for too little, losing the deal you want or letting the other side get the upper hand. Never again will you show up at mediation or a negotiation wondering how to handle the mediator or the other side.

ALL ATTORNEYS negotiate on a regular basis: Litigators negotiate to settle cases; Real Property and Business Attorneys negotiate terms of the transaction; Tax Attorneys negotiate with taxing authorities; Family Law Attorneys negotiate when cases are sent to mediation. You get the idea. But who has time to take a negotiation class? LACBA is offering an alternative, “One Minute Negotiation Tips”, written and edited by Linda Bulmash, Esq. a full time professional mediator and ADR Services and a negotiation expert. This free member publication will be delivered to you by email, once a month.

One Minute Negotiation Tips will be more than just a newsletter; it will be a forum for discussion sharing of ideas and asking questions. If you have a negotiation tip that you would like to share, you will be able to submit it for future publication. If you have a question or a hypothetical you would like to pose, we encourage you to submit it.

For more information regarding this new service, please contact Joanne Williamson, LACBA’s Director of Internet Services at mailto:jwilliamson@lacba.org

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(Photo by lostulysses)

In the political arena, the power of framing is generally called "spin."  You needn't, however, be an expert at renaming torture "coercive interrogation techniques" to become skilled at framing your demands during negotiations. 

The Power of Framing

Frames are cognitive shortcuts that  . . . help us organize complex phenomena into coherent, understandable categories.

When we label a phenomenon, we give meaning to some aspects of what is observed, while discounting other aspects because they appear irrelevant or counter-intuitive.

Thus, frames provide meaning through selective simplification, by filtering people's perceptions and providing them with a field of vision for a problem.

To demonstrate the power of framing, researchers asked subjects questions that contained suggestions of size, number and duration.  The impact of the framing terms -- short and tall, for instance -- were striking:

When asked how long a movie was, research subjects' average estimate was 199 minutes, 69 minutes longer than when they were asked how short the movie was (130 minutes).

When asked how tall the basketball player was, research subjects' average estimate was 79 inches, ten inches taller than when asked how short he was (69 inches).

Research subjects were also profoundly affected by numerical ranges.  When asked whether they'd tried "5 or 10" headache products, subjects' answers averaged 5.2.  When given the option of "2 or 3" headache products, they averaged 3.3.

A common negotiation "frame" is to treat the difference between the parties' offers and counter-offers at the point of impasse as the total amount in controversy.  If, for example, the Plaintiff opened negotiations at $1.5  million and has, in the course of negotiation moved to $600,000, while the defendant commenced negotiations at $250,000 and has moved to $550,000 at the point of impasse, the mediator will generally focus upon the reasonable division of the $50,000 delta rather than upon the total $550,000 offer or the total $600,000 demand.   

Focusing solely upon the value that separates the parties reframes the subject matter of the negotiation as the avoidance of the dispute's continued cost rather than the "fair," or "just" or "reasonable" value of the loss at issue.   

And don't think that attorneys, judges and sophisticated commercial clients are immune to the effects of anchoring and framing.  

The Power of Anchoring

We've discussed before Adam Galinsky's excellent short article When to Make the First Offer in Negotiations. 

As Galinksy notes:

Research into human judgment has found that how we perceive a particular offer's value is highly influenced by any relevant number that enters the negotiation environment. Because they pull judgments toward themselves, these numerical values are known as anchors.

Continue Reading...

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(photo by Maureen Flynn-Burhoe)

We follow high-level negotiations, as well as the small commercial dispute, here.  No matter the stakes, the dynamics are the same.  See, for example, today's AP article, Collapse of WTO Talks Puts Trade Deal in Limbo.

What's at stake? 

a new world trade pact aimed at adding billions of dollars to the global economy and lifting millions of out of poverty.

Who are the negotiating parties?  The United States, the European Union, Brazil and India. 

Are there feelings, i.e., emotions involved?  Have we mentioned recently neuroscientist Antonio Damasio's research on people whose brain injuries interfered with their ability to feel emotion?  They could make endless pro and con lists, but couldn't make decisions.  Why?  Because there is a pro and con to every choice we make.  Paper or plastic?  Fish or Meat?  Peace or warfare?  Settle the lawsuit or try it?  

In the absence of a feeling that makes us desire one outcome more than another, we are at a total loss.  

How does impasse feel?  If you'd been a WTO negotiator, your

emotions rang[ed] from anger to confusion [as they] left Potsdam on Friday knowing they had failed to break a six-year logjam between rich and poor countries over eliminating barriers to trade in farm produce and manufactured goods.

And the angry and confused government officials?  Do they think their own bargaining position is to blame or do they believe that their negotiating partners are acting in bad faith?  Let's see.

European and American officials questioned Brazil's intentions and wondered if it intentionally blocked progress to curry favor with developing countries, many of whom were unhappy with the private negotiations among the four powers.

Brazilians accused Washington and Brussels of agreeing beforehand to protect their agricultural interests.

Many officials criticized Indian Trade Minister Kamal Nath for arriving late on Tuesday after missing a flight and having a return scheduled ahead of the summit's end.

All sides said they negotiated in good faith.

Sound familiar?

The reasons for impasse and ways to break it will be the subject of a lengthy weekend post.

In the meantime, here are two prior posts on impasse -- Negotiating Past Impase and Breaking Impasse.  

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Check out Bob Steinberg's article in the San Francisco Daily Journal, Influencing the Mediator. 

Bob's article -- the tip of a trend -- stresses "winning" the mediation by canny, savvy, sophisticated and sometimes just flat-out tricky negotiating tactics. 

Like what?   Like squeezing the mediator into a small room at a round table with your team to undermine his authority on your side while at the same time proffering a large rectangular table to the opposition in the hope that the mediator will sit at its head, thereby increasing his influence upon your opponent (assuming, that is, you decide you want the mediator influencing your opponent and aren't concerned that the buddy-buddy atmosphere you're creating won't lead to disclosures you'll later wish you hadn't made).

I know Bob and like him.  He's shrewd and frighteningly intelligent.  I wouldn't play poker with him or black jack because I know he's capable of actually counting the cards.  He probably knows more about negotiation than most litigators of similarly seasoned years because, as a transactional attorney, he surely negotiated and closed more deals in a single year than his adversarial counterparts did in a decade.  

And just as some clients choose their litigators to fit the fight (an unreasonable obstreperous fight-ready trial lawyer for case A and a cordial, collegial sort for case B) lawyers will want to choose their mediators to fit the type of work they believe that mediator will do best.     

Still, I have reservations about Bob's proposals (which are increasingly being made by many attorneys and mediators) including:

• the benefit that might be lost by continuing to treat your adversary like . . . . well . . . an adversary, rather than as someone with whom a creative business deal might be struck if the attorneys and the mediator would loosen up their control long enough to let the business people do what they do best -- plan for a successful future by drilling down into both parties' commercial interests in an innovative way (cf. Sun Microsystems' Jonathan Schwartz's motto -- Innovate, Don't Litigate); and, 
• the likely dreadful set of unanticipated consequences that too often flow from attempting to control an inherently unpredictable and multi-determined process -- one with so much greater depth, texture, nuance and possiblity than any poker game could ever possess.

There is certainly a time for measured responses, poker faces, cozying up to the mediator or letting him (or her!) know who's really the boss.  I don't believe, however, that flat-out game-playing and "psyching out" the other side will result in the type of agreements you and your clients are looking for -- not only creative ones, but also durable ones. 

Go ahead, let the client take the lead once in awhile.  Jim Smith didn't become the head of a division of Lockheed or Joe Richmond the President of Software, Inc. by changing the size of the conference table.  

And before abandoning this topic, let me leave you with a recent observation by Schwartz about leadership at Sun Microsystems from an interview entitled The Education of Jonathan Schwartz by Stephen Shankland of CNET News.com. 

[a] leader has courage, and courage is the courage to innovate, the courage to collaborate, the courage to act with integrity--because that actually does take some courage--and the courage to do so with pace. You've got to be willing to brook the criticism and the critique from those who don't see the world the way you do. When people look back at who is Sun, they are not looking me; they are looking at 35,000 people.

[As the leader of Sun Microsystems] I want to do a good job of building a leadership culture . . .  I don't want there to be one voice [from Sun] to the marketplace, but I want that somewhere in that cacophony [of other Sun voices] to be a very clear and consistent message: here is what we're all about, here is what we can do and here is how we are going to march forward.

Rock on.

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(right:  Lawyer as Satan:  Al Pacino in The Devil's Advocate) 

Gini Nelson at Engaging Concepts recently alerted me to John Lande's recent and excellent article, Principles for Policymaking About Collaborative Law and Other ADR Processes.  There is much in this article to recommend it, including observations and recommendations about regulating ADR policy and practice.   What caught my attention were Lande's comments about "bad faith" mediation, a topic we've been following in the Couts.  

Good faith in mediation, notes Lande, "is like mom and apple pie—it’s hard to be against them.  .  . Many people  

think that they know bad faith when they see it. They “know” that bad faith in mediation is when one side—the other side—refuses to make a new offer or what they view as a “reasonable” offer.  This conduct clearly grieves some litigants, lawyers, and judges who would like the courts to sanction the alleged offenders.

In virtually all the final reported opinions on this issue, however, the courts have decided that this conduct is not sanctionable bad faith.  The courts have decided that it would be inappropriate to sanction this behavior, which is impossible to adjudicate without evidence about communications in mediation and the participants’ state of mind.

Even proponents of good faith rules recognize that judicial second-guessing of participants’ states of mind would be an inappropriate judicial encroachment into the mediation process.  As a result, the judicial interpretation of “good faith” has come to mean attendance at mediation (possibly with a representative having “sufficient” negotiation authority) and submission of any required premediation materials.

The result is that the good faith rules do not prohibit what people think of as bad faith.

"Bad Faith" Negotiation Strategies and Tactics

In our recent survey (with 78 responses) participants were asked to identify which of several acts  constituted bad faith negotiation practices or strategies:

Those that garnered the most votes were parties lying about facts important to resolution (65.83%) -- which would likely constitute grounds for rescinding any deal reached by the parties due to fraud -- and a refusal to compromise "without good reason" (59.76%).  Withholding information important to obtaining a "fair" deal garnered less than half but nevertheless a substantial number -- 40.51% -- of the "votes."  Again, this type of behavior could well constitute fraudulent concealment and is subject to its own set of sanctions -- rescission and damages. **

Refusing to compromise with good reason (4.5%) however, and not compromising "enough" (3.4%)received so few votes that we must conclude our survey respondents accept these activities as perfectly appropriate when parties are attempting to negotiate  settlement, whether in a mediation or outside of it.

The Importance of Reason Giving

My friend the settlement Judge Alex Williams likes to tell his disputants that he needs "a number and a reason" when shuttling offers between the parties.

As we've discussed before, any reason whatsoever, "reasonable" or not has a salutary effect upon people's willingness to accomodate their fellows See "Why -- an Anatomy of Explanations").    More on the dynamics of reason-giving in negotiating the settlement of your disputes tomorrow.

___________

*  For individual responses to the question, "what constitutes bad faith negotiations?" click here.

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Attorneys routinely claim that their negotiating partners are acting in "bad faith."  But what does that mean?

In our recent Negotiation and Justice Survey, we asked our attorney, negotiator and mediator respondents (78 of them) to define bad faith in negotiations.  Having no authority to settle, refusing to listen to the other side, and failing to bring the decision makers to the negotiation are the most commonly cited instances of "bad faith" tactics in negotiation or mediation.

In response to our own formulations of potential bad faith negotiation tactics, the results were as follows:

A party lies about facts important to resolution                                      83%
A party lies about its "bottom line."                                                           23%
A party withholds information important to a "fair" deal.                      51%
A party refuses to compromise (with good reason)                              4.5%
A party refuses to compromise (without good reason)                       59.76%
A party doesn't compromise enough                                                        3.4% 

Here are all of the "unique" responses: 

1. stonewalling or frustrating the process unnecessarily 
2. acting out of a desire to punish the other or vindicate one's self
3. using the process for discovery
4. proceeding with no intention of exploring opportunities for settlement
5. taking advantage of a power imbalance which the mediator does not address and ameliorate
6. consciously taking advantage of the mediator's bias
7. negotiating unreasonably or intractably
8. prolonging the process by engaging in irrelevant conversation so that all parties are not given equal time
9. using hardball tactics meant to corner or trick the other party into submission
10. arriving unprepared and refusing to acknowledge it (2 separate comments)
11. threatening to engage in future unfair practices 
12. being unwilling to go through the entire process
13. asserting and maintaining an unreasonable position
14. failing to show up 
15. refusing to listen (5 separate comments)
16. refusing to provide necessary documents 
17. arriving with no settlement authority or without decision makers (6 separate responses) 
18. misrepresenting or mischaracterizing the client's case to one's own client
19. refusing to discuss interests
20. persisting in discussing positions
21. trying to bully the mediator or the other party

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Thanks to Diana Skaggs of the Kentucky Divorce Law Journal for alerting us to the Kentucky Law Blog's post Court of Appeal Affirms Trial Court's Award of Mediation Fees for Party Failing to Attend

Here in California, and I suspect in many other states, the Court cannot sanction "bad faith" negotiations because all of the parties' communications at a mediation are confidential.

I've often had attorneys ask me, however, whether they can bring to the Court's attention the fact that a claims adjuster, for instance, did not "show" at the mediation.  Can't they seek sanctions for that "bad faith" they ask.    

This is the question the Ky Law Blog asks and answers today under Louisiana law as interpreted in a nonpublished appellate opinion, Sullivan v. Anderson.  In that case, writes attorney and blogger Michael Stevens,

the defendant's attorney . . . arranged for the date, time, location, and mediator and notifed the pro se litigant who did nothing.

[A]ffirming [the trial court] . . . a Jefferson Circuit Court . . . held that although a party was not obligated to attend the "agreed" upon mediation, he was obligated to notify the other side he would not attend so as not to waste the mediator's time. . . [The appellate court opined]

We agree with [the pro per plaintiff] Sullivan and the trial court that Sullivan was not obligated to attend the mediation since it was not ordered by the court. However, [defense counsel] did not have any reason to know that the parties had not agreed on mediation since Sullivan did not inform her that he did not agree to the arranged mediator and mediation date. [*]

 A Kentucky court “may invoke its inherent power to impose attorney's fees and related expenses on a party as a sanction for bad faith conduct, regardless of the existence of statutory authority or remedial rules.” (citations omitted).

The Parade of "Bad Faith" Mediation Horribles

Mr. Stevens justifiably marches out the following parade of horribles that this opinion could lead to, such as awards of sanctions when:   

• the insurance defense lawyer shows up at mediation without the adjuster or the insured and rel[ies] upon the adjuster's attendance by telephone[;]
• the adjuster in attendance . . . not hav[ing] settlement authority extending to the policy limits[;]
• the adjuster ha[ving] to leave early[; and,]
• the adjuster with higher authority [not being] available by phone, or . . . delays in contacting the adjuster by telephone[.]

Are Sanctions Available in California for "Bad Faith" Mediation Practices?

California's mediation privilege is codified in Evidence Code sections 1115 et seq.  As most California practitioners are well aware, our Supreme Court has strictly construed these provisions.     

Because Evidence Code section 1120 expressly exempts any "agreement to mediate a dispute" from the protections of section 1119, a California court could presumably sanction a party for failing to appear at an agreed upon (or court ordered) mediation.  

Here in California, however, an award of such sanctions presumably could not include all or part of the mediator's fee because our Supreme Court has held that a party may not be ordered to pay a private mediator in the first instance.     

Moreoever, a party''s mediation conduct, such as a defendant's failure to bring a claims adjuster or the plaintiff's attorneys failure to bring his client, would not likely subject either party to sanctions.  

Section  1119(c) prohibits a party from disclosing "[a]ll . . . negotiations . . by and between the participants in the course of a mediation or a mediation consultation."  Interpreting this section broadly and strictly as our Supreme Court requires would likely result in the denial of sanctions because the choice of individuals to represent party interests is an integral part of the "negotiation" between the parties.  **     

Finally, section 1119(a) most certainly forecloses an award of sanctions based upon offers made or not made during -- or authority possessed or not possessed at -- a mediation.  Those facts could only be learned as a result of something "said . . . for the purpose of, in the course of, or pursuant to a mediation" and therefore fall squarely within section 1119(a).    

_________________

**  We find this one of the strangest and most illogical formulations we've heard from any appellate court anytime, anywhere -- a dangerous one at that -- and contrary to the law of contracts.  Since when does an agreement exist when party A proposes X to party B, who does not respond?  Since when is an agreement formed when party B neither accepts nor rejects it?   

*** The American Heritage Dictionary (2000) defines the verb "to negotiate" to mean and include, inter alia, "[t]o arrange or settle by discussion and mutual agreement: negotiate a contract."    

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(photo by Ashley Dinges)

If you're entering the job market, you'll want to check out Forbes' Magazine's Tips for Negotiating Your First Salary.

If you do not negotiate your first salary, you stand to lose half a million dollars over your lifetime. 

Who says?  The women who brought you Women Don't Ask: Negotiation and the Gender Divide

And for women entering the job market, here are the grim statistics: 

• women's earnings relative to men's have stagnated at 73.2 percent.
• In surveys, 2.5 times more women than men said they feel "a great deal of apprehension" about negotiating.
• Men initiate negotiations about four times as often as women.
• When asked to pick metaphors for the process of negotiating, men picked "winning a ballgame" and a "wrestling match," while women picked "going to the dentist."
• Women will pay as much as $1,353 to avoid negotiating the price of a car, which may help explain why 63 percent of Saturn car buyers are women.
• Women are more pessimistic about the how much is available when they do negotiate and so they typically ask for and get less when they do negotiate—on average, 30 percent less than men.
• 20 percent of adult women (22 million people) say they never negotiate at all, even though they often recognize negotiation as appropriate and even necessary.

Women Suffer When They Don't Negotiate

• By not negotiating a first salary, an individual stands to lose more than $500,000 by age 60—and men are more than four times as likely as women to negotiate a first salary.
• In one study, eight times as many men as women graduating with master's degrees from Carnegie Mellon negotiated their salaries.
• The men who negotiated were able to increase their starting salaries by an average of 7.4 percent, or about $4,000.
• In the same study, men's starting salaries were about $4,000 higher than the women's on average, suggesting that the gender gap between men and women might have been closed if more of the women had negotiated their starting salaries.
• Another study calculated that women who consistently negotiate their salary increases earn at least $1 million more during their careers than women who don't.
• In 2001 in the U.S. women held only 2.5 percent of the top jobs at American companies and only 10.9 percent of the board of directors' seats at Fortune 1000 companies.
• Women own about 40 percent of all businesses in the U.S. but receive only 2.3 percent of the available equity capital needed for growth.
• Male-owned companies receive the other 97.7. percent.

Women Have Lower Expectations and Lack Knowledge of their Worth

• Many women are so grateful to be offered a job that they accept what they are offered and don't negotiate their salaries.
• Women often don't know the market value of their work: Women report salary expectations between 3 and 32 percent lower than those of men for the same jobs
• men expect to earn 13 percent more than women during their first year of full-time work and 32 percent more at their career peaks.

You Can Do It

It's not that we're not good negotiators.  A Harvard study (which I'll find & link to later) showed that women negotiated as successfully as men when they were negotiating for someone else!

So just pretend you represent yourslef and go for it.

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Nice perceptive piece on negotiating fees over at the Consultant Journal blog entitled Negotiating vs. Giving Up.  Thanks for the tip Andrea.

The above negotiation tip is sponsored by the acronym ZOPA.

Your mediator should never never never never let the parties believe they've reached impasse until the mediator is as certain as she can be that there is no Zone of Potential Agreement. 

How does s/he know?  Tune in for tips to knowing the mind of your mediator.

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As I mentioned yesterday, I've launched a new IP ADR Blog with IP attorney and triple-A arbitrator, Les Weinstein.

My mediation practice has been developing in the direction of an IP specialty for the past year. Nearly twenty years ago, Les advised me to specialize at a time when I was saying it's always best to be a generalist.   

He was right, of course, and in 1989, I moved to Buchalter, Nemer where I embarked upon a fifteen year career in environmental coverage litigation. 

Before joining Les as an associate at Pepper, Hamilton & Scheetz in the mid-80's, I'd handled trade name and unfair competition cases.  With Les, I did more copyright and patent work than I had before or since, although I continued to keep my hand in the IP field.  In fact, the last case I tried before leaving practice was a copyright case involving the infringing repackaging of an old Kung-Fu movie. 

That's the long introduction to the announcement that I've joined forces with Les again, to develop a specialty IP ADR practice.  We've each been individually pursuing IP ADR, Les more in the capacity of arbitrator and me more in the capacity of mediator.  We occasionally co-mediate multi-party IP disputes together and have found how well we work with one another.  

I don't know an IP attorney half Les' age who is more on the cutting edge of the emerging technological, commercial and legal issues than he is. He's an amazing guy with a big firm background -- Graham & James; Squire, Sanders & Dempsey & most recently, the IP firm of Sheldon Mak.  It's exciting to be practicing together again -- as neutrals.    

Together, we've launched an intellectual property ADR practice and blog. The temporary blog site is http://www.ipadrservices.blogspot.com. Kevin O'Keefe at LexBlog is going to set up the permanent blog for us.

Important aside:  an hour with Kevin on the telephone about marketing your practice with a blog is worth the price of the blog and its yearly maintenance.  (But don't tell Kevin what a great deal he and his company are or he'll raise his prices and I'm not yet that successful).  

The IP practice allows me to do what I love the most, which is to drive a business deal, maximizing commercial strategies and synergies, as well as long-term business planning.   

Most of all, I enjoy debunking the prevailing wisdom that a good settlement is one that makes everyone unhappy.  When I entered the mediation field, one of my private goals was to give my clients an opportunity to negotiate settlements that made them at least as happy as the business deals they routinely broker.  Although it doesn't, couldn't, happen every time, it happens a lot more in the IP field than in any other.  

When the parties realize that I'm prepared, indeed, eager, to roll up my sleeves to help them craft the same kind of sophisticated commercial deal that made them technological and commercial successes in the first place, they immediately get alot happier.

That's why I'm moving my practice in the direction of an IP specialty and why Les and I have started the IP ADR Blog.  I hope you'll visit us there.  

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OK, so the part about Paris Hilton was pure tabloid (sorry, Paris, just kidding) but look! the mysterious metallic ball part is true!  Though like most headline-catching mysteries, not all that interesting after you get past the excited utterance.

Justice, however, should be neither hype nor mystery.

There are only two days left for you to take the Negotiation Justice survey here.

Litigators:  tell your mediators what protections and benefits you're looking for in a mediation.

Mediators:  ask your lawyer friends to take the survey.

And, oh yes, the people whose disputes we resolve.  Clients.  Yes, that's you.  The people who hire lawyers.  Tell us all what it is you're really looking for.  We promise we'll undertake a great effort to serve you better.

Preview from the Justice Survey     

If you had to choose, would you prefer to lose in a fair process or win in an unfair process?

Win even if the process was unfair 54%

Lose so long as the process was fair 46%

Agree?  Disagree?  Take the survey and let us know!

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The question whether mediation should be "fair" or "just" elicited the following thoughtful response from one of our attorney readers, who, as you can tell from the context, primarily represents plaintiffs seeking to recover commercial debts allegedly owed by individuals and small businesses. 

Distributive Fairness

"I only think a settlement is 'fair,' says our reader, "when it incorporates the mathematical calculation of prospective damages multiplied by a risk factor of litigation (i.e. 80% chance of winning $100K, means an $80K settlement is fair)."

A mediated resolution that is "fair" under this definition only results, he continues,

 when the other side "does the math" - most defense counsel just bluster and try to throw up "what if" roadblocks that derail a serious discussion about resolving the whole dispute. They don't do the math, and even if they did, there is enough disagreement over the "odds" that the process is far from transparent.

Distributive Injustice 

"Perhaps," says our correspondent,

we have a different interpretation of what "fairness" is.  I have plenty of situations where I sue on [a] debt [where,] by the time the . . . . [contractual] interest and attorneys' fees get worked in . . . , a $5,000 debt becomes $12,000 judgment and no [one] in the world thinks this is fair. But most eventually "settle" . . . not because they want to, or believe that the . . . settlement is "fair", but because the option of coming up with [the funds] to hire an attorney, and then eventually lose, is less attractive than trying to pay on a monthly basis.

In this case, is the settlement  fair?

From my client's perspective, it will get paid more than 100% of its initial principal due, and this type of settlement completely negates the possibility of zero recovery for the creditor if the debtor is judgment proof. .   .  

[Many defendants are]  willing to pay to get out of the case for "peace of mind" and pay
more than what they thought was fair.

Fair resolutions only work when everyone is willing to play fairly - and because everyone (especially litigation attorneys) feels that dispute resolution is a zero sum game, the little tactics we use in litigation skew the process so ADR really becomes a big poker game. And when people hide information, and outside factors to the dispute loom larger than the dispute itself, it becomes less about fairness and more about force. 

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The Litigation and Dispute Resolution Sections of the Los Angeles County Bar Association invite you to participate in the Second Day of WINNING IN NEGOTIATIONS.

(brief aside:  Do you want to score a victory for your client or simply resolve your dispute short of trial when mediating your case?  Let us hear your voice in our national  Negotiation and Mediation Justice Survey here -- 3 minutes max, promise)

Ad copy for the Negotiation Seminar below:

Want Inside Information Straight from Some of the Most Successful Professionals? Session 1 was great...Session 2 was awesome! Join us for the last session that will focus on your negotiation skills!!!

May 14th, 2007
6:30 pm -- 9:30 pm

In this cutting edge workshop, you will learn how to utilize effective and successful techniques and strategies to win in negotiations.

Please join the following attorneys and mediators for the last day of this interactive and highly engaging seminar entitled “Winning in Negotiation.” This panel will use film clips and interactive role playing to highlight new methods to achieve an understanding of negotiation principles and enhance your negotiation skills.

Panelists include:
 
Raymond P. Boucher, Kiesel Boucher & Larson Panelist
John A. Girardi, Girardi Keese & Crane Panelist
Stephen J. Henning, Wood, Smith, Henning & Berman, LLP
Jeffrey Kichaven, JAMS Moderator
Lisa Klerman, Mediation Office
Gig Kyriacou, Mediation Offices of Gig Kyriacou
Alexander S. Polsky, JAMS Moderator
Martin D. Singer, Lavely & Singer , Panelist
Amy Solomon,  Girardi Keese & Crane Panelist

Join us for insider tips from the best in the field: experienced negotiators and mediators, judges and other experts who will share their expertise with you.

Topics include:

• Distributive bargaining

• Development of target and resistance points

• Tactics in distributive negotiation

• Breaking Impasse

• Developing listening skills as a negotiator

• Why negotiations fail

• Negotiation role plays and discussion

... and so much more...

For more information please call Gemma at 213-896-6441; to register, CLICK HERE or call 213-896-6560.

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Among the benefits of the "meme tag" game is cross-disciplinary learning.  See Switch! - Cross-Disciplinary Learning at the Eide Neurolearning Blog, the one degree of separation between us and the Thinking Blogger Award. 

And check out the Creative Generalist while you're at it.

First, the excerpt from Eide Neurolearning:

The best way to have fun in science is to do something you are not trained for. - Seymour Benzer

Any student of creativity or innovation knows that changing disciplines seems to be a way of keeping 'fresh' and getting new ideas. Louis Pasteur got his start in crystallography, but then started solving problems in fermentation when a student of his brought him a factory problem. When a devastation of silkworms happened in Europe, they called Pasteur who exclaimed, "But I know nothing of silkworms." Nevertheless, he ended up solving the problem of silkworms by crossing over into the fields of microbiology and immunology.

In Root-Berstein's study of innovators, he found '[i]n every case that I have been able to examine, researchers who continued to be productive past middle age changed fields regularly. In effect they periodically returned to the state of a novice by taking up a new subject. They broke out of the patterns of work and thought to which they had become accustomed.'

For the remainder of the Eide's post, scroll down to Switch! here.

A Brief Comment on the Era of Legal Specialization

Attorneys entered the realm of specialization about twenty years ago.  Because novel legal problems are generally resolved for entire industries in fifteen or twenty years (i.e., how a Comprehensive General Liability Policy should be interpreted in response to a claim against an oil company for production-related environmental contamination) attorney-specialists are forced to change specialties at least once, if not two or three times during their working lives.

At one of the intersections between the end of one specialty (environmental insurance coverage) and my search for another, I began defending consumer class actions.  Although I'd once prosecuted a  commercial class action against a Japanese car manufacturer, that one case was the only experience I had in litigating class actions.      

In addition to not knowing what I should do in negotiating a settlement of my client's "fair share" of potential liability I also had no idea what I shouldn't do.  As a result, the settlement I negotiated was better than any achieved by the dozens of other similar companies who were my co-defendants.  

One afternoon, I received a call from senior counsel to the defendant who'd had the greatest potential liability exposure and who likely paid the most to settle the case. 

"How in the world did you get them to agree to an injunction-only settlement?" she asked.  "I've never seen anybody do that before."

"Thanks," I said.  "I guess I managed to do it because I didn't know that I couldn't."  

What Does Being a Generalist Have to Do with Negotiation and Mediation?

As I recently said in a moment of naked self-promotion, it's good to have a mediator who is "inside the other guy's decision cycle," i.e., someone familiar with the industry and the legal specialty involved.     

"The day of the generalist mediator is over," I'm told, just as I was told the "day of the legal generalist is over" sometime in the late '80s. 

But here's the exception to the rule.  Negotiator or mediator, the parties will teach you the critical facts and the lawyers will hip you to the law necessary to resolve the dispute even if you don't know bupkus about either.   

Often, the more you know, the less likely you will be open to innovative solutions to intractable problems.

I suppose the best of both worlds would be to practice (and negotiate) in your specialty while at the same time maintaining what Buddhists call a "beginner's mind." 

"In the beginner's mind there are many possibilities, but in the expert's there are few." - Shunryo Suzuki-Roshi from the Beginners Mind Blog.

No matter how much you know or think you know, set aside your pre-conceptions and pre-judgments as much as you are able.  Avoid "we've always done it this way" thinking.  Then, whether you're in a new field or an old one, you will surprise yourself and your bargaining partner with the high degree of creativity you are able to bring to the same old problems.

Did I also say it's lots more fun to do something new everyday?  And that conflict resolution -- whether you're judge or jury, advocate or negotiator, mediator or arbitrator -- is waaayyyyyyyyyyyyyy too hard unless you're having fun doing it.

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Step four in The Art of Getting the Best Deal:  Solve the Joint Problem

(left:  my first 2-wheeler on which my grandfather, the sign-painter, inscribed my name)

Exploring Different but Compatible Interests

Lax and Sebenius suggest that many negotiators "simply assume their interests to be the opposite of yours -- rather than different and potentially compatible."

You cannot, however, simply instruct the parties to search for different but compatible interests.  The mediator needs to listen long and carefully for the needs and concerns that are driving the parties' legal positions.

But First, a Little Reactive Devaluation*

You'll recall that the parties to my hypothetical patent infringement action had already made lists of extremely valuable non-economic benefits that they might exchange with one another to resolve the dispute.  They soon pushed those bargaining chips aside, however, quickly reverting to purely monetary issues.  

Why do litigants abandon business opportunities more valuable than their total monetary demand?   "Reactive devaluation." ** 

Money seems objective and certain while the value of intangibles is imprecise and risky. 

Non-quantifiable benefits are greeted with the suspicion one reserves for the street vendor hawking Louis Vuitton handbags.  This apprehension is probably expressed by litigators more often than any other professionals -- "if he wants it, it can't possibly be good for me."  

____________________

**  I learned everything I know about the social psychology of conflict from University of Missouri Law School Professor Richard Reuben.  This is one of his best and most comprehensive Power Point Presentations.  Take a look when you have a moment.  Learning social psychology is is like hitting the "reveal codes" key in WordPerfect or seeing the matrix:  your entire conflict-life is mapped, graphed and revealed.  Thanks again Richard! 

Continue Reading...

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As promised, we bring you Step Three from the Lax and Sebenius article, the "Art of Getting the Best Deal. 

Bringing the Deciders and Assessing Party Interests (a Brief Review)

Yesterday we stressed the importance of identifying the "deciders" and those who might get in the way of the deciders' decision (the known unknowns and the unknown unknowns).  

Today, we apply those principles, along with the third Batna step, to a hypothetical patent infringement mediation.  

Because litigators are trained to organize party interests around legal theories and business people to organize their own thinking around commercial interests, your mediator should be facile with both.  At some point, the mediator should assist the parties and their counsel in shifting their attention from litigation "interests" (costs, merits) to business and marketing interests.

Why?

Because there are thousands of ways to make a deal and only a handful of legal remedies to resolve a dispute.       

MARKETING MOMENT:  Hiring a mediator 

fluent in the language of party interests and knowledgeable about the industry in which the parties are working will greatly assist everyone in crafting a business solution to a legal problem. 

Continue Reading...

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(for more of the brilliant Charles Fincher, Jr., see LawComix.com)

When I hear from my old litigation buddies that "all mediators do is divide by two" I am tempted to wander into the "hard sell" marketing zone I usually avoid.  Last night at the Los Angeles ABTL dinner, for instance, I runined my record of never overtly marketing my services by nakedly promoting myself in response to one such complaint.

For those litigators disappointed by the mediation services they receive, I'm supplying an executive summary (with commentary) of Harvard negotiation gurus Lax and Sebenius excellent article, "The Art of Getting the Best Deal."  

Don't Say "Yes, Yes, Yes," When You Really Mean "No, No, No, No, No."

As Lax and Sebenius stress, business people should only say "yes" to a deal that "meets [their] real interests better than [their] best no-deal option."  Mediators call the "no-deal" option your BATNA -- a Better Alternative to a Negotiated Agreement.

Let me reiterate:  there is no reason to say "yes" to any deal that is worse than no deal.  Ever.  Period.

Tell that to the mediator the next time you're feeling pressured to accept an offer or meet a demand that makes your client really really really unhappy.  Say, "I can do better at trial."  Say, "I can negotiate a better deal than that."  Say, "if I can't negotiate a better deal that that today, I'll approach the matter differently tomorrow."  Say, "I don't believe the best settlement is one that leaves everyone unhappy."  Say, "that's not what I promise my clients when they hire me."  Say, "I've read Lax and Sebenius."  Say, "good luck with your mediation career" and pack your bag.  Bow out nicely but firmly. 

Find the Deciders and Draw a Deal Diagram

A deal diagram is not a decision tree.  Decision trees are about legal strategy.  Business decisions are not driven by legal strategy.  Business decisions are driven by finance, markets, business needs, and, commercial realities.  Only lawyers are kept awake at night by legal dilemmas.  CEO's are concerned with mergers and acquisitions, S.E.C. reporting requirements and how a settlement with a competitor might affect stock prices.

So what's a "deal diagram"?  I'll let Lax and Sebenius explain:

Continue Reading...

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Our friend Michael Webster at the Misleading Advertising Law Blog once reported on a securities scam that bilked almost $600,000 from elderly victims who were lured by a "free investment seminar, complete with lunch."

What is it about a free lunch, our correspondent asks, that would convince individuals to turn over their life savings to [a con man]? The answer, once again, can be found in the social psychological archives, particularly those described by Robert Cialdini.

Cialdini, says Michael, describes the influence tool here as "the rule for reciprocation."

The rule says that we should try to repay, in kind, what another person has provided us. If a woman does us a favour, we should do her one in return; if a man sends us a birthday present, we should remember his birthday with a gift of our own.

Although the reciprocation rule does not appear to require us to turn over our hard earned money to a criminal just because he has bought us lunch, some scientific experiments have shown that the rule can be used to obtain significant economic benefits. The old Amway trick of delivering a "free sample" of merchandise for a 24 trial period ensnared many a consumer who would not have purchased from Amway otherwise.

Why can the rule extract seemingly excessive favours? Cialdini identifies two reasons: (a) most of us find it highly disagreeable to be in a state of obligation, and will quickly try to remove ourselves from its grasp, and (b) to violate the rule is to be a moocher or a welsher. In order to avoid being labeled as such, we might agree to an unequal exchange of favours.

Continue Reading...

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The original "Getting to Yes" guy -- William Ury -- talks about the power of a "positive no" in connection with his new book Getting Past "No" -- Negotiating in Difficult Situations.

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 (the incomparable Charles Fincher at LawComix.com)

I tell people to hell with charity, the only thing you'll get is what you're strong enough to get.   -- Saul Alinsky, labor and social activist 

This step by step guide is pretty much taken verbatim from MIT's Negotiation Basic's Web Page.  I do not differentiate between "distributive" and "integrative" techniques as does the MIT site; I have added links to key terms; and, I have added warnings flowing from my own negotiating history and mediation practice.   

Italicized text is my own.

A more lengthy and sophisticated guide, The Art of Getting the Best Deal by Harvard gurus Lax and Sebenuis can be accessed here.  Order their "must read" 3-D Negotiation NOW.

Step One

Figure out your own interests and reservation point (bottom line) by assessing your Best (and Worst) Alternatives to a Negotiated Agreement (BATNA and WATNA). 

Keep reviewing these points while you negotiate.

Step Two

Figure out the interests and reservation point of the Other, remembering that a negotiator's belief about the other side's bottom line is a powerful driver of settlement, i.e., do not be fooled into believing you have hit the other party's bottom line until (and sometimes after) they begin packing up their briefcases to leave the negotiation.  

Be alert to new data while you negotiate, remembering that the attorneys representing the parties have organized the facts around their legal positions while the parties have organized the facts around their business needs. 

Business needs will always drive settlement more than legal positions will.  You may be hearing them for the first time.  If you are negotiating with the mediator, make sure the mediator is making the effort to ascertain the parties' interests and is not stuck on the parties' legal positions.  

Step Three :  Ascertaining the Zone of Possible Agreement

Seek to move the reservation point of the Other to widen the bargaining range especially if there is a negative range. (This process is often begun by "sowing doubt")  

However, if necessary for a settlement that you must achieve, move your own reservation point. 

Do, however, beware of thinking you "must achieve" a settlement above or below your "bottom line" whenever you are hungry, angry, lonely (i.e., feeling isolated) or tired (H.A.L.T.) 

Sticking to your bottom line is the best means of insuring you do not leave the negotiation believing you have put too much money or left too much money on the table. 

Sometimes you're better off not getting to "yes."  

Through judiciously shared information and brainstorming, seek to expand the pie so that each side may get as much as possible of what it would like.

Explore moving the reservation points of each side.

Step Four

Seek a settlement as close as possible to the reservation point of the Other so that you win the maximum profit.

Decide on fair principles and objective criteria to determine how to divide the pie.

Step Five

Do what you can to see that both you and the Other come to see this settlement as the best possible one under the circumstances. 

MIXED MOTIVE BARGAINING

In almost all negotiating situations you will have "mixed motives," where you wish to create values with your Other, and then to claim your share. In these situations you may use tactics common to both distributive and integrative strategies, or switch at least a little from one strategy to the other.

For example one would show respect at all times and be cautiously forthcoming about one's interests, share information as trust grows, be truthful and consistent, seek common ground and agreement on principle, generate as many options as possible, and in general pursue the integrative path as long as possible, while explicitly safeguarding you own interests. In many situations you will be able to expand the pie before having to divide it.

These ideas are drawn from the experience of the author and from Walton and McKersie, A Behavioral Theory of Labor Negotiations, McGraw-Hill, 1965. They also owe much to the work of Roger Fisher and William Ury.

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Everyone who knows the difference between distributive and integrative bargaining and the iconic story of the ONE ORANGE should go directly this morning to Geoff's blog, Mediator Blah Blah.  First, a snippet to encourage you:   

Today I found myself inducted into the Mediators' Mile High Club at 23,000ft when two young, remarkably similar looking girls seated in 16E and 16F needed my help.

(yes, they look sweet and compliant now, but just wait until the plane takes off!)

for remainder of story click here.

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Research shows that how we perceive a particular offer's value is highly influenced by any relevant number that enters the negotiation environment -- an anchor.

The greater the ambiguity and uncertainty, the stronger the anchoring effect of the first offer, which will exert a strong pull throughout the rest of the negotiation.

researchers had real estate agents inspect a house and estimate its appraisal value and its purchase price 

• then they manipulated the house's list price, providing high and low anchors

• all of the agents' estimates were influenced by the list price, even though they denied factoring the list price into their decisions

• when they explained the basis for their estimates, they cited features of the property that would justify those estimates

in another study, researchers sent customers to mechanics to obtain estimates on the value of a car

• after the customer offered his own opinion of the car's value, he asked the mechanic for an estimate
• half the mechanics were given a low anchor and half were given a high anchor
• the mechanics estimated the car to be worth a thousand dollars more when they were given the high-anchor value

a Northwestern busienss law school professor explained the phenomenon this way

• items being negotiated have both positive and negative qualities—qualities that suggest a higher price and qualities that suggest a lower price
• high anchors selectively direct our attention toward an item's positive attributes; low anchors direct our attention to its flaws
• a high list price directed real estate agents' attention to the house's positive features (such as spacious rooms or a new roof) while pushing negative features (such as a small yard or an old furnace) to the back recesses of their minds
• similarly, a low anchor led mechanics to focus on a car's worn belts and ailing clutch rather than its low mileage and pristine interior 

making the first offer anchors the negotiation in favor of the offeror

• the author of the article from which these insights were gleaned found that when a seller makes the first offer, the final settlement price tends to be higher than when the buyer makes the first offer 
• the amount of the first offer affects the outcome, with more aggressive or extreme first offers leading to a better outcome for the person who made the offer
• Initial offers predict final settlement prices better than subsequent concessionary behaviors do

how extreme should your first offer be?

• this author's research suggests that first offers should be quite aggressive but not absurdly so 
• the fear that an aggressive first offer will scare or annoy the other side and perhaps even cause him to walk away in disgust is typically exaggerated
• most negotiators make first offers that are not aggressive enough
• a nonaggressive first offer requires small concessions or a decision to stand by the original demand
• one of the best predictors of negotiator satisfaction with an outcome is the number and size of the concessions extracted from an opponent
• by making an aggressive first offer your opponent is able to "extract" concessions from you
• in that case, you'll not only get a better outcome, but you'll also increase the other side's satisfaction

from "Should You Make the First Offer?"  by Adam D. Galinsky, an assistant professor at Northwestern University's Kellogg Graduate School of Management, in Evanston, Illinois.

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Ron Miller over at the Trial Lawyer Resource Center posted a good article on negotiating settlements with insurance adjusters recently called Listening During Settlement Negotiations

Miller's helpful tips include nuggets such as:

 

The Adjuster Is Not Your High School Girlfriend: If negotiations end badly, agree to disagree and file suit. Do not get mad at the claims adjuster. You can remind the adjuster that you have facts about the case (the quality of the client or whatever the facts may be) that reviewing the medical records could not possibly give the adjuster. If this is the problem, it is obviously not the adjuster's fault that the medical records don't fully give a lens to the value of the case. Discovery can resolve this and, if it does not, this is why we have juries. Don't take it personally.

Check it out. 

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(above, Charles Fincher's illustrative cartoon)  

I was talking to an attorney friend this morning about an upcoming mediation in a complex commercial case.  Lots and lots of $$$$$ at issue.  Last week -- a week before the mediation is set to convene --  his team scored a pre-trial victory on an eight figure issue.

If I'd had time to think about it, I'd have given him the mediation strategy advice he was already suggesting to himself.

DON'T GLOAT.

Aside from your mother's advice to never be a "bad winner" and your own certain knowledge that your shiny new pre-trial ruling can always be reversed, stifling your gloat-reflex will have at least two beneficial effects on your upcoming negotiation.  

1. your opponents' reflexive desire to retaliate by launching an all-out thermo-nuclear-legal attack will be quieted, if not eliminated; and,  
2. your opponents' ability to use their higher "executive" brain functions during the upcoming negotiations will be increased, soothing the fear and anger flight-fight mechanism of the  brain's reptilian amygdala, which, when triggered, overrides the sophisticated "executive" brain functions necessary to a successful high-stakes negotiation.

So, my friend had it right on the money this morning.  The hardest thing about the upcoming negotiation will be not to gloat.  

Make "not gloating" the center of your strategy, I replied, and you'll settle that multi-bazillion dollar case and make your corporate client truly happy.

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(left:  old tech)

As if the DMCA weren't already the Full Employment for BigLaw Act of 2007, we have a new DMCA cause of action -- improper take down notices.

Read today's Wall Street Journal Law Blog report on the new suit against Viacom, the latest in the YouTube wars.  This one was filed by "fair use" activist groups claiming that Viacom's demands to YouTube that it remove parodies of Viacom/Comedy Central programming themselves violate the DMCA.  

I will continue to be a broken record (a broken download?) on litigation about online content.

There are an infinite number of business solutions to the business problems (opportunities) created by Web 2.0.  As always, there are only a few, and frustratingly chimeral, legal solutions.  

I'll urge anyone within shouting distance of BigMedia to read 3D Negotiation by Lax and Sebenius, whose "brainest guys in the universe" credentials go like this:

David Lax and James Sebenius . . . combine decades of high-level, practical experience negotiating in the corporate, financial, and diplomatic realms with academic expertise that helped develop much of the modern field of negotiation.

Professor Sebenius is the first Gordon Donaldson Professor at Harvard Business School and a member of the Executive Committee that oversees the activities of the Program on Negotiation at Harvard Law School. David Lax, described by Forbes magazine as a "new negotiation theorist" on the cutting edge of his field, served as a professor at Harvard Business School from 1981-1989.

Lax and Sebenius co-founded the Negotiation Roundtable, a working research group sponsored by Harvard Business School and the Kennedy School of Government, and Sebenius currently serves as its Director.

This isn't "win win" negotiation strategy.  This is the way to outwit the entire legal system and most of your commercial competitors.  Why?  Because a business deal creates its own legal world -- the new one that precedent couldn't possibly have predicted.

But there's no reason to rely on me.  Check out 3-D & draw your own conclusions.   

                   

 

                                (right:  new tech)

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This January Seth Godin's [Marketing] Blog made a succint distinction between marketing strategy and tactics that is as applicable to negotiation as it is to business development.  "The right strategy makes any tactic work better," said Godin.

The right strategy puts less pressure on executing your tactics perfectly.

Here's the obligatory January skiing analogy: Carving your turns better is a tactic. Choosing the right ski area in the first place is a strategy. Everyone skis better in Utah, it turns out.

If you are tired of hammering your head against the wall, if it feels like you never are good enough, or that you're working way too hard, it doesn't mean you're a loser. It means you've got the wrong strategy.

It takes real guts to abandon a strategy, especially if you've gotten super good at the tactics. That's precisely the reason that switching strategies is often such a good idea. Because your competition is afraid to.

Thanks Seth!  Great advice!

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Baz Luhrmann's hallucinatory Romeo and Juliet, the ultimate Shakesperean lesson in the dangers of fiercely playing Tit for Tat.   

The Americans are fond of explaining almost all the actions of their lives by the principle of self-interest rightly understood. In this respect I think they frequently fail to do themselves justice. -- Alexis de Tocqueville

We've mentioned these principles before:

• negotiators will reflexively play the childhood game of tit for tat (you cooperate, I cooperate; you defect, I punish; you cooperate, I cooperate again) because, as the game theorists tell us, we evolved as a human society as a result;
• negotiators are also inequality averse, just like the capuchin monkeys who act against their own apparent self-interest by refusing to work when one of their fellows begins making five times the salary for the same amount of work.  

Herbert Gintis, an Emeritus Professor of Economics at the University of Massachusetts, discusses these issues in Game Theory and Human Behavior.  

The point of the following excerpts from Professor Gintis' research is this -- what negotiators tend to call irrational bargaining behavior  -- not accepting an objectively  "good deal" -- is not necessarily irrational or "overly emotional."  It is simply driven by considerations that hard numbers do not explain.

Gintis explains: 

The inequality-averse individual is willing to reduce his own payoff to increase the degree of equality in the group (whence widespread support for charity and social welfare programs). But he is especially displeased when placed on the losing side of an unequal relationship.

Continue Reading...

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Business Mediation Guru Robert A. Steinberg took on the vexing question most often posed to mediators in a dynamite Daily Journal article just last month -- How and When to Broach Settlement. 

If you're not on Bob's mailing list, you should be.  Here's a taste of the DJ Article that will pump you up.  Follow Bob's sound advice and you'll approach settlement without ever again worrying that the beach bully might kick sand in your face.

For all its rational veneer, negotiation is at base animal behavior. We fear to raise settlement because we think that “blinking first” is an admission of weakness and will cost us some measure of settlement value.

Parties often talk settlement at the beginning of the case, before they have spent much money, or after the completion of discovery, when they have developed the information they feel they need for trial. But you should consider raising settlement at other times: before a risk-magnifying event (such as a major motion or a heavy financial commitment) or whenever the settlement value of your case is most favorable.

For the remainder of Bob's article, click here.

 

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I'm always a little surprised that parties to a pre-trial settlement conference or mediation have any expectation that they might be able to resolve a dispute of years standing in half a day, or even a single day.  That they often do settle their differences in so short a time is pretty amazing when you consider the time and effort (and resulting polarization) that have gone into the litigation of that dispute. 

Mediators and settlement judges often feel as if they're fighting the clock because the parties are impatient with the process and primed to storm out of the room if they feel the other side is not negotiating in "good faith." 

Attorneys often cynically say that all we mediators do is "keep the parties in the room."  I'm certain I won't be the first to acknowledge that this task is not only one of our main objectives, sometimes it's the toughest work we will do that day, making creative problem solving; "expanding the distributive bargaining pie," reality testing and re-framing the parties' options seem like child's play.

From the mediator's seat, I have one modest request for counsel and their clients -- have a little patience with the process.

More often than not, the business people need time to digest new insights, reassess their positions and perhaps even check their books and records again before making a sound business decision. None of us do the rest of us a favor by demanding that people make hard decisions under the pressure of time.

Remember that readiness to make a business decision is as emotional as any other major life decision. I have seen some business people take a day or two to mourn their losses before they are ready to accept them.

I have also seen actual tears well up in the eyes of the most hardened businessmen when they realize that trial will not save them -- that a "just outcome" (i.e."I will prevail at trial and recover all of my losses") is as unlikely as winning the lottery.  This is the false promise of litigation.  It keeps alive the parties' hope that they will be completely vindicated and their adversaries punished at trial.  

Although all competitive business people, trial lawyers and commercial litigators have their Conan the Barbarian moments, the "pleasure" of victory -- as voiced here by California Governor Schwarzenegger -- remains a greater fantasy than the one about a body-builder from Austria ascending to high political office in the United States. 

Anything's possible.  But consider the likelihoods.  

And now, Arnold!! 

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This comment on my last post about Google's Moon Shot (from Search, Marketing and Musings) is more interesting than the post itself, so I include it in full here.  The lessons here are so numerous and the paradigm shift so profound, that every commercial litigator, transactional lawyer and business person should be closely attending to the way Google is re-writing not only the internet, but intellectual property and the practical application of the law (and litigation) as tools to achieve commercial ends.  

Have I quoted google on litigation before?  I will again.  Litigation is simply a business negotiation being conducted in the courts. 

Alan Rimm-Kaufman - February 12, 2007 08:39 AM Thanks for the link! Whereas much of Google's dominance is based on habit (eg one could envision an upstart capturing hearts and keyboards away from G by better technology or marketing, similar to what G did to Y and AV over the last 8 years), some parts of Google's power rests on more permanent legal & technical structures -- fiber & bandwidth contracts, patents, IP settlements, etc. That's why I think the G books possible settlement described in the New Yorker piece could be really important -- we might look back on this in a few years and note the settlement (if and when it occurs) was a real fundamental lock-in 'brick' in the Google foundation... Cheers!

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Check out Search Marketing and Musings' post on the GoogleBooks Settlement-as-Barrier-to-Entry-Angle and other thoughtful reflections on the excellent recent New Yorker article on "Google's Moon Shot," i.e., google's project to create a database of all books ever printed that are still in existence.

The paradigms they are a'changin' . . .

It's not your father's copyright law anymore . . . .

To get some sense of the upcoming legal battle and commercial strategizing, see the Online Wall Street Journal article in late '05 on Harper Collins' plans to digitize its own books here and Stanford Professor Larry Lessig's deeper legal thoughts here.

We love google.  We can't help ourselves.  We're temporarily trusting that it will "do no evil" just because we can't wait to see what they do next.

We have no idea what in the world is depicted in the image accompanying this post.  We just liked the way it looked with Google's Moon Shot.

 

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Anyone who uses the word "cerebrate" twice in a single post makes me think he's doin' an awful lot of thinking.  And, it turns out that the thinking is pretty darn good. 

Looking for some sound advice on when and how to approach settlement?  Take a look at the Virginia Injury Lawyer Blog here.

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Sometimes we mediators get caught in a conversation with ourselves and, in the process, get farther and farther away from what the attorneys who seek our assistance need from us.

Diane Levin has a series of articles on this topic, Bridging the Divide Between Lawyers and Mediators, which is a must read for all of us.  

I'm linking to her series here, as well as to some of the trial attorney and other blogs that think deeply and well about the mediation process and have much to teach us mediators.

Time prevents the full list this morning but I'll supplement this post this afternoon.

What triggered this thinking was Tampa Bay personal injury attorney Bob Carroll's excellent blog at injuryboard.com, The Litigation Process.

Diana Skaggs' Louisville Divorce Law Journal pays more attention to alternate dispute resolution than any practicing attorney blog I'm aware of.  Her insights are spot-on, her knowledge broad and her wisdom, well, wise.  Check it out!

Do not pass go!  Click the link here to the truly brilliant, multi-authored  Trial Lawyer Resource Center Trial Tips from Trial Lawyers Blog.  The blog's self-description is a vast understatement -- something we don't generally expect from trial lawyers:

Trial Tips from Trial Lawyers You've found the blog where a number of the USA's top trial attorneys join together with litigation experts to lend their expertise on topics that matter in your trial practice. Gain insight in case selection, work up, trial strategy, evidence, and post settlement issues. Contributors will reqularly share their real life experiences and knowledge to help you represent injured consumers.  

And it's not just the settlement/mediation tips that will grab your attention.  Trial lawyers put the passion, wit, loss, longing, love and fury back into the dry legalisms of their clients' claims.  Because that's what we mediators do as well, you'll find cruising the Trial Lawyer Resource Center an endless source of inspiration.

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Even the Evangelical-Pie-Expanding-Negotiation-Collective (which awards this week's Exploding Pie Trophy to Diane Levin's Brilliant Post on the Inefficiencies of Trickery, Force and Persuasion) occasionally needs to resort to deception, influence and naked power plays.

So it is that we turn to Robert B. Cialdini's Six Rules of Influence that Could Make or Break Your Next Commercial Negotiation. 

Rule of Reciprocity

The rule of reciprocity is descriptive rather than prescriptive. When one person freely gives another something of value -- time, information, goods, or, in negotiations, concessions -- the receiving party inevitably feels an obligation to reciprocate.

Studies show, for instance, that the peppermint candy your waiter leaves with the check for dinner, dramatically increases the tip you give him. The same principle is used by charitable institutions whenever they send you return address labels bearing logos for -- pick one -- Amnesty International; the Red Cross; Habitat for Humanity, the Union Rescue Mission, and the like.

If unaware of this principle, the recipient of unasked for "favors" can be induced to enter into drastically unequal exchanges. To rid ourselves of the discomfort arising from an unpaid debt, for instance, we often agree to a request for a substantially larger favor than the one bestowed upon us.

Included within this rule is the "rejection-then-retreat technique," which relies heavily on the pressure to reciprocate concessions. By starting with an extreme demand that is certain to be rejected, the negotiator can profitably retreat to a smaller request--one that was desired in the first instance.

No matter how outrageous the opening offer, the second request is far more likely to be accepted because it appears to be and is a tempting concession (so long as the opening "outrageous" offer doesn't cause the termination of the negotiations at the outset).

Continue Reading...

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The Cost of a Thing is the Amount of Life Which is Required to Be

Exchanged for It, Now or in the Long Run [1] -- Part One  

I.          INTRODUCTION

When a decision-maker says, “it’s only about money,” he means that the choice to be made is purely rational and that strong emotions – feelings – will play no role in the analytic process to follow. When lawyers say a case is “only about money,” they are not only saying that emotional factors will not influence their decisions. They are often also saying that Plaintiffs’ expressions of injustice are insincere – otherwise they would not accept money in exchange for losses that cannot be reduced to monetary value such as the loss of life or emotional suffering. 

Whenever any of us attempt to arrive at a monetary value for anything we buy, barter or exchange, we, like the lawyers and decision-makers above, are engaged in the process of commensuration in which qualities are transformed into quantities. In the case of a legal conflict, commensuration takes place not only in reducing physical and emotional loss into monetary values, but also by contracting the conflict itself into certain rigid categories of redressable wrongs we call “causes of action.” In both cases, the texture, context and idiosyncratic particularities of a conflict are reduced to a common metric of an actionable claim compensable in monetary damages. [2] 

While the process of commensuration allows us to more easily grasp, represent and compare differences in an effort to “manage uncertainty, impose control, and secure legitimacy,” [3] we often thereby give up our recourse to “[e]veryday experience, practical reasoning, and empathic identification, [all of which] become increasingly irrelevant bases for judgment. [4]   In simplifying matters for ease of analysis, we inevitably strip away context, ignore differences, and reduce the “relevant” facts to categories that reproduce past experience for the purpose of equating the thing to be valued with a supposedly objective metric. [5]  

Setting the personal relational and historical account of the conflict aside, lawyers seek from their clients only those facts that will satisfy the “elements” of causes of action for negligence or other breaches of society’s civil legal standards, after which a judge or jury will be asked to value the loss suffered in the form of monetary damages . 

Continue Reading...

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Recognize this?  

No, not the money shirt.

The single issue monetized shuttle no intake lawyer controlled mediation.

A  friend and LL.M. candidate at the Straus Institute, Monique McKay passes along law professor John Wade's term for a negotiation process most lawyers all know too well.  

Anyone interested can find an excellent article by Professor Wade discussing the SIMSNILCM process and its alternatives  here . 

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Hat tip to our favorite Neuroscience-for- Dummies blog -- Neuromarketing -- for directing us to Time Magazine's recent article on the intersection of marketing and neuroscience.  

(N.B.  There's a permanent link to Neuromarketing in our own left-hand column if you'd like to follow these developments yourself).

Time's article Marketing to Your Mind, tells us about P. Reed Montague's work on the way trust, altruism and feelings of obligation  can divert and modify the steps we ordinarily take to make decisions.  

Of the speed with which neuroscientists are increasing our knowledge of how and why we think the way we do, Montague is quoted as saying,  

The capacity to use brain responses and relate them to behavior has accelerated at a breathtaking pace over the past four years and yielded an incredible amount of information.

That's exciting news for the Negotiation Law Blog because "being inside the other guy's decision cycle" (Colin Powell) is the best way to maximize your negotiating advantage.  

As the simplistic chart above confirms, most of us already know what questions to ask about our negotiating partner before and during any bargaining session.  To whom does he report; what is his personal stake in the outcome; why does he (or his organization) need the advantages he's angling to obtain; what damage to his personal/professional interests or his organization's well-being would be done by walking away from the bargaining table; under what time and other pressures are he and his business operating, who are the true "stakeholders," both internal and external, and the like.  

(Remember -- google everyone and search every public source of information on your bargaining partner and her organization before any negotiations begin).  

Adding to these largely business considerations, an understanding the way all people tend to make decisions could well be the difference between negotiation success and failure.  That's why your Negotiation Blog follows developments in neuroscience and evolutionary biology so closely.  So you won't have to.

Look for our next post on the way  Dr. Montague's insights can assist you in closing your next deal.   

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Hooray for the publication of a new volume on the social psychology of negotiation edited by Professor Leigh L. Thompson, Negotiation Theory and Research. 

I learned more about negotiation from Leigh L. Thompson's Mind and Heart of the Negotiator than from any book I've read, seminar I've taken, or advice I've been given.  And I've read, taken and been advised a lot since I began my LL.M studies in conflict resolution at Straus in 2004.

So despite the steep price-tage on Negotiation Theory and Research, edited by Dr. Thompson, I'm buying my copy today.  You can await my recommendation or skim Dr. Thompson's on-line work and purchase your volume before any of your negotiating partners do.

Dr. Thompson is one of those frighteningly accomplished people who make you feel as if you must be sitting around watching soap operas all day.  She's currently the J. Jay Gerber Distinguished Professor of Dispute Resolution & Organizations in Northwestern's Kellogg School of Management; has received the multi-year Presidential Young Investigator award from the National Science Foundation; gathered up several National Science Foundation grants; and has served a term as Fellow at the Center for Advanced Study in the Behavioral Sciences in Stanford, California.

At Kellogg, Dr. Thompson directs the Kellogg Team and Group Research Center, the Leading High Impact Teams Executive Program at Kellogg, and the Behavioral Laboratory at Kellogg.

I'm already completely worn out before I'm told that she has published over 90 research articles, books, and chapters, including The Mind and Heart of the Negotiator (3rd edition), Shared Cognition in Organizations (with John Levine and David Messick), Making the Team (2nd edition), The Social Psychology of Organizational Behavior: Key Readings, and Creativity in Organizations.

She is a member of the editorial boards of Organizational Behavior and Human Decision Processes, Journal of Personality and Social Psychology, Journal of Experimental Social Psychology, Journal of Behavioral Decision Making, and International Journal of Conflict Management. 

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That's the Fuller Brush Man and if you're old enough to recognize him, it's time to quit practice and go on the bench or start mediating (or, if you've been very very very good, retire) 

My dad was a milkman before he began selling life insurance door-to-door in the late fifties and early sixties.  If he didn't make a sale, he didn't get paid.  Door-to-door.  Taking home a draw against future commissions. 

That takes, well, as Alec Baldwin says in David Mamet's Glengarry Glen Ross -- brass balls.

So I market.  Selling is for people who are made of tougher stuff than I am.

This, however, IS AN ADVERTISEMENT for my Negotiation Seminar. 

Dad would say "that's not selling" since I give this seminar away for free with MCLE credits.      

He asks me why I do this with the same perplexed look on his face that my mother has when I tell her one of my poems was published.  "That's nice," she says, before asking again, "who reads poetry, honey?" and I repeat, "just other poets mom, just other poets."

But I digress.  

I give this seminar away for free because it gets me work. 

Most lawyers need to experience what I can do for them before they'll hire me.  Without this seminar, the pro bono work I do, and a growing circle of people who recommend me to their colleagues, I'm just another retired lawyer who took up mediation (as a hobby some wonder) after a couple of decades of practice.  (and no, it's not a hobby).  

There are some decent kudos on the linked page about just how great the seminar is, but you really have to experience it yourself. 

Did I mention that it's free? 

And if you really really want, there are a couple of sitting judges who like talking to the people whose cases they sit in judgment on day after day.  Two of these seminars were made to go with Judges.  Because I know how much you like it when they come along.

Doesn't that sound like a good deal for the new year?

If I could, I'd bring along some of these Fuller Brush letter openers & everyone over 50 could get all nostalgic but all I have are a bunch of Dad's old Prudential "salesman of the month" lapel pins and I wouldn't part with them for anything in the world!   

 

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From Screenwerk blog  --  Google CEO Eric Schmidt said that at least some of the litigation Google had confronted was “a business negotiation being conducted in the courts."

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Most attorneys do not like to begin their mediated negotiations with a joint session and neither do many mediators.  The reason most often given is everyone's desire to avoid a polarizing set of zealously adversarial presentations.  

Work done by our neighborhood neuroscientists, however, suggests that avoiding joint sessions may deprive us of the  "small talk" necessary to put the parties into a collaborative, even generous mood.  

First the Neuroscience  (from my favorite source for such insights, the Neuromarketing Blog) 

Recent research confirms that the miserly not only spend more time thinking about money than their more generous peers, they are also more socially withdrawn.  Although Dickens nailed the personality type on the head  when he created the friendless and miserly Scrooge, it seems that all of us are anti-social and penny-pinching when focusing primarily upon money. 

The confirming research?  Recruiting the usual cadre of beleaguered undergraduates, scientists at the University of Minnesota found that when students have their minds on money, they tend to be both selfish and withdrawn.  Those who were "primed" by money imagery before being asked to engage in (or imagine) solitary, group or "helping" activities  

waited nearly 70% longer to seek help than those who[se attention was not directed to money]; spent only half as much time . . . assisting []other[s] . . . [and] preferred working alone even if sharing the task with a co-worker resulted in substantially less work. 

The young people whose attention was focused on money also  

chose solitary leisure activities . . . preferring a private cooking lesson, for instance, over a dinner for four [and] when asked to set up two chairs for a get-to-know-you chat with another volunteer, . . . placed the chairs further apart than subjects [whose attention had been directed to non-monetary themes].

These findings, concluded the researchers, suggest that thinking of money puts people in a frame of mind in which they don’t want to depend on others and don’t want others to depend on them.  (see Thinking About Money from Neuromarketing here).  

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There isn't a mediator working today who can teach you more about obtaining the winning edge in your next mediation or negotiation than Judicate West's Judge John Leo Wagner (Ret.)  

Judge Wagner and I each have a negotiation seminar presentation that we have  separately presented to businesses and law firms.  

Judge Wagner is often willing to come along to one of my in-house gigs so if you'd like to hear him, give me a call at 323.217.5162. 

I've presented my seminar at the following locales to rave reviews -- O'Melveny & Myers; Squire, Sanders & Dempsey; Sony Pictures Entertainment; Musick, Peller & Garrett; Katten, Muchin; Selman, Breitman; Wilson, Elser; and, the Anderson School of Management, Summer Entrepreneurship Institute, among others.

I don't have Judge Wagner's list but if my presentations have been "raves," his have been even ravier (a word he would frown on but compliments he cannot deny). 

For more on Judge Wagner, see the extended entry.

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Copyright Charles Fincher at Scribble-in-Law, www.LawComix.com. 

You can buy this (signed!) and many other hilarious legal comics at the site that I've linked to above. 

What is it about Texas Lawyers and Art?  See Billing Time. 

Whatever it is, we're grateful for the laugh of recognition.  We all take ourselves too seriously and need to have our balloons popped like this at least once a week.

Why have I never seen any of these before?

I'm going to be late for a mediation because I stayed too long on the Scribble-in-Law site.

Thanks Charles!!

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Check out this tele-seminar on Legal Ethics in Negotiation -- a fascinating topic and one that deserves greater attention. 

The seminar will take place at 1:00 pm ET on Thursday, December 21, 2006. The telephone-based program will last 60 minutes and is approved for one hour of ethics CLE credit in Kentucky. 

Click on the link above and here for Ben Cowgill's stellar Legal Ethics Newsletter. 

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Over at the Legal Theory Blog we hear about the publication of Negotiation from a Near and Distant Time Perspective.

Translating from the academic into standard English , Psych Profs Marlone D. Henderson , Yaacov Trope and Peter Carnevale have apparently made the following research findings:

1.  parties are less likely to pursue piecemeal single issue resolutions and more likely to explore integrative, multi-issue solutions to a problem as the amount of time elapsing after a negotiation increases; 

2.  parties show an increased interest in conceding the lowest priority issues, but evidence less interest in conceding the highest priority issues as the amount of time elapsing after the event being negotiated increases; and,

3. parties make more multi-issue offers and are more likely to trade conessions on low priority issues for high priority issues as the amount of time elapsing after the event being negotiated increases.  

I'm happy to read that the article also discusses "implications for conflict resolution and construal level theory" since I don't much understand the three points mentioned above, let alone what "construal level theory" might be.  This is the point at which I mention the fact that I've earned not only my J.D., but also my LL.M.

Note to academics.  It's actually easier to write the way you speak.  And who knows, you might get some cross-disciplinary interest from outside the academy (the real world) if you try to make your work accessible to the rest of us poorly educated citizens. 

Remember that one of the smartest men in the world, physicist Stephen Hawking had this to say about time -- "it's what keeps everything from happening at once."

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E! Online reports in Michael Richards' Mea Culpa Mediation that the former Seinfeld star and local comedian will meet with the African-American comedy club patrons "whose heckling triggered the racist rant heard round the world."

The men's attorney, Gloria Allred, said a local judge will facilitate a meeting to help the parties resolve the dispute, apparently to open with a "personal apology for [Mr. Richard's] behavior."   

The value of apology in resolving litigation or preventing suit in the first instance remains a matter of controversy among ADR professionals and scholars alike.  

The most thorough and thoughtful article I have read on the issue is Apology Subverted:  The Commodification of Apology.  The article's author, Lee Taft, argues that apology loses its moral force if used as a bargaining chip, particularly where the transgressor is protected from liability for his admission of wrongdoing.

See also Marlynn Wei's 2006 article, Doctors, Apologies and the Law, an Analysis and Critique of Apology Laws from the Yale Law School Student Scholarship Series and Erin O'Hara's Apologies and Thick Trust -- What Spouse Abusers and Negligent Doctors Might Have in Common , which I've blogged about earlier here and here.   

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Because I've been building a new business for the past two years and do not have a money tree in my back yard, I've learned to appreciate the value of barter.   

In her ground-breaking legal memoir Alchemy of Race and Rights (Harvard Univ. Press 1992) Columbia Law School Professor Patricia Williams talks about lessons learned in a local "barter circle."

Once upon a time some neighbors of mine included me in their circle of barter. They were in the habit of exchanging eggs and driving lessons, hand-knit sweaters and computer programming, plumbing and calligraphy. I accepted the generosity of their inclusion with gratitude. At first, I felt that, as a lawyer, I had nothing to contribute. What I came to realize with time, however, was that my value to the group was not calculated by the physical items I brought to it. These people included me because they wanted me to be part of their circle, they valued my participation apart from the material things I could offer. So I gave of msyelf to them, and they gave me fruit cakes and dandelion wine and smoked salmon, and in their giving, their goods became provisions. Cradled in this community whose currency was a relational ethic, my stock in myself soared. My value depended on the glorious intangibility, the eloquent invisibility of my just being part of the collective; and in direct response I grew spacious and happy and gentle.

The Benefits of Bartering in Contemporary Commercial Transactions

Professor Williams' paen to barter doesn't sound merely cosy and homey, you say, it positively reeks of flower-child collectivism. What could Professor Williams' little barter circle possibly have to do with settling my $200 million unfair competition lawsuit?

A lot, actually. If you look past the smoked salmon and the dandelion wine, you'll find the phrase "currency [of] relational ethic." Williams is talking about the intangible value of relations as a means of exchange rather than (or in addition to) the numeric value of money.

Understanding Money

We've become so used to valuing most everything in monetary terms, we tend to forget that money is a representation of value rather than value itself. When negotiating a commercial dispute, we all benefit from reminding ourselves that money is simply one medium of exchange -- a good one, but not the only one.

Money is so good at serving as an objective measure of value; a standard of deferred payment, a store of wealth, a criterion for measuring worth and a “universal means to whatever ends are available in the market” (Ingham, Geoffrey MONEY IS A SOCIAL RELATION (2002) 54 Review of Social Economy 507) we often fail to look elsewhere for resources.

Integrative or interest-based negotiations flourish whenever the parties are able to identify tangible goods or services as well as the intangible benefits (apologies, recognition, respect, etc.) that might be available to sweeten a monetary exchange.  

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"C.E.O employment contracts have become like prenups.  Instead of specifying what the signers will deliver, they concentrate on everyone's rights if things go wrong."  Nell Minow, Editor, Corporate LIbrary.  For an in-depth look at the negotiation of CEO salaries and the forces that are changing the playing field, see today's New York Times article, Signing Up a New Chief in the Age of  Prenups.

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The Case on a Single Page

More great ideas from the Trial Lawyer Resource Center.

The Case on a Single Page by trial attorney Gary Hill.

Being overwhelmed by a large case can be demoralizing. Reducing the entire case to a single page can add perspective and a sense of control. Place a single sheet of paper in the landscape position and fold it in half and then in half again. There are now eight sections. Name each section: PreTrial motions, Voir Dire, Opening Statement, Witnesses, Evidence, Charges, Closing Argument. List only what you need in each category to put up your case. This exercise will often point to gaps in the case, suggest themes, or trigger changes in the presentation of the witnesses, evidence or argument. You can also keep this summary of the case in the inside pocket of your suit coat as a security blanket at trial. What a great idea. A very simple way to reduce the case to it’s basics and make certain that you focus on what is important.

The Settlement Equivalent

I prepare for mediations by reducing the parties' factual assertions and legal contentions to a single page of two columns -- placing opposing facts and contentions side by side.  Often, I give the document to the parties so they can:

1.  see what the mediator is thinking (i.e., has she gotten a key point or factual allegation wrong); and,

2.  see their opponent's alternative world hard against their own view of the case.

If you have your own "single page" suggestions, please send them along!

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. . . understanding cognitive biases can help the parties settle 

I've recently helped several small businesses work out the termination or renewal of business ventures in response to accusations of fraud and the usurpation of corporate opportunities. Although none of these mediations has involved Fortune 500 companies, the owners faced potential losses in the hundreds of thousands to millions of dollars.

Because the money expended on lawyers and forensic accountants hits the bottom line of small businesses faster and harder than those spent by larger companies, critical decisions must often be made in the absence of verified accounting and factual information.

When it would cost tens to hundreds of thousands of dollars to conduct the discovery necessary to truly know your best alternative to a negotiated agreement, what negotiation tools might help your beleagured and embattled commercial clients?

First the Hypothetical

With names and facts altered to protect confidentiality, consider the recent negotiated settlement of a corporate dissolution and accounting action.

The owners, Tom Jones and Bob Smith have been profitably importing restaurant equipment from Hong Kong since the early '90s. In the year prior to litigation, their business -- RSI -- began to experience difficulty in acquiring the same quality goods in a similar price range as it had in earlier years. At the same time high quality goods became scarce, Jones entered into a business venture with a restaurant supply wholesaler selling equipment similar to that imported by RSI.  Smith had also entered a new business venture with a restaurant equipment retailer. 

You don't need to understand the illusory correlation bias to see the lawsuit coming. 

The Business Dissolution Litigation

Smith sues for RSI's dissolution and seeks an accounting, accusing Jones of various business torts.  Jones files a cross-complaint accusing Smith of diverting to his new retail business imports that would have gone to RSI. The RSI warehouse is currently filled with goods imported from an inferior secondary market. Smith claims RSI will be unable to sell these goods for a profit. Jones claims they can be sold for a $500,000 and $600,000 profit.

The parties schedule an early mediation in an effort to avoid crushing legal fees.

Mediator Intervention 

At the commencement of the mediation, each party tells the mediator that he is "absolutely certain" that his valuation of the mechanise is "right." 

How do the parties calculate their potential damages (to analyze their Best Alternative to a Negotiated Agreement) or value the worth of the business for mutual buy-out offers in the face of such wildly competing claims?

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In a year 2000 article published in the Annual Review of Psychology, Harvard Business School Professor Kathleen L. Valley and Senior Research Fellow Max H. Bazerman, with colleagues Jared R. Curhan and Don A. Moore, synthesized negotiation studies to date, and pinpointed five emerging areas of thought.  

For the full article on this effort, see the Harvard Business School Working Knowledge article The Emerging Art of Negotiation. 

We provide only the executive summary here.  

1.     Preconceptions Count

"Almost everyone who walks into a negotiation," say the authors, "already holds a fairly strong preconception of how they expect it to go down. How such . . . 'mental models' actually control the outcome of a negotiation is one of the important new areas of investigation." 

Experiments have shown that the degree of cooperation among participants was affected far more by what the game was called—the "Community Game" or "Wall Street Game"—than by the individual dispositions of the participants. 

2.  Ethical  Behavior

Laboratory research on negotiation ethics is beginning to reveal the flexibility and ambiguity in "standards" applied by negotiation "players."  

Once again confirming what common sense tells us, researchers are finding that people see themselves as more ethical than the next person, but justify their own ethically questionable behavior as self-defense.

Hence the term "defense budget" as we wage a preemptive war against, well, not against Iraq exactly, but against the present chaos there.

 

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I was once a plaintiff's personal injury attorney.  I don't talk about this much.  Everyone I knew in law school, most particularly my professors, were aghast when I told them that I'd be joining a two-man plaintiff's personal injury firm after law school.  I had the resume of a student who could have gone to a "big" firm with the accompanying "big" salary and "big" status. 

But I wanted to try cases.  I was terrified of trying cases.  Which was, I think, my number one motivation to simply be handed the file on the slip 'n fall at the local Ralph's and pushed into the courtroom.  Sink or swim.  I also believed in the cause.

There are a lot of reasons why I left that practice after three years and joined what passed for a "big" law firm in the town I was then practicing in  -- Sacramento (the still great Weintraub Genshlea law firm).  But I never lost the "edge" I developed representing injured plaintiffs.  Nor have I lost my deep respect for (and, okay, I'll admit it) attraction to, trial lawyers.

Confessional out of the way, one of my blogging buddies turned me on to this FABULOUS trial lawyer's blog -- Trial Lawyer Resource Center. 

If you want to get into the mind of your opponent, you couldn't go wrong by doing so in the the systematic analytic fashion recommended by trial attorney John Romano of West Palm Beach in Predicting Your Opponent's Strategy -- the O.S.P.A. Model.

Last year, mediating an age discrimination case, I asked defendant's in-house counsel (who seemed plenty bright and fiercely competitive) to craft a closing argument for the Plaintiff while I was in separate caucus with her opponent.  I did this because I didn't seem to be making any progress in getting her to see the risks her company was facing if the case went to trial.  

I'd love to say that this resulted in settlement (mediators and trial lawyers love to publically talk about their successes, rarely their failures).  It didn't.  Defense counsel did make one hell of a closing argument for the Plaintiff, however.  At least I knew she understood the risks and I was able to move on to discuss the real reasons the case wasn't settling.  

I've followed up that case but the defense remains intransigent.  They must know something I don't.

In any event, I highly recommend John's article on a systematic analysis of your opponent's strategy.  I can think of a couple of my own cases -- one's where I repeatedly asked myself -- "what can they possibly be thinking?" -- that could have benefited from this process.

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"Tough" or competitive bargaining techniques include making high initial demands; maintaining those high level demands throughout the course of the negotiation; making few (and small) concessions; and, adhering to a high level of aspiration for your own side.

Competitive negotiators gather as much information from their competitors as they can; give as little information about their own position as possible; bluff, mislead; and threaten retaliation if the other side does not comply.

We'll discuss why you might not want to bargain competitively in later posts. The purpose of this short post is to help the more cooperative bargainer deal with a tough guy.

Competitive negotiators:

1. sub-divide concessions by dividing issues into their smallest possible parts,
offering concessions only on the sub-parts;
2. make ambiguous or hypothetical offers that they can later disown;
3. demand principled justifications for the competitive bargainer's positions; and,
4. respond to intransigence with intransigence, cooperation with cooperation. 

Once you've worn the competitive bargainer down, the following questions will help you turn the negotiation into a more cooperative endeavor:

• what does your opponent think a "fair" solution to the problem might be
• which issues are most important to your opponent and which less or unimportant
• how would your opponent react to his own proposal if he were on your side of the table
• what are the intangible costs and hidden business costs of continuing the dispute or failing to close the deal
• what would a future without the dispute or with the deal in place look like

The greatest mistake of every young negotiator is to respond to competitive bargaining moves by offering concessions. The "tit for tat" games we engaged in on the playground are reflexively played out in every negotiation. You must respond to challenge with strength and resolve. The competitive bargainer will always out-negotiate his cooperative opponent unless the cooperative negotiator is prepared to push back when pushed.

The secret of the successful negotiator is her refusal to walk out of the room until the deal is done. Push back if need be, but do not cut and run.

For more on competitive and distributive bargaining, see Beyond Intractability's Knowledge Based Essay on the topic here.

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Negotiators have much to learn from game theorists. In the book, Higgling: Transactors and Their Markets in the History of Economics, edited by Mary S. Morgan (Duke University Press: Durham 1994) contributor Robert J. Leonard, lists six factors that affect bargaining outcomes as follows:

1. General bargaining dispositions. Tough bargainers are dogmatic, possess a strong sense of themselves and have a highly competitive orientation in regard to personal strength.

2. Payoff system. A negotiator's willingness to make concessions is strongly influenced by what he believes to be the minimum or maximum necessary to provide him with any benefit of the bargain. Other "payoff system" factors include time pressure, the cost of no agreement, the threat capacity of one's bargaining partner and the size of payoffs.

3. Social relationship with the opponent. Not surprisingly, negotiators tend to be more cooperative when they have a friendly social relationship or when there are reasons to be concerned about the other's interests. This is why hostage negotiators always ask captors to take food orders from, and inquire about the medical needs of, their captives. Once the captors begin to take care of their victims, they begin to actually care about their charges.  

4.  Moral Appeals.  Research has proven that moral appeals result in greater concessions by the one from whom concessions are sought. The negotiator who suggests that certain concessions are necessary to satisfy his basic needs or expresses the belief that his negotiating partner will treat him fairly does better than the negotiator who does not appeal to moral considerations. This is an example of "trading power for sympathy," a bargaining tactic often referenced in Ken Cloke's writings.

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In his book Blink, Malcolm Gladwell uses the term "rapid cognition" in reference to what most of us think of as intuition. Gladwell avoids the "i" word because he does not want his readers thinking he's referring to emotional responses. Rapid cognition, he stresses, refers to our rational thoughts and impressions. Though one suspects that Gladwell steers clear of emotion so he won't be called a "girlie man," he does in fact have a more serious purpose in mind.

Gladwell explains:

I think that what goes on in that first two seconds [of thought] is perfectly rational. It's thinking -- its just thinking that moves a little faster and operates a little more mysteriously than the kind of deliberate, conscious decision-making that we usually associate with "thinking."

According to Gladwell, our rapid cognition often produces far better results than our painstaking analytic analyses of the vast amounts of information we professionals routinely gather.

Diagnosing Heart Attacks with "Incomplete" Information

To demonstrate his point, Gladwell tells the story of one hospital's attempt to encourage its physicians to use their RC in diagnosing heart attacks. The hospital instructed its entire staff of emergency room physicians to gather less information concerning their patients' condition before attempting to diagnose a heart attack.

This information-limiting scheme, allowed the doctors to zero in on just a few critical pieces of information -- like blood pressure and the EKG -- while ignoring everything else, like the patient's age and weight and medical history. 

The physicians resisted of course, because they were committed to the idea that more information is always better.   When forced to rely upon limited information however, the accuracy of diagnoses in the ER increased dramatically.  

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"The negotiation," say seasoned mediators, "does not begin until the parties reach impasse."

I always liked this phrase. It implies the kind of hard-headed can-do attitude I'd seek out in my own negotiation partner. It is resonant of those early injunctions of the trial attorneys who trained me. Though, come to think of it, none of those is suitable for a "family" blog.

I have to admit that my understanding of the impasse busting phrase took a while to sneak up on me. Having mediated a couple hundred settlement discussions now, its meaning is obvious.

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I won $200 at Morongo recently, accompanying my husband to one of his law firm's business development events. I always think gambling (excuse me, gaming) outings are good for lawyers and business people -- the litigation risk- taking analogies being so plentiful.

The lesson from this trip, however, was not about sunk costs or risk aversion. It was about my own subjective experience of money.

"Don't worry," I was saying to Mr. Thrifty, as I pulled three twenties from my wallet to pay for an afternoon gourmet picnic in Griffith Park. "I'm paying for it with the casino's money."

Thrifty gently reminded me that this was the third time I'd spent my winnings --the first on that spa visit before I hit the gaming floor; the second on a few Crate and Barrel essentials we picked up at the outlet stores so conveniently located next to the hotel; and, the third for our picnic in the park. Actually, by the time we were collecting our food tickets, I'd also "spent" my unexpected windfall on the gift I'd planned to buy for my father's birthday the following week. 

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Trusting Your Adversary's Bottom Line

It was 7 o'clock on a mid-summer evening and the HMO's representative was packing up his brief case. "I appreciate your hard work," he was saying, "but I simply don't have the authority to compromise any further."

Though we'd only met that morning, I was inclined to believe him because he'd played straight with me throughout the day. Still, no one ever tells you their true bottom line and the number from which Mr. HMO refused to budge seemed odd to me. $124,000. It didn't feel like impasse.

The facts were simple and undisputed. The HMO made bookkeeping errors. As a result, they overpaid Dr. X $200,000 during the previous three years. Dr. X had no good defense to repayment other than an allegedly failing practice and general lack of assets. Business reverses. Divorce. That sort of thing.

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INTEGRATIVE OR INTEREST-BASED BARGAINING IN CONSTRUCTION DEFECT LITIGATION

I had the great good fortune to study construction defect mediation recently with two masters of the trade,George Calkins and the Hon. Kevin W. Midlam (Ret.). These two know their way around a construction site; a courtroom; an insurance policy; the law; and, ways to manage and resolve complex construction litigation better than anyone I've ever met.

Though we didn't engage in much "mediator speak" at the seminar -- integrative bargaining and the like -- it's clear that you need to know what Calkins and Midlam have to teach if you want to explore anything other than the tip of the CD iceberg. I did, however, tell one interest-based negotiation story in class that piqued the curiosity of a few classmates. Because it illustrates the potential to reach the parties' interests when you don't know what a cripple wall is, I repeat it here.

I dropped by Judge X's courtroom not long ago as she and Mediator Y were helping the parties settle up with the last couple of subcontractors involved in a Southern California residential development. The sub and his attorney were served late in the case; substantial attorneys' fees had already been expended; and, and the sub's attorney had promised not only complete victory, but reimbursement of all attorneys' fees in the process.

Mediator Y had reached impasse and Judge X was on the bench. They thought they could get the contractor to cut the sub loose for a dismissal with mutual general releases. The sub and his attorney were resisting this generous offer. Since I'd dropped by, could I help?

Sitting in the Judge's chambers, the sub's attorney immediately launched into a tirade about the injustice of his client's having being dragged into the litigation; his planned strategy for victory at the upcoming trial and the reasons that victory would be capped by a successful malicious prosecution action. The sub himself seemed enthralled with his pit-bull counsel and all discussion about the merits of their position made both men dig their heels in deeper.

I'm not certain when I began to realize that the attorney's bravado signaled something closer to a plea for help than a cry to battle. The thought surely originated when I started asking questions about the likelihood of victory in hard percentages.

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Your Clients Would Rather Be Happy than Right

For the third time that day, the Bank's CEO was saying, "if I felt we'd treated her unfairly, I'd put some money on the table" and for the third time that day, the Plaintiff's attorney responded with one or more of the several legal positions he was certain would defeat the pending summary judgment motion.

My friend the employment mediator was telling me this story at the Starbucks located in the wide courtyard outside the downtown Los Angeles Superior Court.

"Two things kept nagging at me," he said. "First was the Bank's promise to pay the plaintiff $30,000 during her first three months of employment -- only $2,000 of which she'd received. Second, was her termination during her first week on the job. No one questioned the $30,000 promise, but everyone, including plaintiff's attorney, believed the subsequent written employment contract trumped the oral promise. Plaintiff's legal theory involved a complicated conspiracy by the branch manager and gender discrimination. The Complaint didn't even seek the $30K as damages."

I sipped my latte and smiled, knowing it would have taken me at least three repetitions of the CEO's "fairness" comment to get it as well.

"So what did you do?" I asked, as lawyers on their way to the morning calendar call surged around us.

"I finally said, 'what about the $30,000?' of course." He was grinning now, and shaking his head in that abashed way we do when we think we should have figured out the problem long, long before we actually do.

"And?"

 

 

 

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Negotiating with a Full Deck

As we all know, negotiating isn't like gambling, negotiating is gambling. All negotiations require the bargainers to evaluate the potential risks and likely benefits of any offered deal -- whether it be a million dollar demand to settle a lawsuit or a $20 offer to try out a new internet service. Since we can can never truly know the mind of another nor predict the future, we should, at a minimum, know our own propensities in regard to risk as well as our best alternatives to a negotiated agreement ("BATNA").

Recent Research on Loss Aversion

Fellow legal blogger, law professor and commercial litigator Michael Webster reports on the most recent research on loss aversion as follows:

Over at the Neuroeconomics blog, they ask are we bad forecasters of loss? In the economic literature, loss aversion is described as turning down risks or gambles with large chance of loss, but with a positive expected value. For example, consider wagering $50 on a bet that returns $200 30% of the time and 70% of the time nothing. Even though the bet has an expected value of $60, which is greater than $50, most people will not play this bet. What is the basis for risk aversion?

Here is Neuroeconomics' conclusion:

Predications of emotional impact weigh heavily on decisions. In fact, people avoid risk even when faced with the prospect of large gain, predicting loss will hurt them much more than an equal gain will please them. If that is true, this phenomenon (termed loss aversion) is simply a rational product of accurate affective forecasting. Currently, research seems split on this question. Studies have indicated that loss induces more intense neural activity, indicating that our forecasting may be valid. However, behavioral economics generally proposes that we are bad forecasters, and studies show that we consistently overestimate the intensity of emotion from life tragedy.

In a new study, participants effectively minimized impact of loss after a game of luck using various coping mechanisms, such as dissonance reduction,self-affirmation, motivated reasoning, and positive illusions. Researchers found that "there was no evidence that losing actually had a greater emotional impact than winning," showing we are indeed poor loss forecasters".

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"Finesse the Impasse by Changing the Deal" -- Negotiation Wisdom from Lou Meisinger

Former Executive Vice-President and General Counsel to The Walt Disney Company, entertainment law heavy-weight Lou Meisinger is not only breathing new life into Sheppard, Mullin's entertainment practice, but also mediating and arbitratingthe same kind of high-stakes, complex commercial and entertainment disputes he spent nearly forty years litigating.

During a recent conversation with Lou about negotiating the resolution of commercial litigation, he said one of those things that can change your negotiation strategy (and hence, your life) forever.

Finessing Impasse by Changing the Deal

"One of the best ways of breaking impasse during the mediation of a litigated case," Lou casually observed, "is to finesse it by transforming the litigation into an opportunity to make a deal."

I'd just finished digesting "negotiation leverage belongs to the party who is perceived to be the one most able to afford the consequences of a failed negotiation," and now Lou was delivering the holy grail of Breaking Impasse for mediators. It was like being given a third lung. I could breathe again.

"Transform the litigation into an opportunity to create a business deal." What did that mean?

Though Lou had lots and lots of examples (what a generous man he is!) I don't want to steal his stories, all of which I'm sure he's putting to excellent use when parties to sophisticated, complex commercial litigation have the good sense to hire him a a mediator. I do have a story from the negotiation academics, however.

Three Dimensional Negotiation

On the same day I had this impasse transformation conversation with Lou, I started reading 3-D Negotiation by Harvard Business School Professors David A. Lax< and James K. Sebenius(read the Introduction to the Book Here).

Lou's advice to "finesse the impasse by changing the deal" is discussed in great, articulate and academic detail by Lax and Sebenius. Before going there, it's important to know what they mean by the three dimensions of a deal. Those dimensions, they counsel, are tactics, deal design and set-up.

Tactics

Briefly, "tactics" are strategies exercised at the bargaining table, such as improving communication, building trust, countering hardball plays and bridging cross-cultural divides.

Deal Design

At its simplest, deal design involves the invention and structuring of agreements that create greater value for all parties, meet the parties' objectives better than easily conceived alternatives and are more durable.

Setup

Finally, set up is the architecture of the deal that ensures the most favorable scope, by involving the right parties, addressing the right issues, and considering all no-deal options. It also involves negotiation sequencing and basic process choices.

Click on the extended entry for the application of these principles to a high stakes venture capital negotiation.  

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These are the words I never said/This is the path I'll never tread/This is the fear/This is the dread/These are the contents of my head/And these are the years that we have spent/And this is what they represent/And this is how I feel
Do you know how I feel ?/'cause i don't think you know how I feel/I don't think you know what I feel/I don't think you know what I feel/You don't know what I feel. Annie Lenox, Why, from Diva

(see also You Just Don't Understand -- Men and Women in Conversation by Deborah Tannen)

We are once again indebted to New Yorker writer Malcolm Gladwell for making social science research useful.

In his April 10, 2006 articleon Columbia University Professor Charles Tilly's book "Why,"Gladwell explains the sociologist's "anatomy of explanations."

Why should negotiators care? Because explaining why our bargaining partners should settle instead of litigate requires persuasive story-telling -- a compelling account of our business requirements and capabilities -- a reason why what we want is fair and reasonable, even just.

Types of Reasons

Professor Tilly has created four reason-giving categories:

Conventions: These are the rules your mother and grade school teachers taught you. Don't be a tattle tale. Share with your sister. Don't whine. Say thank you to the nice man for giving you an extra dollop of ice cream.

Stories: This is what we attorneys do for a living. Tell stories, read stories, make up stories, listen to stories. Then we compare one story (Mrs. Palsgraf was waiting for a train when a man holding a box of firecrackers stumbled out the door and then) with another story (the sherriff stopped Mr. Green on Highway 50 but let him continue driving even though Mr. Green was clearly drunk and then he passed a truck on a narrow road and then ).

Codes: These are "high-level" conventions -- the formulas that invoke procedural rules and categories. The judge and jury apply codes such as "oral agreements can't transfer real property" to the Plaintiff's story about her landlord's promise to extend her lease for a year.

Technical Accounts: These are stories informed by specialized knowledge and authority. They're the stories your expert witnesses tell.

Talking Past One Another  

Anyone who's spent even a few weeks in law school knows these categories. So why are we bothering with them here? Because, according to Tilly, reason giving is most effective when we "match" the kind of reason we give to the particular role we are playing when the reason is necessary. If one person is giving a technical account and the other a story, for instance, the chances are remote that they will ever begin to understand, let alone agree with, one another.

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Because People often ask me about the wisdom of making aggressive opening offer, I'm summarizing below a recent article on anchoring by a Kellogg Graduate School of Management Professor. His conclusion is that people aren't aggressive enough in their opening offers.

Although we are often told that only "reasonable" first offers influence negotiation outcomes, I am unaware of the existence of any research to support this dictum. Unfortunately, I suspect that the "reasonable first offer" theory is from the Graduate School of Feeling Good About Ourselves at Kumbya University.

The research discussed below is typical of all of the research and statistical studies I've recently read. If you've got contrary authority, please do pass it along.

1. Research shows that how we respond to an offer is highly influenced by any number that enters the negotiation environment. (one study used zip codes to influence numeric estimates).

2. The greater the parties' uncertainty about the value of the item/s being bargained for the stronger the anchoring effect of the first offer.

3. That anchoring effect will continue to exert a strong pull throughout the rest of the negotiation THE SUPPORTING RESEARCH

 

The Supporting Research

Researchers had real estate agents inspect a house and estimate its appraisal value as well as its purchase price. they manipulated the house's list price, providing high and low anchors. All of the agents' estimates were influenced by the list price even though they denied factoring the list price into their decisions. When challenged, the agents cited features of the property that would justify their estimates.

In another study, researchers sent customers to mechanics to obtain estimates on the value of a car. The customers asked the mechanics for their opinions only after suggesting a value of their own. Half the mechanics were given a low anchor and half were given a high anchor. The mechanics estimated the car to be worth a thousand dollars (actually they were Deutsche Marks) more when they were given the high-anchor value.

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Weren't we just talking the other day about finessing impasse by transforming litigation into a business deal? I guess we were just a little bit behind the times because it appears that no one even bothers filing a lawsuit anymore -- they go directly to the negotiation that would settle it.

Hmmmm.  You might consider taking the negotiation class I've been providing gratis to lawyers who want to improve their negotiation skills so they can enter the 21st century and make, say, something north of $1 billion on a sale of their start up -- YouTube -- to another company -- GOOGLE -- that was itself a start up only eight years ago (is that possible? and I thought "to google" had been a verb for much, much longer. I grow old . . . . )

The referenced AP story is about the way YouTube emptied its potential liability dumpster before selling itself to a very high bidder.  Whether or not the posting of much YouTube content is "fair use" or not, both companies hedged their bets by causing YouTube to buy the rights to materials it has already posted and that it has been accused of infringing.  Right or wrong, the sound business decision was to strike a deal with CBS and two major music labels to, as the AP story put it, "befriend content providers and avoid copyright infringement lawsuits." 

As AP reported.

The separate agreements with CBS, Vivendi's Universal Music Group and Sony BMG Music Entertainment c[a]me less than a month after YouTube reached a deal with Warner Music Group Corp. Hours after announcing the agreements, Google Inc. announced it would acquire the video site for $1.65 billion.

YouTube and CBS will share revenue from advertising sponsorships of CBS Videos, CBS said.

CBS will also test new YouTube technology that will help the network find copyrighted content on YouTube and remove it. CBS will also be allowed to leave that content on the site, and share revenue from advertising that appears next to the copyrighted video.

Separately, Vivendi's Universal Music Group said Monday it agreed to give YouTube viewers access to thousands of music videos. The company said it and its artists will be compensated not just for the official videos, but also for user-generated content that incorporates Universal's music.

Sony BMG Music Entertainment, a joint venture between Sony Corp. and Bertelsmann AG, also said Monday it will make video content available on YouTube -- and will also let YouTube users include some catalog songs in their own amateur video uploads.

Sony BMG said it will share advertising revenue with YouTube for all music videos that incorporate audio or video works from the Sony BMG library.

"YouTube is committed to balancing the needs of the fan community with those of copyright holders," said Chad Hurley, chief executive of San Mateo, Calif.-based YouTube.

 

 

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 In her working paper, Winning Legally: The Value of Legal Astuteness, Harvard Associate Professor of Business Administration, Constance E. Bagley posits that "legal astuteness" -- the ability of top management to effectively communicate and work with counsel to solve complex problems — is a valuable dynamic capability.

 According to Bagley, legally astute managers understand that "every legal dispute is a business problem, requiring a business solution." These astute managers will listen carefully to the legal advice given to them but they will not be overly deferential to their attorneys. Professor Bagley reemphasizes what all business executives now surely know, that "litigation is a 'zero-sum' game, with a clear winner and loser," leaving few opportunities for integrative bargaining.

 "Legally astute" business executives, she stresses, "take responsibility for managing their disputes and do not hand them off to their lawyers with a 'you-take-care-of-it' approach."

But how, you ask, does a "legally astute" manager retain control of a business problem that has become a multi-million dollar piece of litigation. Let alone in a way that synergizes the strengths and diminishes the weaknesses of everyone on the litigation team -- executives and trial lawyers alike.

Litigators: Bring Your Business Executives Back in from the Cold

 When mediating settlements of commercial lawsuits, I always begin by inviting the business executives back into the game. "Your lawyers," I remind them, "justifiably advised you not to talk about the litigation in public or satisfy your need to "tell your side of the story" at deposition. If you've heard it once, you've heard it a million times -- "today is not our day to win the lawsuit; today is our day to provide as little information as possible."

Settlement day, however, is the day to come armed with business information and business strategy.

 "Only lawyers," I say to managers, "have legal problems. You have a business problem you couldn't fix without the coercive power of the law. That legal power has now brought your opponent back to the negotiating table. The legal dispute is again a commercial problem for which there are myriad business solutions."

 "That's the good news," I say. "The difficult news is that it will take a lot of work from everyone and the end result is unlikely to look like the victory you once hoped for. Today we try to find a way to negotiate an agreement that is a better alternative than trial."

Then we all roll up our sleeves and begin.

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