Close the Gap App™ (sponsored by GoDaddy) is a powerful online tool that takes you on a guided deep dive into your career path. It's like having your very own career or business coach on your desktop or mobile device.
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You'll also learn how to create career narratives or stories to help you ace your interviews and present yourself with clarity and authority.
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The shared goal of Take the Lead and She Negotiates is to eliminate the wage and leadership gap by 2025. With the skill-building exercises and videos in The Gap App, you won't be waiting until 2025. In the short time it takes to complete the App you'll research your market value, learn the necessary strategies to negotiate it, and close your wage gap now.
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Top kudos and credit goes to Kendra Grant of Kendra Grant Consulting who served as our Learning Architect and Project Lead, and Josh Hoover of WP Bench who built and coded the App with his head, heart and hands.
HAVE FUN, AND PLEASE DO EMAIL US WITH YOUR FEEDBACK, QUESTIONS AND REQUESTS ONCE YOU'VE COMPLETED THE APP.
In a new study, Nour Kteily of Northwestern University and his colleagues found that low-power groups can influence powerful parties to engage with them through their framing of the proposed negotiating agenda. Specifically, across four experiments, participants in the high-power position were more willing to negotiate when a low-power group proposed negotiating less important issues before more significant areas of disagreement, rather than vice versa. This preference is the opposite of what low-power parties prefer, the researchers learned.
For mediators and group facilitators, the lesson is to assure the parties or the organization that you're going to move in baby-steps from the least controversial issues to the most. Most mediators already know that when the group or parties are able to resolve minor issues, their hope for resolution of the major issues increases. By structuring the negotiation, mediation or group experience from easy to "hard" the parties also begin to master conflict resolution "best practices" with the guidance of the mediator or facilitator.
As Ken Cloke reminded a roomful of mediators at the Straus Institute during the SCMA's Annual Conference this past Saturday, we should avoid the temptation to solve the central problem in dsipute before the people who have the problem are ready to solve it. We press the parties forward toward premature resolution at our peril.
Negotiators—whether politicians or homebuyers—begin with bold concessions which rapidly shrink the gulf between opposing sides. But like curves approaching an asymptote in geometry, as they near an agreement they level off and struggle to bridge the final, though trivial, gap. The effect of their ongoing quarreling is that, by the end, their motivating goal is not so much to strike a deal or make a sale as to make the other side yield, on no matter how minor a point. The fact of winning a concession matters more than the concession's substance. Not who yields most, but who yields last, appears to lose. The negotiation grows more bitter, the less remains at stake.
I was over at White & Case* last week talking to its women about the perils of negotiation without the inclusion of face-saving mechanisms. As I told them, it's a common mediation experience for the parties to make concessions in the millions to tens of millions of dollars only to reach final impasse over which side is going to pay the mediation fee ($5K) they'd agreed to split before the session began.
That's not about money, it's about face.
We call this end stage simply the final impasse but when the end stage stretches out into a seemingly endless future, we call it a "hurting stalemate" which is what we've got in Washington right now.
So how do you break an impasse that may or may not turn into a hurting stalemate?
First of all, you ask yourself and then, if possible, your bargaining partner, what hasn't yet been put on the table. Parties often reach impasse because they're attempting to achieve a hidden goal that they believe their negotiation demand will achieve or help achieve. It's been suggested, for instance, that shutting the government down and then re-opening only those agencies that the Republican party would like to see functioning is not a bad consequence of the parties' failure to reach agreement, but a hidden goal. If you take a look at the list of agencies shut down, you'll see there at least half of the GOP target list for ending or lessening government regulation. The Department of Education. The Environmental Protection Agency. And that department Rick Perry couldn't recall was on his hit list during the Presidential debates.
If you have a bargaining partner who is in fact achieving a goal - as collateral damage - that it might not otherwise be able to implement, you need to surface the hidden agenda. Remembering the importance of face-saving for a partner who may have backed himself into a corner, it's best to first raise the hidden agenda behind closed doors. Any negotiation in which all items to be traded are not on the table is a failed or sub-optimal bargaining session.
Face. We have a saying among my people that you can't save your face and your ass at the same time. Although there's real freedom on the other side of losing "face," few people are willing to go in that direction. It usually takes the total and complete collapse of your particular house of cards before you're ready to see the benefit of coming clean. That being the case, you've got to help your negotiation partner save face and you can't do that by airing a commercial comparing your opponent to a squalling baby during the national broadcast of a Sunday football game.
Bad move, Dems.
How might the GOP save face while backing down from the brink of economic disaster? Give them victory. They won the sequestration round of the Obama vs. the House negotiation. Give it to them. They already have it. Don't praise them. Complain about their victory far more often than you're doing now.
The far right Tea Party politicians are not worried about re-election but the Democrats potential Republican allies (the moderates) are terrified of losing their seats if they vote . . . well . . . moderately. Find a way to provide them with election protection. I believe this has been done several times before with the actual infusion of funds into certain politicians campaign coffers. It's also been done with political support from hidden stakeholders. The Chamber of Commerce, for instance, once a hidden stakeholder, has now come out in support of re-opening the government and authorizing a raise in the debt ceiling. Good for it. Wall Street too has been putting pressure on the right to avoid the danger a shut-down and a subsequent default would have on the world economy.
We're talking about interest-based, mutual benefit negotiation strategy and tactics here. It's not rocket science. What are your bargaining partners interests - what do they fear, value, prioritize, prefer, and, need. What do you have of high value to them (giving them a victory) and low cost to you (giving them a victory they already won).
Finally, there's "spin." That old Washington game we litigators and negotiators call "framing."
For god's sake, please stop calling the damn act Obama Care. Did the administration not see the Jimmy Kimmel episode where, when given a choice, random folks on Hollywood Blvd. said they liked the "Affordable Care Act" but despised "ObamaCare."
As Dick Draper recommends - if you don't like the conversation you're having, change it!
Finally, as the television ads being run on cable in Republican strongholds last week amply demonstrated (as if we didn't already know) the Tea Party's marching orders weren't to govern but to bring Obama down. Why not give them Obama's virtual head on a platter?
Count up everything the Obama administration lost due to GOP opposition since his '08 election. Treat it as news. Because visuals are so important, particularly to the chronically uninformed, actually put Obama's head on a platter and run his defeats over the image. Treat re-opening the government and raising the debt ceiling as magnanimous acts of the GOP in the face of the AntiChrist who would bring the country down to serve his own interests. Give them victory without compromising anything.
There are dozens of other ways to break impasse. But let me stress that prolonging a hurting stalemate is easy. You simply publicly demonize the "other guy" and dance the macarena over his grave.
JUST. STOP. IT.
And put into practice those best negotiation strategies and tactics that I guarantee you every politician knows.
In the context of negotiation, professors John Rizzo of Stony Brook University and Richard Zeckhauser of Harvard University asked a group of young physicians about their reference groups and salary aspirations.
Male physicians compared themselves to reference groups that earned higher salaries than the ones female physicians selected.
In addition, men’s salary reference points were more indicative than women’s of how much they earned later.
Finally, women tend to compare themselves to particular individuals whom they know, while men tend to assess themselves according to information about typical behavior.
Here's a simple solution to this problem. Research your market value in your specialty in your geographic area on payscale.com or glassdoor.com. If those resources aren't sufficient, pick up the telephone and make a few inquiries about compensation in your area.
Here's what I ask when I do this for clients.
Hi, I'm Vickie Pynchon. I'm a ___________ (attorney, author, consultant - whatever seems the best identity to get an answer to my question). I'm doing some market research on compensation for software designers/commercial litigators/OB-GYNs. Can you give me an idea of what people in that area with X years of experience are making/charging clients/etc.
With a mission to transform lives, She Negotiates gives women the tools and support to take responsibility for closing their own personal income and leadership gaps. “We start with the pocketbook because economic power is political power. And without political power, we have no voice. No presence. No platform. No credibility,” the site says. What sets She Negotiates apart? They know the personal, cultural and political landscapes that impact one’s ability to ask for what they want and move forward. The site publishes blogs posts and book recommendations, and offers virtual training, video tutorials, as well as consulting services for a fee.
If you are a consultant or solopreneur and you're offering a free consultation to give potential clients a slice, a sense of your value and skill, how is it going? Is it working? Or are you letting people pick your brain for free and off they go?
I think we all understand the motivation. You want to be of service, and to be known and valued so that people hire you.
But if we're truthful, the deeper motivation for giving our best stuff away is that we feel squeamish about asking for our value up front. Instead, we do the job before we get the job. Not good for wallets, reputations and credibility.
Try a Strategy Session. Think about offering a 60- or 90-minute strategy session at a discounted rate. If your hourly rate is $200, you might offer a 90-minute session for the same rate.
What you can give freely is the 10 minutes it takes to get connected, find out what your potential client's challenge is, and give them the opportunity to hire you for one of your business services, or a strategy session.
If you aren't ready for that approach, here are a few ideas for making you free consultations more fruitful:
Ask diagnostic, open-ended questions:
Get inside your potential client's pain and frustration by asking questions that reveal the full range of their goals, challenges and needs.
Empathize and be authentic:
Tell people you understand their dilemma. Assure them that the territory they're in is familiar to you, and something you are well trained and experienced to solve.
Focus on the big deal benefits of solving those challenges:
People who want to land a job or get a raise or build a better website or write a better press release, are motivated by what they value most. Yes, they want to solve the issue at hand, but what's more important are the values they will honor by doing so - like freedom, security, joy, beauty, and possibility. So rather than focusing solely on the features or process of how you work, ask them questions that help them understand why they want what they want.
Share your strategy
Once you've built trust, you can then focus on the features or the process of how you work. Once your potential client is invested in the benefits of your solution, will they be more open to hearing how you work.
Give your potential clients some homework
This is where you give some of your best advice, and some direction for handling a particular piece of the work.
If you're a website designer, you might ask them to complete some branding questions.
If you're a productivity trainer, you might ask them to survey their employers about their email program issues.
If you're a divorce mediator, you might give them a few pointers for having a conversation with their partner about a sticky issue.
If you're a landscaper, you might ask them to take photos of gardens they love.
Ask for the business
Diagnostic questions are also helpful in closing. You might say, "I'd love to work with you. What's your timeline for getting this project handled?" Or, "When would you like to begin?" Or, "What else do you need to know to get started?"
Use NO as an opportunity for clarity
If your potential client is unsure and not ready to commit, ask more diagnostic questions, like:
What seems to be in the way of making a decision?
What do you need to know to be comfortable saying yes?
Who are the decision makers?
What have you budgeted for this?
Would a payment plan be helpful?
By the way, NO is also an opportunity to offer the Strategy Session as a way of dipping their toes in before committing to your program or service.
The women in the ALM/Corporate Counsel survey who held the top positions in their law departments—chief legal officers and general counsel—reported an average total cash compensation of $575,200, while their male counterparts pocketed an average of $723,700. Female deputy chief legal officers surveyed brought home an average of $316,400 in total cash compensation, while men in the same positions made an average $386,700. Total cash compensation was calculated in the survey as a combination of salary reported as of March 1, 2013, and annual cash bonus for 2012.
Smaller bonuses for women accounted for a large part of the disparity between the numbers for top-level men and women corporate counsel. The survey indicated that GC and CLO women and their deputies made around 40 percent less in bonus payouts than men in the same roles.
The women in the ALM/Corporate Counsel survey who held the top positions in their law departments—chief legal officers and general counsel—reported an average total cash compensation of $575,200, while their male counterparts pocketed an average of $723,700. Female deputy chief legal officers surveyed brought home an average of $316,400 in total cash compensation, while men in the same positions made an average $386,700. Total cash compensation was calculated in the survey as a combination of salary reported as of March 1, 2013, and annual cash bonus for 2012.
Smaller bonuses for women accounted for a large part of the disparity between the numbers for top-level men and women corporate counsel. The survey indicated that GC and CLO women and their deputies made around 40 percent less in bonus payouts than men in the same roles.
First and foremost, understand that bonuses are negotiated.The Grindstone gave eight tips to help you negotiate your bonus some time ago and the advice is all the more important today. Career coach Rebecca Rapple advised women to remember that they are tough negotiators. "Realize," she said,
that it is a negotiation! Many people (but especially women) accept their year end bonus, or lack thereof, as a fact, rather than a negotiation. Far too often we hear people saying “You should feel lucky to have a job” and other self-defeating phrases. While, in reality, companies are lucky to have you! And its important to ask – and negotiate – for the compensation you deserve.”
Read the entire Grindstone article and then start planning your "ask" for your year-end bonus. Use our free resources here.
In a special free report from the Program on Negotiation at Harvard Law School, the smartest negotiatiators in the room offer their advice on the five top bargaining errors. Below is an excerpt with a link to the free report.
Viewing negotiations as win-lose
When negotiators come to the table assuming it's a win-lose negotiation, it is more likely to break down. Negotiators who are collaborative and willing to understand their counterpart's interests are more likely to negotiate mutually beneficial tradeoffs that result in more successful deals. Discover three proven strategies for finding value in the negotiation process.
Overvaluing your assets and your power
Business deals are built on relationships. When you're personally invested or believe you have more to gain, you can overvalue your assets and your power. Understanding the perspective and interests of your counterpart will enable agreements that benefit both parties and maintain strong business relationships. Learn how to prepare for a collaborative negotiation that avoids a power backlash and leads to success.
Overestimating the outcome and overcommitting to a deal
During the negotiation process, it's easy to lose sight of what you want out of the deal and ovecommit in order to make the deal happen. A keener understanding of what is valuable to the buyer and how committed your counterpart is to the deal will help you make better choices in the negotiation. Find out how to manage your bias and commitment to the deal before making an agreement.
The LOC describes this archive as a “selective collection of authoritative sites” associated with law schools, research institutes, think tanks, and other expertise-based organizations. “These blogs contain journal-style entries, articles and essays, discussions, and comments on emerging legal issues, national and international,” the LOC says.
Despite what the description says, several practitioner blogs, not affiliated with any school or organization, are included in the archive. Among them are Marc Mayerson’s now-defunct Insurance Scrawl, Howard Bashman’s How Appealing, Curacao lawyer Karel Frielink’s Karel’s Legal Blog, Victoria Pynchon’s Settle it Now Negotiation Blog, Scott Greenfield’s Simple Justice, Ken Lammer’s CrimLaw, Diane Levin’s Mediation Channel, and Jeff Beard’s LawTech Guru.
In a post this week at the Law Library of Congress blog In Custodia Legis, Matthew Braun, senior legal research specialist, provided further background on the archive. It was created, he says, “so that the legal events detailed and analyzed in the blogs of today can be studied for years to come.”
In a post this week at the Law Library of Congress blog In Custodia Legis, Matthew Braun, senior legal research specialist, provided further background on the archive. It was created, he says, “so that the legal events detailed and analyzed in the blogs of today can be studied for years to come.”
"Studied for years to come."
The LOC describes the archived law blogs as a selective collection of authoritative sites associated with law schools, research institutes, think tanks, and other expertise-based organizations.
Even sweeter but hilarious to anyone who survived "intro week" in law school. The dictate then was as follows: First you cite Harvard and Yale. Or as my Yalie husband would correct, Yale, then Harvard. After that, you took a trip through the legal Ivy League. Only if you were truly desperate did you cite, say, the Constitutional law professor at Chapman who is the only ultra-conservative voice against SCOTUS' recent Constitutiuonal stamp of approval on modernity (think Prop 8, DOMA).
I'll add links to all these other great legal blogs anon. In the meantime, click on Ambrogi's post for all the links. And thanks to my colleague, Don Philbin, for emailing me the link with a note of congratulations. His ADR Toolbox is must-read for all ADR practioners, most particularly those who appear before mediators and arbitrators.
As Colin Powell said, the most important information to gather in international diplomatic negotiations is "the other guy's decision cycle." And Don is the smartest ADR practitioner in the room. Know his decision cycle and your facilitated negotiations will deliver more than you ever dreamed they could.
Our column, Ask the Negotiators, depends on you for its success.Research shows that negotiators learn best when working out their own bargaining challenges instead of attending classes where they're asked to negotiate hypotheticals whose facts are limited and often don't pertain to the negotiation environment in which men and women are required to have an often difficult conversation leading to agreement.
So please, send your toughest negotiation problems to us. We rarely achieve salary increases of less than 20% for our clients whether they're seeking a raise or making a lateral move. We've helped business people sell their small companies to larger ones, assisted others in having difficult conversations with their current employers as a last step before job hunting, and have helped organizations get their people working together as a team again.
There's no negotiation problem too tough for us and if we don't know the answer off the top of our heads, we do the research necessary or seek out the industry experts who can guide us - and you - in the right direction.
Ladies and gentlemen! Start your engines! Life is about to get easier and work far better and more remunerative.
We advise HR people as well so its not all employee related. We deal with companies, entrepreneurs, non-profits and individuals who are all seeking to get what they deserve - a happy, fair, productive and just workplace for everyone.
Researcher Gerben Van Kleef of the University of Amsterdam found that only low-power negotiators were strongly influenced by their opponent’s expressions of anger; they made larger concessions than when no anger was expressed. High-power negotiators barely seemed to notice the other side’s emotions; they identified their own true bargaining interests and offered only the concessions necessary to reach a good deal.
How can you gain this advantage?
Immediately before negotiating with someone you know to be emotional and demanding, reflect on a time you negotiated with a strong BATNA. Recall your sense of confidence and control. Generating psychological power can immunize you from your opponent’s angry tactics.
We're all somewhat afraid of conflict, at least those of us who are not sociopaths.
Men and women both want their days to pass without having accusations hurled at them, without hearing what a frenemy is saying behind their backs, and without stirring their colleagues or clients to anger.
Women, however, do tend to react to a negotiation challenge somewhat more fearful of an angry response than do men.
I've said before that men can claim to be unemotional only because they don't believe anger to be an emotion and I think there's more truth to that than humor.
I had a client once who was negotiating her bargaining partners toward a million per year. That's what everyone in her niche was making. The men with whom she was negotiating gave her many reasons why she was an outlier and worth less than her peers (all of whom were men and most of whom were twenty years her senior). But it was she who they listened to at industry conferences. She was the expert. They'd just found a cozy retirement niche.
Eventually, of course, her bargaining partners grew testy and finally one pitched all all-out temper tantrum worthy of a two-year old, telling her she'd never succeed, never reach the heights of the profession she'd already scaled. Told her she was fooling herself. Told her she didn't deserve it. Told her to get a grip on herself and remember who she was.
We responded with the best negotiation tactic for a bargaining partner who betrays us. We played "tit for tat," punishing the miscreant proportionally by simply going 36 hours without returning his phone call. When he finally did reach her, he apologized and, on top of that, increased his last offer without responding to a counter. In other words, he apologized by bargaining against himself, just about the only rule young attorneys are taught by their elders. Not to bargain against yourself.
So if you're worried that your negotiation partner is going to get angry at you, don't worry. Not only is "tit for tat" a powerful game changer, but recent research cited by the Harvard Program on Negotiation shows that only low-power negotiators [are] strongly influenced by their opponent’s expressions of anger.
Those negotiators who didn't trust their own power made larger concessions than when no anger was expressed. High power negotiators, however, barely seemed to notice the other side’s emotions; they identified their own true bargaining interests and offered only the concessions necessary to reach a good deal.
Here's the best news, anyone who wishes can gain the "high power" advantage. According to Harvard, our best strategy, particularly if we're anticipating an emotion response is to reflect on a time you negotiated with a strong [alternative to a negotiated resolution]. Recall your sense of confidence and control. Generating psychological power can immunize you from your opponent’s angry tactics.
Got that? Add a power pose (arms above your head, hands behind it, standing tall to trigger a flood of testosterone) and you'll be the leader of the pack.
I don't believe these arguments would fly in California, but in Delaware where so many corporations are born and with whose law so many contracting parties agree to comply, you can be liable for benefit of the bargain damages if you fail - in bad faith - to negotiate to conclusion agreements memorialized only by term sheets (which usually have too many holes to be enforceable).
A term sheet can play a useful role by allowing the parties to focus on key issues first, without getting bogged down in details. But what happens when a party agrees to a term sheet but insists on very different terms for the final contract?
The Delaware Supreme Court held in Siga Technologies, Inc. v. PharmAthene, Inc., No. 314, 2012, __A.3d__, 2013 WL 2303303 (Del. May 24, 2013), that a bad-faith failure to negotiate a final deal based on a term sheet may have harsh consequences. The breaching party may be liable for “benefit-of-the-bargain” damages reflecting the profits the counterparty would have received if the final contract had been signed and performed. While this ruling is based on Delaware law and the specific facts of that case, the message to negotiators is clear: Don’t agree to a term sheet unless it is explicitly non-binding or you are prepared to continue negotiations in good faith, consistent with the term sheet.
Job candidates are rarely in a position of power as interviewers decide the fate of their future career prospects. Yet, the winning strategy in these situations is thinking that one has power, in spite of the situation. As a candidate, how can you engineer a powerful mindset? Well, a simple trick is to remind yourself about a time you had power over a situation right before an interview, and invoke the precise feelings associated with that memory – feelings of confidence and competence, as well as decisiveness during decision making.
One of my recent research projects, Power gets the job: Priming power improves interview outcomes co-authored with Joris Lammers (University of Cologne), Derek D. Rucker (Northwestern University) and Adam Galinsky (Columbia University) tested just that idea: as part of a session of individual mock interviews, we assigned business school applicants to one of three conditions. In the first condition, applicants wrote a short essay about a time they had power just before entering an interview. In the second condition, applicants also wrote an essay, but this time about a time they lacked power. Finally, the last group did not write anything.
Then, we asked interviewers the likelihood that they would accept the candidate into a business school. When candidates went straight to the interview, interviewers accepted 47.1 percent of the candidates. However, the admission rate went up to 68 percent for those people in the group who wrote an essay about a time they had power, and fell to a low 26 percent for those who wrote an essay about a time they lacked power. Importantly, interviewers were unaware of the power manipulation we had given candidates. Thus, merely recalling an experience of high power increased candidates’ likelihood to be admitted by 81 percent compared to baseline and by 162 percent compared to those who recalled an experience of powerlessness.
Of course, there are other ways to engineer personal feelings of power. For instance, candidates can wear objects that make them feel powerful, such as a watch or a particular bag - anything that links you with feelings of power.
2. “Behave powerful”
Power is not only a mindset; it is also a behaviour. Small, almost unconscious moves signal power to an audience and can significantly change the outcome of an interview. In her recent TED talk, Amy Cuddy (Harvard University) provides an excellent summary of how non-verbal language can have a profound effect on how people are judged in contexts as varied as hiring or promotion interviews, a sales context or even a date. As such, physical poses such as wrapping legs, hunching or relying on one’s arms are many subtle signals of powerlessness that cast doubt on what candidates say, regardless of the content of the conversation.
The Virtuous Circle of Power
Interestingly, adopting “power poses” does not only affect how interviewers judge candidates, but also ironically reinforces candidates’ feelings of power. In recent research, Li Huang from INSEAD and colleagues had participants take powerful (for example, expansive postures) or powerless (constricted postures) poses and found the former behaved more powerfully than the latter, by taking action more often and thinking more abstractly, two well-known consequences of power. So, behaving in a powerful way is not only important for how interviewers perceive candidates, it is also a key driver of how candidates will behave!
No matter where I go to teach negotiation strategies and tactics, people tell me they feel as if they're bargaining from a position of weakness. You'd think the lawyers at Intel, Qwest Communications, Warner Brothers and Sony Pictures Entertainment or the engineers and managers at Kraft Foods, all of whose people I've trained, would drape themselves in the power of their corporate brand.
Not so. More than 80% raise their hands when I ask them whether they're negotiating from a position of weakness.
That, I suppose, is because I haven't trained those companies' CEO's, GCs or Boards of Directors. But even then I'll bet I could flip a coin on their answer to the question. The Boards of Directors, after all, have to answer to shareholders and federal governmental agencies. CEOs must answer to their Boards and GCs to the CEO. Sometimes all of them feel intimidated by the lady in HR because Human Resources is the hot nuclear core of conflict in the organization.
What, then, can we do to increase others' perceptions that we have power, a perception that is more than half of our bargaining strength.
A survey released today by Citi and LinkedIn in conjunction with Citi’s Connect Professional Women’s Network on LinkedIn finds that one of women’s biggest obstacles to career satisfaction may be themselves – only 1 in 4 professional women have asked for a raise in the past year, yet of those who asked, 75% received a salary increase.
On the heels of Sheryl Sandberg’s Lean In, the survey also investigates whether women are really pulling back from leadership positions and if so, why? When asked if they could see themselves rising to a leadership position at their current employer, only 38% of women polled said yes, citing lack of opportunity, time and loyalty to their companies as the top three reasons why they’re not planning to advance.
Corporate profits have been soaring for some time now. What/who is the engine of those profits?
You, the American worker, are!
That means you deserve a raise. Have you gotten one lately? Not according to most sources.
We routinely help women negotiate raises between 15 and 30%.
Our success reflects the undeniable fact that our clients deserve these raises but haven't been getting them. We're not rocket scientists but we do know how to assess and then help you negotiate your true market value.
I scored BIG when I hired Victoria Pynchon. She helped me successfully negotiate a job promotion, 40+% raise, and new title -- all at my current employer. And this was during a recession! Vickie benchmarked salaries for me, realistically evaluated my options, helped me understand the motives and pressure of my employer, and advised me at every step of the way throughout the negotiations. And she guided me in developing a long-term strategic plan for my career.
Stock markets and corporate profits are breaking records. The economy suddenly looks brighter after the government's surprising report Friday that employers added 635,000 jobs the past three months.
"Hourly wages ticked up 4 cents in April to an average $23.87, rising at about the same tepid 2% annual pace since the recovery began in mid-2009.
But taking inflation into account, they're virtually flat. Workers who rely on paychecks for their income have been running in place, financially speaking. Adjusting for inflation, an average worker who was paid $49,650 at the end of 2009 is making about $545 less now and that's before taxes and deductions.
According to this month's Harpers, "even among the well-educated, the fear of unemployment deters workers from demanding wage hikes, particularly when joblessness is pervasive."
Let's not let the spectre of unemployment, or permit the unsupported corporate excuse of "the recession" deter us from reaping some small portion of the benefit that has flowed to the top of the American economic ladder in the past few years.
As one of those mega-negotiation training firms that advertises in airplane magazines says, "you don't get what you deserve; you get what you negotiate."
Find us and call us at She Negotiates and let us help you negotiate what you deserve.
Despite our focus on closing the gender wage gap, we serve men as well as women because a rising tide raises all ships.
3. The law (and your lawyer) only care about relevant facts - the most important part of your dispute may well not even be addressed, let alone resolved, by a jury verdict in your favor.
4. As your trial date nears, everyone - the judge, your lawyer, their lawyer, your spouse, your friends, and random acquaintances will urge you to negotiate a resolution with a neutral third party (a mediator).
5. Your attorney settles 90% of every case s/he litigates. S/he rarely goes to trial anymore. Ask her about the last verdict she won and then the one before that. If you have a skill (piano, golf, cooking a souffle) ask yourself how well you'd perform if you haven't used that skill recently or often.
6. Litigation is an extremely expensive board game, much of which is simply the cat and mouse exercise of discovery. Here's how it's played. I ask for documents. You object. I write you a letter demanding compliance. You write back refusing to comply and reminding me I have to "meet and confer" with you before we ask the discovery referee to intervene. We meet. We accomplish nothing. I make a motion (write a "brief") to compel you to turn over documents. You write an opposition. I write a reply. We pay the discovery referee to read our papers and listen to our oral argument. The discovery referee splits the baby in half or fourths or tenths. One of us asks the Judge not to sign off on the discovery referee's decision. More papers, more writing, more time, more of your money. The Judge, not a lion of courage, splits the baby again and refuses to award either party the costs of forcing compliance. Two months later (at least six have now elapsed) you get a stack of documents and a privilege log listing the documents that aren't being provided. I write you a letter demanding that you turn over documents on the privilege log. Rinse. Repeat.
7. As if the disrespect of the original dispute were not enough, I now get to sit you down in a conference room with a court reporter and spend a day or two asking you questions you don't want to answer. Often, the questions are asked in a disrespectful manner. When you complain to your attorney, he says "that's just the way the game is played." Focus on the word game. Are you having fun yet?
8. You get a bill for legal services rendered every month but you're no closer to resolution after receiving and paying 12 of these than you were on day one.
9. You're a business person. You negotiate business deals every day. Your lawyer does not.
10. You have given away any power you might once have possessed to resolve this dispute to a lawyer who does not understand your business, your life or the facts that drove you to seek legal advice in the first place.
Had enough? There are people out there - mediators - who are specially trained in helping you first communicate with your attorney and then helping you negotiate the resolution of your dispute with the "other side." Choose carefully. There are as many bad mediators there as there are litigators. My best advice? Negotiate the resolution of the dispute yourself even if it requires you to swallow your pride and to be the first one to say, "let's sit down and figure out how best to serve your interests and mine at the same time."
I asked Javits to first suggest an optimal negotiation strategy where one party – here, the GOP – is willing to risk catastrophe in the hope (or fervent belief) that the small government revolution they seek will be worth the short term damage to the economy if the debt ceiling is not raised. Javits surprised me by mentioning the history of the rise of communism in Russia.
Explaining why our bargaining partners should do what we want them to do requires persuasion — a compelling account of our business requirements and capabilities — along with any other reasons we can gin up to prove that what we want is fair and reasonable.
As sociologist Charles Tilly explained in his book, Why? we fail to persuade when we’re talking past each other and we talk past each other when we’re using a type of reasoning different from that of our bargaining partner. I first heard of Tilly’s work from that great popularizer of social science research, Malcolm Gladwell (Here’s Why) after which I never argued my case or negotiated a deal in the same way again.
But First, Why Reason Giving is a Critical Negotiation Skill
In experiments on reason giving, researchers have found that we are far more likely to persuade people to accommodate us if we give them a reason to do so even if the reason makes no sense whatsoever. In one experiment, students were asked to cut in line at Kinkos. One group was instructed to give no reason. Another was told to give a good reason (I’m late for class). The last was directed to give an irrational reason (because I want to).
A mistake that lawyers sometimes make is failing to ask for what they want. If they do want an evaluation they can ask for it when they hire the neutral. There are processes variously known as neutral evaluation, non-binding arbitration, or early case assessment which are designed specifically for this purpose. They can be used independently or they can be combined with mediation.
I was once hired to give a neutral evaluation in a commercial real estate case. The parties told me at the outset that while they were interested in exploring settlement they were really interested in my opinion on the merits. So we conducted a mediation that included a neutral evaluation. Not only did this meet their needs, the evaluation was given in a confidential setting and could not be used as evidence if they did not settle.
The point is that both parties wanted the process to be evaluative. It was not a situation where one party was expecting the mediator to be evaluative and the other party wanted the mediator to refrain from doing so.
When parties hire a mediator, they need to be of the same mind about the process. Otherwise the result will be like splitting a steak with your partner when one of you likes it rare and the other likes it well done. Somebody is going to get indigestion!
In business and in life, it's important to strike a smart balance between naïveté and cynicism. Act too naïvely, and someone is bound to take advantage of you. Skew cynical, and you may miss out on new opportunities with good people. This paper discusses the decision errors inherent in leaning too far in either direction. Research was conducted by Chia-Jung Tsay, Lisa. L. Shu, and Max H. Bazerman of Harvard Business School. Key concepts include:
Naïveté is more than a glut of trust. More broadly, naïve behavior refers to a failure to make the best decision, due to a lack of consideration of other people's strategic and behavioral perspectives. We are likely to make naïve decisions when we don't think through the likely future decisions of other parties. A cynic, on the other hand, may avoid a business transaction due to an assumption that the seller's self-interested motives will be harmful to him or her-even if logic shows that the deal would likely benefit both parties. When people withhold from trusting others, they usually lack opportunities to learn whether their trust would have reaped rewards. But when they offer their trust and are subsequently burned, they learn hard lessons about trust. This unbalanced feedback breeds cynicism.
In laboratory studies, the best negotiators were those who had a tendency to think about the perspectives of others. However, most people lack sufficient perspective-taking ability. The researchers suggest that training mechanisms should be developed to increase that ability.
Full working paper available for download at the link above.
Much of the complex commercial litigation that I mediate requires that businesses be valued. Although we litigators tend to hire experts to do the dirty work we went to law school to avoid (math!!) we do need to understand our own consultants' valuations as well as those of our adversaries in order to perfect our strategy and prevail at trial.
The valuation of forecasted cash flows can be an inaccurate process, especially when the forecasts are created by optimists who neglect to consider worst-case scenarios. In this paper, Harvard Business School professor Richard S. Ruback has developed methods of valuating forecasted cash flow when the predictions are biased upward. Key concepts include:
Managers often recognize that their cash flow forecasts are too optimistic and boost their discount rates to account for that bias. But that only works if the optimism masks a potential permanent downside.
The common practice of increasing the discount rate to account for optimistic cash flow forecasts can lead to significant valuation errors that increase with the length of the project, the cost of the capital, and the chance of a downside.
When the optimistic cash flow forecasts omit a temporary downside, valuators should adjust the forecast by deflating it and then setting the discount rate equal to the cost of the capital. In other words, the common heuristic of boosting the discount rate to account for optimistic cash flow can lead to a substantial valuation error when the omitted downside isn't permanent.
When the optimistic cash flow forecasts omit a potential permanent downside so that, if it occurs, there is no chance of recovery, valuators should deflate the cash flow forecast and increase the discount rate so that it includes the cost of capital as well as the probability of a downside.
As I left for work one crisp, sunny April morning, I spotted a five-by-seven printed form on my car’s front windshield. The form’s message proclaimed, in large, bold letters, “youparklikeanasshole.” The form had a checklist of infractions like “two spots, one car,” “that’s a compact?” and “over the painted lines.”The bottom of the printed form said,
Parking is far too limited in our overcrowded streets and parking lots, and you happened to park like an asshole. Go to the above web site to see why someone else thought you parked like an asshole. Don’t be too offended, we all do it one time or another—it just so happens you got caught.
My next-door neighbor, who evidently put the note on my car, listed my infraction as “other” with a follow-up explanation written by hand: “You are parking too close to my garage. It’s hard for me to pull my truck in.” I studied the note for a few moments. I felt my heart start to pound and my whole body became uncomfortably warm. I wadded the note and tossed it. I was angry. When I arrived at work twenty minutes later, I was still angry. I told my co-workers about the note.
They all agreed with me; it was rude and inappropriate.
When I returned home that evening, I visited with neighbors who were not complaining about my parking. I showed them the note, now crumpled and dirty. They, too, became angry. One neighbor suggested exacting revenge on the note’s author by letting the air out of his tires. Another neighbor excitedly suggested something involving Crisco. Although I am a trained mediator, I became giddy about the prospect of getting even.
Perhaps it was a moment of self reflection that led me to question why I was even thinking of revenge. But that written demand evoked intense emotions in me and in my neighbors. We did not care about investigating appropriate responses or attempting to resolve the problem; we wanted to make my neighbor pay for his rude behavior. Instead of encouraging me to change my behavior in the way my neighbor requested, the note had an entirely different effect. The written demand prompted me to make my neighbor regret placing that note on my windshield.
This incident led me to question the legal demand letters lawyers write. I wondered if demand letters often evoke similar negative emotional reactions in their recipients. And, if so, do those emotions influence the recipients’ behaviors in ways that hinder settlement?
I'll be providing a template for a negotiation request letter later today.
And all kidding aside, this article should be required reading for every legal writing class in every law school in the country!
I have to tell you that I believe every one of our She Negotiates graduates understands and knows how to use the bullet point takeaways from Extreme Negotiations below. Let me also say it's not enough to read about these techniques ~ you must practice practice practice practice.
Get the Big Picture
avoid assuming you have all the facts
avoid assuming the other side is biased but you're not
avoid assuming the other side's motivations and intentions are obvious and nefarious
instead, be curious ("help me understand"); humble ("what do I do wrong?") and open-minded ("is there another way to explain this?")
Uncover and Collaborate
avoid making open-ended offers ("what do you want")
avoid making unilateral offers ("I'd be willing to . . . "
avoid simply agreeing to or refusing the other side's demands
instead ask "why is that important to you?"
proposed solutions for critique ("here's a possibility - what might be wrong with it?")
UNCOUPLE YOUR PRESENT VALUE FROM WHAT YOU MADE LAST YEAR
your present compensation serves as a powerful anchor of your value to your employer's advantage
the following suggestions are a way of re-anchoring that value so that your starting point is greater than what you made this year
recalibrate your value according to what you are worth in your employer's hands, i.e., what does your employer save or make based upon the work you do (this may require research on your part)
use that value in setting your desired compensation (also include the cost to your employer of replacing irreplaceable you)
ASK DIAGNOSTIC QUESTIONS
begin asking your employer and superiors diagnostic questions (questions designed to learn what your employer needs, desires and prefers and what your employer is most concerned about in regard to the continued profitability of his/her business)
"how's business" is a great open ended diagnostic question that does not assume the answer
more specific questions include "what does the company need to accomplish in the first quarter of 2011 to meet its financial goals?"; "what are the company's first quarter financial goals?" "what do you see as the primary obstacles to achieving those goals?" "what do you see as the primary drivers of success in reaching those goals" etc. etc.
don't ask these questions impromptu; write them down as a way of brainstorming the most powerful questions and those that would be easiest to ask
2009 Total Compensation: $21,340,547
Whhaaaaaatttttt? do these men have that you don't have?
Social networks with rich and powerful people who sit on their Boards of Directors and influence policy makers and Wall Street power brokers
The self-created illusion that they are "too big to fail" /1
The persuasive argument that only they, with their unique combination of experience, education, knowledge, savvy, can-do-spirit, and leadership qualities can pull these banks out of the sinkhole of the recession.
Friends in very high places.
Chutzpah and shamelessness (not that we'd want to encourage this second character flaw in our readers).
An employment history of asking for and receiving increasing levels of compensation based upon their salary negotiations at every career point possible (and every career point impossible)
the demonstrated ability to produce results (our readers do possess this strength but haven't used it to their greatest advantage yet)
the tendency to measure their market value by their value in the hands of their employer, not by what they "need" or what they are "worth" according to some internal metric that depends upon how they feel about thier accomplishments.
1/ This is where collective action comes in. When we aggregate together America's employees, small business owners and homeowners, we get a non-corporate "entity" that is waaaayyyyyy bigger than some little piss-ant bank and it is we who are too big to fail.
Architect David Denton spends much of his time on a lush tropical island, where he experiments with cutting-edge building designs and creates spaces for artists to showcase their work.
Never mind that the island only exists in the virtual-reality world of Second Life, a popular online venue where people interact via digital avatars. Denton, 62, said he purchased the island for about $700 — real money, not virtual cash — from its former owner, and considers it his property.
Here's the thought this article triggers. If 90% of all litigation involving people (I'll skip corporate litigation and litigation brought to vindicate rights such as that declaring Prop 8 unconstitutional) will end with a retired Judge telling the people that litigation is too expensive and a jury trial too uncertain for them to bear, why don't we just litigate virtually (with Linden dollars!) giving the parties the experience of litigation that will eventually drive them to settlement?
I'm sure some smart programmer can come up with an algorithm for most personal disputes, including both factual templates and the application of simple legal principles. A "ticker" could keep track of the dollars your virtual attorney is billing on your law suit's screen everyday. Continuances, discovery motions, pre-trial proceedings and depositions could all be simulated.
Then the parties return from the virtual life of Second Life Litigation and sit down in the old fashioned way to negotiate a resolution to their dispute or, if necessary, hire a village elder trained in conflict resolution, sometimes called a mediator, to help them do so.
I asked one of my consulting clients for a testimonial yesterday.
"Anything," she said, "it's genuinely changed the way I do everything. It's not just the shift in my business relationship with [BigBiz, Inc.]. I dumped a boyfriend last week because of our conversations! So, seriously, what would you like me to say?"
My client and I, like the few women commercial litigation clients I had during my twenty-five years as a lawyer (2%?) were quickly becoming friends. And I was proud of her. Truly proud. Like a parent would be.
"I'm proud of you," I finally said, even though I'd been thinking it for weeks. "You've shifted the power in your working relationship and that was difficult to do. You were persistent. You're a first class learner. And you've been brave."
She laughed, the way we women do when we're praised, wanting the moment to pass instead of savoring it a little, particularly when we know deep down we've genuinely achieved something important in our own lives and careers but don't want to appear self-satisfied.
So I said it again. "I'm really proud of you. You've done great work and you never gave up. You didn't fold to the power of BigBiz, Inc. You stood up for yourself."
In Workplace Negotiating Secrets From Bethenny's Shrink over at Forbes.com, Xavier Amador, the therapist on Bethany Getting Married? gives his "secrets" for "winning" workplace arguments. What Amador suggests (below and at the link) is really just collaborative interest-based negotiation, but his catchy acronym - LEAP - is a good one to remember for all negotiations, whether you're brokering peace in the Middle East or getting your guy to put the toilet seat down. If you read the article, and I highly recommend doing so, you'll see that no one is "winning" any "argument." Rather, people are finding ways to accomodate all of their needs simultaneously.
Amador, 50, uses many of the same methods with both individuals and corporate clients. His book I'm Right, You're Wrong, Now What?, lays out a strategy he calls LEAP, for listen, empathize, agree, partner. It applies to salary negotiations, to disagreements with partners or colleagues or underlings and even to challenging sales assignments.
An acronym enthusiast ("acronyms help me to remember"), Amador says the first step is "L," for listen. That may sound simple, but often it's very hard. In sales, for instance. Before he became a psychologist, Amador worked for an Arizona company that sold solar heating. Rather than simply trying to push his product, he found he got further if he patiently listened to his potential clients' objections.
More important than her religious background (Jewish) her Ivy League Credentials (Harvard) her progressive, liberal or conservative Democrat political leanings, is the prospect that Kagan's addition to the Supreme Court will result in the magic number of three women on the United States Supreme Court.
We’re celebrating Mothers Day by posting Blawg Review #263 at the She Negotiates Blogfor one obvious and some not so obvious reasons. The obvious reason is the word “She.” The not-so-obvious reasons are: (1) Mother’s Day was a peace and reconciliation movement before it was a holiday; and, (2) peace exists only when we have the political will to seek and the negotiation tools achieve the resolution of conflict.
Today I stumbled over the post Women Deal with Conflict Differently than Men, reporting on a study done by the Program on Negotiation at Harvard in 2008. Results of the study showed the following similarities between men and women including:
Integrating, the ability to meet the needs of both parties; and,
Compromising as a strategy, except women showed a "high level of agreement that every issue has room for negotiation"
The differences included:
women's tendency to choose equal distributions when compromising which the researchers apparently ascribed to women's greater concern with fairness;
competitiveness - with men scoring 25% more competitive than their female counterparts
"smoothing," with women engaging in that behavior 20% more of the time than men - smoothing being defined as "giving in to the other party while ignoring one's own needs"
avoiding or withdrawing with women doing so 30% more than men
expressing feeling, with women apparently doing so "more" than men but no percentages are provided
We'll be working with gender differences through the end of the month of March and will likely discuss this data in more detail later.
I'm sure you've noticed that we're celebrating negotiating women here this month in honor of International Women's Day and National Women's History Month. Other than tomorrow night's free negotiating women teleseminar with super coach Lisa Gates, I'm celebrating by posting in one place all of my articles on negotiating women.
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...
Practicing law, particularly litigation, is often frustrating, sometimes humiliating, and frequently simply dispiriting. On the other hand, the practice of law can be thrilling, intellectually stimulating, challenging, absorbing, and a darn good way to make a good living. When you...
(Right, women protesting, 1912. My own grandmother was 12 years old at the time this photo was taken. By the time she was old enough to vote in 1921, she could vote) Why women's voting rights and Hillary Clinton's DNC...
If you're a certain age, you'll remember women's magazines as mostly "Can This Marriage Be Saved" (The Ladies Home Journal to which PWNSC members Cathy Scott's and Cordelia Mendoza's mother was always submitting articles) or 101 Things to do with...
Yesterday, we talked about the different negotiation styles of men and women. Today, we're going to explore how men can benefit from learning women-speak and women can benefit from learning man-talk. All of the data relied upon and excerpted below...
Although I am indisputably a "woman lawyer," I have never thought of myself in those terms. I'm a lawyer. And I'm a woman. I'm also a writer, a step-mother, a wife, a daughter, a river rafter, and an aficionado of...
(and, yes, I am not only old enough to remember the "Second Wave" Women's Movement, I took a quite serious role in it, first as an unpaid volunteer and later through the federal government's "Program for Local Service" at...
Thanks again to Vicki Flaugher of SmartWomanGuides.com for inviting me to have this conversation with her about ways in which women can and do maximize their bargaining power. And yes we do talk about negotiating the purchase of an automobile...
In part two of Vicki Flaugher's interview with me, we discuss ways in which women can comfortably respond to aggressive zero-sum distributive bargainers and negotiate better business deals using their natural strengths. I'd like to once again thank Vicki Flaugher...
Video below is part I of an interview on negotiation challenges, strategies and tactics for women with Vicki Flaugher, founder of SmartWoman Guides. The full audio of the video is here along with Ms. Flaugher's kind comments about our conversation....
How to Negotiate Anything: Free Intro Thursday, Mar 18, '10 8pm EST Some researchers say that women's failure to negotiate working conditions, salary or other compensation--along with their hesitancy to seek what they're worth when they do negotiate--is one of...
Whereas American women of every race, class, and ethnic background have made historic contributions to the growth and strength of our Nation in countless recorded and unrecorded ways; Whereas American women have played and continue to play a critical...
When I posted Negotiating Gender: Why So Few Women Neutrals? I had not yet found a source for the statistical representation of women neutrals on the American Arbitration Association Panel. I've now located an article on the AAA website from...
Although most of the major providers of alternative dispute resolution services tout their commitment to diversity in the ranks of their neutrals, the coloration of nearly all ADR panels continues to be white; the nationalities European; and the gender male....
Thanks to Ed. at Blawg Review for passing along this (somewhat rambling but well worth watching) lecture at Stanford University by Deborah Kolb, the Deloitte Ellen Gabriel Professor for Women and Leadership at the Simmons College School of Management....
Yes, Virginia, lawyers do "win" mediated settlement negotiations every work day. They do so by:
their reputation for success at trial;
their ability to choose the right moment to first discuss settlement;
their ability to "control" their team and their client ("control" being a legal term for good client relations arising from top notch client communication skills);
their negotiation skill set - both in terms of long-term strategy and "at the table" tactics;
their persuasive skill set - both with opposing counsel and with the mediator;
their ability to conduct a risk-benefit analysis that approximates the true likelihood of their probable success at trial;
their determination to make aggressive but reasonable first offers;
their possession of and willingness to stick to a set of flexible "bottom lines" that give them sufficient room to "horse trade" and "hang the meat low enough for the dog to smell it;
their ability to bring the right people to the table at the right time; and,
their ability to walk away without dramatics if the other side is unwilling to negotiate in the realm of reality.
Some of these skills are in all litigators' arsenals. Where most litigators are the weakest is in the negotiation of settlements. I know it not only because it was my greatest area of weakness ("I'm paid to win not to settle") but because I see it evidenced in mediation when attorneys bargain half the day away in the useless strato- and nano-spheres.
Here are two new resources you should have at hand every working day. "Having blog resources at hand," by the way, means having a google or other news reader to send you RSS feeds.
Decision Tree Analysis - the Decision Tree Analysis Blog by PaperChace. There's a ten-day free trial of PaperChace's decision tree analysis software for mediators, a free trial I'll take advantage of once the $^%@# book is finished (any day now, really). Laywers love numbers in the way only people who don't understand them can. I've had cases settle promptly as soon as everyone has put themselves to the task of making numeric estimates of their chances of success on the merits at any given stage of the litigation. For making the uncertain certain and depressing overly optimistic client expectations there's nothing quite like numbers. Do check it out.
There's another mediation blog to read as well, but not simply "yet another" blog by yet another mediator. This is Lee Jay Berman, one of the best and busiest mediators in town, the teacher of thousands in Pepperdine's internationally known and respected "Mediating the Litigated Case" and President of his own mediation think-tank and training station - the American Institute of Mediation.
The blog, Eye on Conflict, will deliver to you free of charge the wisdom, education and training you'd otherwise pay thousands of dollars for. Listen, I spent two full years at the Straus Institute earning my LL.M in dispute resolution and every time I talk to Lee Jay he tells me something that improves my ability to help lawyers negotiate settlement 100%. Today Lee Jay mourns the passing of a giant in our field - Richard Millen. As you read Lee Jay's tribute, you come to understand just how deeply embedded he and his vision are in mediation theory and practice in Southern California.
Put these two dynamite resources in your news reader and be as good a settlement negotiator as you are a litigator and trial attorney.
Thanks Roger! This didn't just make my day; it made my year!
Plaintiff’s Motion to Compel Acceptance of Lunch Invitation
The Court has rarely seen a motion with more merit. The motion will be granted.
The Court has searched in vain in the Arizona Rules of Civil Procedure and cases, as well as the leading treatises on federal and Arizona procedure, to find specific support for Plaintiff’s motion. Finding none, the Court concludes that motions of this type are so clearly within the inherent powers of the Court and have been so routinely granted that they are non-controversial and require no precedential support.
The writers support the concept. Conversation has been called “the socializing instrument par excellence” (Jose Ortega y Gasset, Invertebrate Spain) and “one of the greatest pleasures in life” (Somerset Maugham, The Moon and Sixpence). John Dryden referred to“Sweet discourse, the banquet of the mind” (The Flower and the Leaf).
Plaintiff’s counsel extended a lunch invitation to Defendant’s counsel “to have a discussion regarding discovery and other matters.” Plaintiff’s counsel offered to “pay for lunch.” Defendant’s counsel failed to respond until the motion was filed.
Defendant’s counsel distrusts Plaintiff’s counsel’s motives and fears that Plaintiff’s counsel’s purpose is to persuade Defendant’s counsel of the lack of merit in the defense case.
The Court has no doubt of Defendant’s counsel’s ability to withstand Plaintiff’s counsel’s blandishments and to respond sally for sally and barb for barb. Defendant’s counsel now makes what may be an illusory acceptance of Plaintiff’s counsel’s invitation by saying, “We would love to have lunch at Ruth’s Chris with/on . . .” Plaintiff’s counsel. 1
1 Everyone knows that Ruth’s Chris, while open for dinner, is not open for lunch. This is a matter of which the Court may take judicial notice.
Read on by clicking on the .pdf above.
And how could I resist adding the "will you go to lunch!" scene from David Mamet's Glengarry Glen Ross.
If you're following this blog but not Diane Levin's Blog The Mediation Channel, I have good news for you. Diane is an extremely focused, disciplined and lively writer. She's also one of the brightest and most canny negotiators, mediators and negotiation trainers I know.
With the goal of promoting clearheaded and reasoned debate and improving discourse, each month I skewer a different fallacy.
Before giving you entree to this excellent series, let me first note that these arguments do not justify any movement in your negotiation position. Remember - you need a new number and a new reason to counter that new number. If your mediator or negotiating partner expects you to give up something, he'd better have a darn good reason for you to do so. If you're a lawyer representing a party, you can feel your client figuratively or literally tugging on your sleeve when you offer more or agree to accept less in the absence of a justification that makes business sense.
The Misleading Ellipsis (to which I add this caution ~~> the quickest path from respected advocate to deceitful scoundrel is the misleading ellipsis - Judge, Arbitrator, Mediator and Opponent will all distrust your bona fides from that date forward; if you can't think of a better argument, fall on your sword on this issue and create a better one just over the next hill).
Diane adds one new fallacious argument every month. I'll endeavor to keep up with her. But more reliably, get her RSS feed, add it to your google reader and never again be without the wisdom of this brilliant mediator and negotiation trainer and consultant. That's her smiling face at top. Visit her often! at The Mediation Channel.
Conflict is in the house. The evil fairy surrounded the castle with deadly thorns. The "good" fairy put everyone in the castle to sleep. Will you be the valiant Prince in your own dispute story? Or are you the prize? The beautiful one who would prefer to remain unconscious rather than address the great battle between good and evil represented here? Did you hire a lawyer to resolve your dispute for you? Will he make it to the castle in time? Or will he spend the bulk of his energy erecting more obstacles to prevent your adversary from reaching you. By the time both champions reach the castle, will everyone be too bloodied and broke to rise from your bed and put your house back in order?
The not so secret opinion among mediators is that attorneys make settlement more difficult. Just as lawyers are heard to say that "litigation would be great if it just weren't for the clients" (a "problem" only class action plaintiffs' lawyers have actually resolved), mediators tend to say "mediation would great if it weren't for the lawyers."
Esteeming the rule of law in America as I do (especially in the recent era of its greatest peril) I have never seen lawyers as a problem in facilitating settlement of the lawsuits they have been eating, drinking, sleeping and, dating for years longer than I've spent reading their briefs and engaging in some pre-mediation telephone discussions.
I can't say lawyers are a problem because: (1) they're my job; and, (2) they're "my people" in the "tribal" sense. A few bad apples aside, lawyers are among the hardest working, most ethical, creative, multi-talented professionals I know. And they are pretty much solely responsible for fighting the battle, on every common weekday, to preserve the rule of law as a bulwark against tyranny on the right and anarchy on the left.
Let's start with this particularly widespread canard from the article:
Attorneys may delay the settlement of a dispute through mediation for financial reasons. For example, the payment of professional fees on the basis of hours worked could motivate the attorney to delay the settlement of the dispute to increase the number of hours billed to the client (citations omitted). Such non financial reasons as a desire to build or preserve a reputation for “hardball negotiating” in highly publicized cases could also motivate an attorney to delay settlement of the dispute [which the authors don't mention often results in a far better outcome for the client]. In addition, attorneys’ (or their clients’) commitment to or belief in their case based on questions of justice or other principles [which are worth, in my opinion, greater attention that purely monetary outcomes] could also delay settlement until “defending the principle becomes too costly” (citation omitted). Finally, attorneys may wish to justify both their role and their fees with unnecessary interactions./1
Are we mendacious, self-serving, parasites of the "justice system," feathering our own comfortable nests as we attempt to preserve the "outdated" notion that the justice system is capable of delivering justice? I don't believe so, but let's not get all anecdotal about these questions when we have cold, hard statistics within reach. What were the results of this study on the way in which attorneys might "get in the way of" a successful mediation?
Here's the bottom line assessment (please read the article yourself to draw your own conclusions).
The empirical data we collected in this study indicate that the presence of an attorney in a mediation does not significantly affect the settlement rate, the time needed to reach an agreement, the perceived fairness of the process, the parties’ level of satisfaction with the agreement, or the parties’ level of trust that the agreement will be honored. These results indicate that attorneys have much less impact than is claimed by those mediators who do not welcome their involvement in the mediation process.
Nevertheless, the results also demonstrate that the presence of an attorney does affect mediation outcomes in at least two ways: by reducing the parties’ level of satisfaction with the mediator’s performance and by reducing the level of reconciliation between parties.
So the Myth Busters of this study conclude that attorneys:
don't "significantly affect the settlement rate" /2
don't significantly affect "the perceived fairness of the process";
don't significantly affect "the parties' level of satisfaction with the agreement; and,
don't significantly affect the "parties' level of trust that the agreement will be honored."
This is the subjective viewpoint of the litigants, mind you, in a dynamic where the mediator often openly attributes the success of the mediation to the clients' attorney - an observation which is more deeply true than most mediators would care to admit with all their white horse hi-ho silver, magic bullet off-to the-rescue enthusiasm.
What did litigants report to the authors of this article? They indicated that attorneys adversely affected mediation outcomes in two ways: (1) they reduced the parties' "level of satisfaction with the mediator's performance"; and, (2) they "reduced the level of reconciliation between the parties."
Of all of the purported effects of attorneys' presence at mediation - without whom, it must be noted, the parties would not likely be induced to sit down and mediate at all -- the only significant perceived difference is the failure of the mediation process to reconcile the parties - something in which the legal system has little to no interest.
Please read the article for proposed solutions to the reconciliation issue. As to the remainder of the study's findings, I have this to say:
whenever two or more people are gathered together, the dynamics of the group more profoundly affect the outcome than do the contributions of any individual member of the group. Our "reality," especially as it appears in a group setting, is "co-created." See the New York Times must-read article on the Psychology of Terrorism and Retail Marketing at Google Books (the latter noting that because people live in a social world which is co-created in social interaction with others . . . . [they] can be thought of as both products and producers of the social world." Id. at 218.)
try as you may, you will never be able to untangle the threads that create the intricate tapestry of a settlement; every member contributes something invaluable without which the precise result could not possibly have been achieved.
who is therefore responsible for the good and who responsible for the purportedly bad results of mediation? That's easy: EVERYONE IS.
That being the case, we are all responsible for our outcomes - whether our contribution is "negative," i.e., resisting settlement, for instance, or "positive," i.e., problem solving the reasons given by Mr. Negative that the case simply can't settle on terms acceptable to all. Remember your University philosophy class? Thesis, Antithesis, Synthesis. We need people willing to state the negative to problem solve it positively. The relationships cause the outcome, not one member of a group unless that member is a tyrant with loyal troops at his command.
If you'll allow me a literary reference that justifies my own collegiate career and says far more eloquently than I ever could why we're all accountable, I first give you one of my favorite authors, Paul Auster (who you may remember as the screenwriter of the movie Smoke).
The world can never be assumed to exist. It comes into being only in the act of moving towards it. Ese est percipii. Nothing can be taken for granted: we do not find ourselves in the midst of an already established world, we do not, as if by preordained birthright, automatically take possession of our surroundings. Each moment,each thing, must be earned, wrested away from the confusion of inert matter, by a steadiness of gaze, a purity of perception so intense that the effort, in itself, takes on the value of a religious act. The slate has been wiped clean. It is up to [us] to write [our] own book.Paul Auster,The Decisive MomentfromThe Art of Hunger.
The second excerpt I will leave for your thoughtful consideration is by the greatest scholar of comparative religions to ever inhabit the planet - Joseph Campbell (skip the intro with the new age music).
Schopenhauer, in his splendid essay called "On an Apparent Intention in the Fate of the Individual," points out that when you reach an advanced age and look back over your lifetime, it can seem to have had a consistent order and plan, as though composed by some novelist. Events that when they occurred had seemed accidental and of little moment turn out to have been indispensable factors in the composition of a consistent plot. So who composed that plot? Schopenhauer suggests that just as your dreams are composed by an aspect of yourself of which your consciousness is unaware, so, too, your whole life is composed by the will within you. And just as people whom you will have met apparently by mere chance became leading agents in the structuring of your life, so, too, will you have served unknowingly as an agent, giving meaning to the lives of others, The whole thing gears together like one big symphony, with everything unconsciously structuring everything else. And Schopenhauer concludes that it is as though our lives were the features of the one great dream of a single dreamer in which all the dream characters dream, too; so that everything links to everything else, moved by the one will to life which is the universal will in nature.
It’s a magnificent idea – an idea that appears in India in the mythic image of the Net of Indra, which is a net of gems, where at every crossing of one thread over another there is a gem reflecting all the other reflective gems. Everything arises in mutual relation to everything else, so you can’t blame anybody for anything. It is even as though there were a single intention behind it all, which always makes some kind of sense, though none of us knows what the sense might be, or has lived the life that he quite intended.
Lawyers, mediators, clients, experts, consultants, legal assistants, and, yes, even your spouse with whom you consulted before today's mediation, every one of them is part of the "net of gems, where at every crossing of one thread over another there is a gem reflecting all the other reflective gems [so that] [e]verything arises in mutual relation to everything else, so you can't blame anybody for anything" and, by the way, we can't credit credit nor bear all the responsibility for anything. We are all capable. We are all accountable. And we all contribute something to the whole.
So we can stop pretending to be better than we are now. We can all put down the burden and shame of our own entirely human fallibility; the myth that we ever do anything without the contribution of others; and, the pretense that we don't behave as badly, or as well, as other people do. We're part of the team. We're in it together. Isn't that good news for the New Year?
And to give you a treat from having gotten this far, a scene that is all about seeing, from Paul Auster's Smoke.
1/ I'd be interested, of course, in what the authors consider to be "unnecessary interactions."
2/ This is a particularly interesting finding since mediators have also been found not to improve the settlement rate but only greater party satisfaction in several studies.
Don Philbin, the author of this must-read article (click on the image for the .pdf) on the reasons you walk away from negotiations fearing you've either left money on the table or paid too much for what you receive in exchange, is an attorney-mediator, negotiation consultant and trainer, and arbitrator.
Don is listed in The Best Lawyers in America (Dispute Resolution), The Best Lawyers in San Antonio, and the Bar Register of Preeminent Lawyers.
Don's ADR Toolbox where this article can also be found is an indispensable resource for all attorneys negotiating the settlement of a lawsuit or a business deal (wait a minute! the negotiation of a settlement is a business deal!)
And, it's not inconsequential that Don is one of the nicest guys I know. If you're going to spend a day or a week or a month with a mediator or an arbitrator, you deserve not only the brightest, most wise and best prepared arbitrator or mediator, you also deserve to have a little fun in the process because . . . you know . . . the money simply isn't worth the unhappiness that comes when dealing with . . . . the other sort too often.
Why does mediation work? For several reasons that I can think of [including] the flexibility to make a business decision. Commercial contractors and subcontractors are in a business, and they should be making business decisions. While one such decision can be to go to litigation; litigation is not always the best solution from a financial, or stress perspective. Construction professionals, with the assistance of construction attorneys, can come up with a creative way to deal with a problem and solve it.
Because Doug, Lee Jay and I spent the entire day yesterday talking about legal rights and remedies as well as legal procedure in the context of negotiating the resolution of litigation, I was once again engaged in the soul-searching that always accompanies situations challenging my loyalty to the adversarial/rights-remedies business and stimulates my enthusiasm for the interest-based, consensus building, collaborative, problem solving negotiated resolution business.
Before giving you an excerpt that should tempt you to download the article and put it on your nightstand, I want to say this: I work on the razor's edge of my lifetime career-investment in the adversarial system, on the one hand, and my new'ish passion for collaborative, interest-based negotiated resolutions to disputes, on the other. I spent 25 years as a warrior who rightfully took advantage of my adversary's weaknesses. I was not a problem solver. I was engaged in a fight to the death on a pre-determined field with rules in which I believed for causes I knew to be just. As a result, I approach all alternatives to the adversarial process with a litigator's skepticism, wariness and world-wearyness. There is no kumbya in me. It is only my intellectual curiosity that survived the beating my heart took from the world-weary, cynical, grizzled old defense attorneys who taught me how to practice law (as adversaries testing my mettle) in Sacramento thirty years ago.
Sic transit gloria mundi.
The engine that drives litigation's morality tale is that conflict resolution is a contest between parties, one of whom necessarily represents good and the other necessarily represents bad. As a result, litigation seeks to designate who has committed moral transgressions by breaching legal norms (or, from the perspective of the defendant, who wrongfully accuses others of having done so).
The Story of Mediation subverts these norms by transforming this familiar morality tale into a story of collaboration. This subversion begins through how mediation conceives of conflict itself. Implicit in the Story of Litigation is that conflict represents a breach of the norms of conduct, thereby ripping the social fabric in some way large or small. In contrast, in mediation, conflict is a norm of conduct, a necessary byproduct of humans having distinct experiences and personalities and needs. Conflict is thus not necessarily a disruption of the moral order, and, indeed, can sometimes be productive.
Mediation's normalization of conflict, however, cannot eliminate what appears to be a deep-seated human need to understand experience in terms of struggles and strivings. Humans have great difficulty perceiving events as generated by causes beyond our control - what Amsterdam and Bruner evocatively describe as an inability to see events as "One Damn Thing After Another." We must instead "shape them into strivings and adversities, contests and rewards, vanquishings and setbacks."
The meta-narrative of litigation maps these "strivings" and "vanquishings" onto the struggle of one party against another and enlists the aid of the court to vindicate justice on behalf of the wronged party. In contrast, the meta-narrative of mediation seeks to map these "strivings" and "vanquishings" onto a collaborative struggle to resolve conflict. This narrative casts all participants as players in a process - collaboration - that is focused on reaching the common goal of successfully resolving or transforming a dispute. This story has moral entailments because collaboration is accepted as a social and moral good. Unlike litigation, however, this story does not generate a binary moral universe that divides the good from the bad, but, rather, a universe that values collaborative striving to achieve common ground and resolution.
This story places mediators in a role that is very different from the role played by decision-makers in litigation. Rather than being heroes of moral vindication to whom wronged parties appeal for justice, mediators promote and model collaborative striving to overcome conflict. This plays out in many accepted techniques in mediation. Mediators, for example, often seek "commitment" from participants to the process of mediation, although mediators are careful not to extend this commitment to a commitment to agree. This commitment to process is a proxy for a commitment to collaborate to seek to resolve conflict, thus incrementally moving participants away from contested litigation and towards collaborative problem solving. Similarly, mediators often "reframe" participants' statements in order to emphasize "common ground." This is also an effort to move parties away from a morally charged contest and into collaboration. Finally, mediators encourage and model collaboration through a positive message of optimism and progress towards resolution, even when (or, perhaps, especially when) impasse appears likely.
Moreover, mediation approaches the narrative movement from Efforts to Restoration of Steady State in a very different way than litigation. Whether the Steady State is Restored or Transformed constitutes what I have earlier characterized as a "fork in the road" in the Austere Definition of Narrative. The very language through which litigants seek redress of grievances - to "be made whole," "to pay your debt society" (with its implication that payment of the debt would return the ledger to balance), even the word "remedy" - implies Restoration. In contrast, mediation tends to reject Restoration as a state to which the parties (and society as whole) should or even can return. Rather, mediation seeks Transformation on the part of all disputants so that conflict is resolved. It does so by embracing the notion that perceptions of the world (including perceptions of the actions of others) are unstable, thus enabling parties to appreciate alternative perspectives as a way to promote resolution of conflict. Mediation, therefore, does embody a plot that adheres to the narrative movement described by the Austere Definition, albeit in ways that are utterly alien to the morality tale of the story of litigation. The story of mediation can be characterized as follows:
Steady State: Whatever Each Party Views as Pre-Conflict
Trouble: Whatever Each Party Views as Constituting Conflict
Efforts: Collaborative Striving To Overcome Conflict as Modeled and Promoted by Mediator
Transformation of Steady State: A New Relationship Among Parties
I hereby agree to submit to binding arbitration all disputes and claims arising out of the submission of this application. I further agree, in the event that I am hired by the company, that all disputes that cannot be resolved by informal internal resolution which might arise out of my employment with the company, whether during or after that employment, will be submitted to binding arbitration. I agree that such arbitration shall be conducted under the rules of the American Arbitration Association. This application contains the entire agreement between the parties with regard to dispute resolution, and there are no other agreements as to dispute resolution, either oral or written.
This decision is made more interesting by the recent Parada decision (.pdf) (covered here and here) where the drafter's failure to attach the JAMS arbitration rules cited in the agreement was one of the reasons the Court concluded the arbitration clause was substantively unconscionable. I think it's safe to say at this point in the development of California law on these issues that it's not malpractice for an attorney to fail to draft an enforceable arbitration clause. But as the opinions multiply, you can be sure some employer will be looking around for someone to name its legal counsel as the source of his discontent, blame its law firm for having to bear the expense of litigation, and claim damages as a result.
The best protection for drafters of arbitration clauses (particularly in California where the Courts remain suspicious of adhesion arbitration contracts) is to be familiar with all the case law on the topic in the last five years; to avoid any provision the Courts have used to tip the "sliding scale" in favor of non-enforcement and include those provisions which favorably incline the courts to enforce the clauses.
Patrick Deane of Nestlé is senior counsel to the largest food company in the world, and the disputes he runs into involve distributors, retailers, suppliers and consumers in every part of the globe. His ideal mediator combines logic and intuition; a concern for detail; and the knack of an epatheic listener. He noted that commercial disputes — even financial ones — are seldom dry, but instead involve personalities, risk of loss of face, and other human attributes just as much as more personal claims do. The question of subject-matter expertise was of little importance to Deane, compared to these essential qualities in a mediator who must be expert in a process that, at heart, is aimed at cost effectiveness. “A lack of industry expertise has never caused a failure of the mediation process.
Here's my opinion (as if you didn't already know). As Colin Powell says, the most important knowledge to have in international negotiations is the other guy's decision cycle. I imagine the great predictor, the political scientist and Hoover Institute Fellow Bruce Bueno de Mesquitas would say something along the same lines (see TED lecture below). See also the NYT piece, Can Game Theory Predict When Iran Will Get the Bomb?
What is the "other guy's" decision cycle? It is comprised of every interest he must satisfy and every person he is accountable to for the foreseeable (and probable unintended) consequences of that decision. Personal injury attorneys turned mediators are well acquainted with the decision cycles of both Plaintiff and Defense counsel as well as with the interests, needs, and desires of injured Plaintiffs, on the one hand, and insurance adjusters and their supervisors on the other. Employment attorneys turned mediators are also deeply knowledgeable about the decision cycles of counsel on both sides of the table (one usually specializing in employees and the other in employers) as well as with the interests, needs and desires of terminated, demoted, or harassed employees on the one hand and of employers - both large and small - who often feel as if the Plaintiff is little better than a highway robber. Judges turned mediators are better acquainted than anyone else of the decision cycles of juries -- a jury verdict being the alternative to a negotiated resolution.
You knew I'd come to my own "specialty" knowledge. Some of it is industry specific -- insurance and financial institutions, for instance, and the garment, manufacturing, health care, commercial real estate, construction, and technology industries. Though my experience in these fields adds some value to my commercial mediation practice, what I'm most skilled at is knowing the decision cycles of commercial litigators and their business clients. I understand, for instance, the clients' reporting relationships; the metrics against which their performance and that of their corporate superiors are measured; the impact of SEC reporting requirements in "bet the company" litigation; and, the effect settlements in nine or ten figures might have on upcoming plans for mergers or acquisitions.
I can read a financial statement.
At a minimum, I can ask the questions necessary to obtain the knowledge required to ascertain the interests that must be satisfied by both parties to transform the litigation into an opportunity to make a business deal. And I know how to make the commercial clients happy with their attorneys' final resolution of the business problem burdened with the justice issue that brought the case into court in the first instance.
I am also schooled in the "field" of conflict resolution. I understand at depth the cognitive biases -- universal tendencies in the way we think -- that inhibit rational decision making. I know how conflict escalates and, more importantly, how it can be deescalated. I understand the role emotion plays in decision making (particularly the emotion most common among business litigation clients - anger); the gentle (and not so gentle) art of persuasion and, perhaps most importantly, the optimal negotiation strategies and tactics for the business problem at hand.
And, I know in the knuckles of my spine what keeps commercial litigators awake at night, worrying about the next strategic, tactical, legal or extra-legal move to make; how to explain to the client that the case has suddenly gone south; and, how to deliver that bad news to the client in a way he or she can hear it and successfully report it to the GC, the CEO, the Board of Directors or e ven the shareholders.
I know this sounds like a lot of boastful self-promotion (it is). Please don't take my word for it. Anyone charged with finding, retaining and hiring a mediator to assist the parties in resolving a piece of hard-fought, sophisticated, complex commercial litigation would do well to check with his or her peers on any mediator's boastful self-appraisals.
This is what I recall of mediator-hunting, however. I'd send out a list to my colleagues. I'd invariably get back opinions that were all over the board. He/she is great with clients but usually ends up splitting the baby in half. He/she talks too much and listens too little. He/she marginalized the client and made me look bad. He/she charges $15,000 per day and is one of the go-to mediators for this type of case but I was unimpressed, as was the client. This guy/gal can settle anything. Brilliant. Magical.
So what's a beleaguered litigator to do? Ask people you respect both inside and outside your law firm. Ask how the mediator handles the "process dimensions" of the mediation. Does he/she simply carry numbers and rationales back and forth between separate caucus rooms. Can she give bad news to both sides. Can he go beyond positional, zero-sum bargaining and into interest-based negotiated resolutions? Is the client happy with the result and with the process? After you've done this basic research, call the mediator yourself and ask him/her about the way in which she/he might handle the mediation of the particular matter you need to have resolved. You should not only have the best information possible in making your choice, you should get a fair amount of terrific free advice and external brain-storming along the way.
I really just meant to cite the Business Conflict Blog and get back to revising The ABC's of Conflict Resolution - my second draft due on October 30.
So what's my answer to the question whether the mediator should have industry knowledge? That answer lies, as most legal problems do, in the gray zone. Industry knowledge helps. But every commercial litigator knows that we can learn any industry if we have a basic understanding of how commercial enterprises work. That's what I know -- commercial litigation -- and it is the reason I don't mediate personal injury or employment disputes with anyone below the rank of senior executive. I don't know the right questions to ask and I don't know -- at depth -- the parties' or counsel's decision cycles.
My own personal 200-year present spans the life of my maternal grandparents who were nine years old in 1909, and that of my step-children’s children, who (assuming they procreate on a reasonable schedule) should be ninety-five'ish in 2109.
My imagined grandchildren,  born sometime between today and 2014, will not be strangers to any of my grandfather’s technologies. Despite the advent of compact fluorescent light bulbs, the early lives of my step-children's children will likely pass under the glow of the same incandescent lights that brightened granddad’s one-room school house. They will be transported to school in cars with internal combustion engines, learn the same alphabet from the same cardboard and paper books (as well as from the "e" variety)  and play many of the same games he did – hop scotch, jump rope and ring-around the rosy.
Change will etch itself into the lives of my grandchildren as surely as it did my own, my parents' and my grandparents'. Hybrids will give way to fully electric (and perhaps hemp-powered) vehicles (effective or defective) and though electricity will continue to be generated by hydroelectric dams, wind farms and nuclear power plants, some new and unimaginable source of power will surely push back the nights of my grand children's children. 
Law, politics, society and culture also exist in the 200-year present of conflict resolution. In my personal 200-year span, the law seems to have changed the most profoundly. Was it the law first and culture later? Or do they weave our future together?
The first U.S. woman lawyer, Myra Bradwell, was admitted to practice a mere ten years before my grandmother was born. Mrs. Bradwell’s legal career was the subject of one of the sorriest U.S. Supreme Court decisions ever handed down, in which the Court opined,
The civil law as well as nature itself, has always recognized a wide difference in the respective spheres and destinies of man and woman. Man is, or should be, woman’s protector and defender. The natural and proper timidity and delicacy which belongs to the female sex evidently unfits it for many of the occupations of civil life. The constitution of the family organization, which is founded in the divine ordinance, as well as in the nature of things, indicates the domestic sphere as that which properly belongs to the domain and functions of womanhood. The harmony, not to say the identity, of interests and views which belong, or should belong, to the family institution is repugnant to the idea for a woman adopting a distinct and independent career from that of her husband … for these reasons I think that the laws of Illinois now complained of are not obnoxious to the charge of any abridging any of the privileges and immunities of cities of the United States.
My grandparents', parents' and step-children's 20th Century was dominated by genocide on a scale and a technological precision unimaginable to our earlier forebears. Mid-century brought with it the threat of nuclear annihilation but also liberated millions of people enslaved by colonialism. We cured polio in my own lifetime with both "dead" and "live" vaccines (neither of them counterfeit) - a singular moment in scientific history during which no one took ownership of the cure and no one tried to stop others from seeking another, a problem Patently O addressed this week in Reverse Payments.
Whether god or satan, heaven or hell, war or peace "won" the twentieth century, the world's greatest peace-making body was created during it -- the United Nations. And here in the U.S., the “living room war,” Viet Nam, coupled with the largest generation of adolescents ever to grace American society, ended the forcible induction of young men into the military. 
With the recent discovery of our earliest ancestor, Ardi, our biological and social lives exist in a 4.4 million year now. Our physical bodies “evolve” in the womb along the same lines as did our species and, once born, we carry with us our earliest organs.  Most critical of these to conflict escalation and avoidance is our “fight-flight” mechanism – the amygdala. And the most pertinent biological agents to promote the collaborative resolution of conflict are our “mirror neurons” which
provide a powerful biological foundation for the evolution of culture . . . absorb[ing] it directly, with each generation teaching the next by social sharing, imitation and observation.
How we’ve manage to survive despite our tendency to misread one another’s actions, intentions and emotions, is often the subject of those who advise us how to choose and move juries -- here -- Anne Reed at Deliberations (explaining why "they" don't see things like "we" do here); and, the Jury Room (explaining why pain hurts more intensely when we believe it's been intentionally inflicted here).
The Most Effective Conflict Resolution Technology is the Oldest
One of our true original gangsters, Al Capone, is reported to have said that “you can get much further with a kind word and a gun than you can with a kind word alone” and one of our greatest Presidents, Theodore Roosevelt said “speak softly and carry a big stick.”
As Robert Wright, author of The Moral Animal explained, had Tit for Tat been tossed into the game with 50 steadfast non-cooperators, there would have been a 49-way tie for first place. But none of the players' programs failed to cooperate in at least some circumstances, leaving Tit for Tat the clear victor. According to Wright, humans, like the programs in Axelrod's competition, are evolutionarily “designed” to cooperate under at least some circumstances. The engine and benefit of cooperation is present in our neurochemistry. When scientists observed the brain activity of volunteers playing the Prisoner’s Dilemma game, for instance, they found that the participants' “reward circuits” were activated and their impulsive "me first" circuits inhibited when they cooperated. Cooperation, retaliation, forgiveness and a return to cooperation. Tit for Tat.
We don't "dis" lawyers here at the Negotiation Blog. We simply remind ourselves that our primary purpose is the promotion of justice, with a stable societal order closely behind. Most people don't understand, for instance, that Shakespeare's famous the first thing we do, let's kill all the lawyerswas not an insult. In King Henry IV, Act IV, Scene II, Shakespeare's sentiment was not his own, but that of a revolutionary who wished to destroy the social order.
The historic "present" of laws and lawyers is in the thousands, not simply the hundreds, of years. Hammurabi (make of his choice for the memorialization of his laws what you will) was the sixth king of Babylon, remembered for creating -- in his own name (and likeness?) - the first written and systematic legal code.
For the wrongful killing of another, for instance, the victim’s kin were paid according to the social status of the deceased party. Thus the ‘man price’ for killing a peasant was 200 shillings and that for a nobleman 1200 shillings. Payments were not, however, tailored to the loss, but fixed according to types of affront, a distinction we continue to make when we punish intentional torts more severely than negligent ones. >
Lawyers, litigators and trial lawyers are too often demonized by the ADR community as if you could get someone to sit down to negotiate without first pointing the gun of litigation at their heads; I salute you (and myself, for that matter!) for bringing us all to the bargaining table. See Steve Mehta's recent post at Mediation Matters, Factors When Peace Makes Sense for a note that touches upon the symbiotic relationship between litigation and mediation, litigators and mediators.
I shouldn't cite single legal blogs twice, but I cannot resist this quote of Scott Greenfield's on another pundit's view of the future lawyers have in store for them, i.e.,
shucking oysters for a living if we don't accept a future of lawyers being piece workers in factories, sending our work off to Bangalore in pdf files and complementing people on their choice of forms at Legal Zoom.
Which came first? Public civil trials or private arbitrations? You’ll be surprised, I’ll wager, to hear that arbitration was one of the earliest forms of dispute resolution, practiced by the juris consults of the Roman Empire. Roman arbitration predates the adversarial system of common law by more than a thousand years. 
Ah, the glory of Rome! The juris consulti were (like too many mediators) amateurs who dabbled in dispute resolution, raising the question whether they (and we) should be certified or regulated as Diane Levin asks at The Mediation Channel this week. The Roman hobbyists gave legal opinions (responsa) to all comers (a practice known as publice respondere). They also served the needs of Roman judges and governors would routinely consult with advisory panels of jurisconsults before rendering decisions. Thus, the Romans – god bless them! - were the first to have a class of people who spent their days thinking about legal problems (an activity some readers will recall Ralph Nader calling "mental gymnastics in an iron cage").
It was Buckminster Fuller who famously opined that the "significant problems we face cannot be solved at the same level of thinking we were at when we created them." If you keep this aphorism in mind for the remainder of this post, you'll likely have some extraordinarily innovative comments to make in the comment section below.
As the Law Guru wiki reminds us, we can trace the adversarial system to the "medieval mode of trial by combat, in which some litigants were allowed a champion to represent them." We owe our present day adversarialism, however, to the common law's use of the jury - the power of argumentation replacing the power of the sword.
The Act abolishing the infamous Star Chamber in 1641 also granted every "freeman" the right to trial by "lawful judgment of his peers" or by the "law of the land" before the Crown could "take or imprison" him or "disseis[e] [him] of his freehold or liberties, or free customs." Nor could he any longer be "outlawed or exciled or otherwise destroyed." Nor could the King "pass upon him or condemn him."
English colonies like our own adopted the jury trial system and we, of course, enshrined that system in the Fifth, Sixth, and Seventh Amendments. Whether this 17th century dispute resolution technology can be fine-tuned to keep abreast of 21st century dispute creation technology (particularly in the quickly moving area of intellectual property) remains one of the pressing questions of legal and ADR policy and practice, particularly in a week in which a Superior Court verbally punished the lawyers before it for filing The Most Oppressive Motion Ever Presented (see the Laconic Law Blog). The motion?
Defendants['] . . . motion for summary judgment/summary adjudication, seeking adjudication of 44 issues, most of which were not proper subjects of adjudication. Defendants’ separate statement was 196 pages long, setting forth hundreds of facts, many of them not material—as defendants’ own papers conceded. And the moving papers concluded with a request for judicial notice of 174 pages. All told, defendants’ moving papers were 1056 pages.
Mediator, author and activist, Ken Cloke, suggests that interest-based resolutions to conflict must replace power and rights based resolutions if we expect to create a future in which justice prevails. As Ken wrote in Conflict Revolution:
Approaching evil and injustice from an interest-based perspective means listening to the deeper truths that gave rise to them, extending compassion even to those who were responsible for evils or injustices, and seeking not merely to replace one evil or injustice with another, but to reduce their attractiveness by designing outcomes, processes, and relationships that encourage adversaries to work collaboratively to satisfy their interests.
Evil and injustice can therefore be considered byproducts of reliance on power or rights, and failures or refusals to learn and evolve.
All political systems generate chronic conflicts that reveal their internal weaknesses, external pressures, and demands for evolutionary change. Power- and rights-based systems are adversarial and unstable, and therefore avoid, deny, resist, and defend themselves against change. As a result, they suppress conflicts or treat them as purely interpersonal, leaving insiders less informed and able to adapt, and outsiders feeling they were treated unjustly and contemplating evil in response.
As pressures to change increase, these systems must either adapt, or turn reactionary and take a punitive, retaliatory attitude toward those seeking to promote change, delaying their own evolution. Only interest-based systems are fully able to seek out their weaknesses, proactively evolve, transform conflicts into sources of learning, and celebrate those who brought them to their attention.
These are the words I leave with the readers of Blawg Review #234 because they are the ones that informed my personal and professional transformation from a legal career based on rights and remedies to one based upon interests and consensus.
Whatever my own personal 200-year present was, is and will be, it is pointed in the direction of peace with justice, with an enormous and probably unwarranted optimism best expressed by the man after whom my law school was named: Martin Luther King, Jr. - the arc of history is long, but it bends toward justice.
Blawg Review has information about next week's host, and instructions how to get your blawg posts reviewed in upcoming issues. Next week's host, Counsel to Counsel, will devote its round-up of the week's best legal posts to the Great Recession.
 Earlier scientific theory posited that each human embryo (see Embryo Mix-Up at the Proud Parenting Blog) passes through a progression of abbreviated stages that resemble the main evolutionary stages of its ancestors, i.e., that the fertilized egg starts as a single cell (just like our first living evolutionary ancestor); as the egg repeatedly divides it develops into an embryo with a segmented arrangement (the “worm” stage); these segments develop into vertebrae, muscles and something that sort of looks like gills (the “fish” stage); limb buds develop with paddle-like hands and feet, and there appears to be a “tail” (the “amphibian” stage); and, by the eighth week of development, most organs are nearly complete, the limbs develop fingers and toes, and the “tail” disappears (the human stage). It turns out that this one-to-one correlation was too simplistic, but it remains safe to say that our biological development still passes through several stages that “recapitulate” the evolution of our species.
 The amygdala is a region of the brain that permits the formation and storage of memories associated with emotional events. It permits us to “read” the emotional responses of our fellows and is thought to facilitated our ability to form relationships and live and work in groups. It is also the source of our “fight or flight” response to danger.
Studies show that some mirror neurons fire when a person reaches for a glass or watches someone else reach for a glass; others fire when the person puts the glass down and still others fire when the person reaches for a toothbrush and so on. They respond when someone kicks a ball, sees a ball being kicked, hears a ball being kicked and says or hears the word "kick."
“When you see me perform an action - such as picking up a baseball - you automatically simulate the action in your own brain,” said Dr. Marco Iacoboni, a neuroscientist at the University of California, Los Angeles, who studies mirror neurons. ”Circuits in your brain, which we do not yet entirely understand, inhibit you from moving while you simulate,” he said. ”But you understand my action because you have in your brain a template for that action based on your own movements. “
 Looking toward the future, the Neuroethics and the Law Blog predicts that in the “experiential future, we will have better technologies to measure physical pain, pain relief, and emotional distress. These technologies should not only change tort law and related compensation schemes but should also change our assessments of criminal blameworthiness and punishment severity” here.
The adversarial system of medical negligence fails to satisfy the main aims of tort law, those being equitable compensation of plaintiffs, correction of mistakes and deterrence of negligence. Instead doctors experience litigation as a punishment and, in order to avoid exposure to the system, have resorted not to corrective or educational measures but to defensive medicine, a practice which the evidence indicates both decreases patient autonomy and increases iatrogenic injury.
(Iatrogenic, by the way, is a fancy term for “we have know idea whatsoever what the source of this ailment is). Chris is looking for comments so run on over there if you’ve been thinking about medical malpractice litigation during the marathon American health care debates.
From preparation to closing, some of L.A.'s most prominent mediators reveal the secrets of getting the best deal available for your clients.
Read former CAALA Trial Lawyer of the year Sandy Gage's article on Getting the Best Results in Mediation and AIM founder, mediator and trainer Lee Jay Berman'sTwelve Ways to Make Your Mediator Work Harder for You.
My ADR Services, Inc. colleagues Jan Schau, Michael Diliberto, Joan Kessler (the brains behind the entire issue!) and Leonard Levy round out the issue with Telling Lies, Telling Secrets (Schau); Opening Offers: Who's on First (Diliberto); The Defense Reveals Mistakes that Could Cost Your Client Money; and Kessler's incisive executive summary of them all.
Oh, yes, I'm here too with one of my mediation narratives, We Tell Ourselves Stories in Order to Live.
The online Advocate can be read like a magazine, complete with turning pages. It's a pretty cool online journal format in addition to being a great contribution to the growing literature on best mediation practices.
Dive in! The water is warm and the natives are friendly.
The following is the conclusion of an excellent post on the recent Pfizer-Justice Department settlement noting that it met "the People's" justice interests better than a judgment could have. The full article, Settlement and Justice for All by Robert C. Bordone & Matthew J. Smith** can be found here at the Harvard Negotiation Law Review.
More than honoring principles a court might champion, the negotiated settlement with Pfizer allows the Justice Department to secure commitments from Pfizer that would have been unlikely in a court verdict. In addition to the enormous cash payment, the settlement agreement allows for closer monitoring of Pfizer by Justice Department officials in the years ahead, ensuring corporate accountability and providing an extra measure of protection for consumers. As part of the deal, Pfizer entered into a Corporate Integrity Agreement with the Office of Inspector General of the Department of Health and Human Services and will be required to maintain a corporate compliance program for the next five years.While a judge might choose to retain judicial oversight in a particular case, federal courts typically lack the expertise or resources to provide the kind of enforcement needed to ensure a systemic and long-term remedy in a technical or highly specialized case such as this.
The Pfizer settlement represents the best kind of transparent, efficient, and wise government law enforcement. It holds Pfizer wholly accountable for its actions, sends a strong and clear message to the public that corporate malfeasance will not be tolerated, provides for ongoing enforcement, and it does it all at a fraction of the cost of trial. While many cases should proceed to trial for reasons of precedent and public policy, negotiated settlement – when approached with wisdom and aplomb – can be a most efficient and effective means of law enforcement.
Thanks to Don Philbin for being one of the best navigators of quality in the ADRosphere! "Friend" him on Facebook here.
**/ Robert C. Bordone is the Thaddeus R. Beal Clinical Professor of Law at Harvard Law School and Director of the Harvard Negotiation and Mediation Clinical Program. Matthew J. Smith is a Lecturer on Law at Harvard Law School and a Clinical Fellow at the Harvard Negotiation and Mediation Clinical Program
Because the vast majority of my litigation and mediation clients were and are corporate entities or highly successful entrepreneurs, executives or managers, I was and am rarely in a position to coerce a client into doing something it didn't want to do.
As a mediator, however, I hear stories.
Some of the stories I hear are told by disgruntled individuals who feel as if they were coerced by their own counsel into settling their litigation during a mediation. Others have reported that they felt ganged up on by their attorney and the mediator. Some have complained that they were unduly pressured to stay in the mediation process long after they were too tired or hungry to think clearly.
These stories are troubling to any mediator who values the good reputation of the mediation process itself. They should also disturb attorney mediation advocates.
Is it below the standard of care for an attorney to subtly (or not so subtly) pressure his or her client to settle litigation? Under certain circumstances, I think it is. Here's the bad news. If a litigant is unhappy with the outcome of mediation, he or she is far more likely to bring a complaint (or lawsuit) against his or her own attorney.
In a 2006 article in the Ohio Journal on Dispute ResolutionTAKE IT OR LEAVE IT. LUMP IT OR GRIEVE IT: DESIGNING MEDIATOR COMPLAINT SYSTEMS THAT PROTECT MEDIATORS, UNHAPPY PARTIES, ATTORNEYS, COURTS, THE PROCESS, AND THE FIELDPaula M. Young, Assistant Professor at the Appalachian School of Law cites Mel Rubin on "settle and sue" cases which Rubin suggests are on the rise among clients unhappy with the outcome of a mediation. Rubin "also suggests that if a client is unhappy with the outcome of mediation, he or she is more likely to sue his or her attorney for malpractice. Id.
What might actionable attorney mediation malpractice look like? Young cites the example of one woman who told the following story:
I refused to sign several times. My attorney then began yelling at me to “shut-up and sign the damn thing” I wasn't allowed to leave until it was signed . . . . The words, “NO I can't sign this,” fell on deaf ears. I was so unfamiliar with the process of it all and what it meant and what the outcome entailed.
Young has a systemic solution for problems like these: procedural "justice" during the mediation itself and grievance procedures for dissatisfied litigants. She writes:
To the extent the procedural justice research indicates that parties who perceive they have received procedural justice in mediation also perceive that the negotiated outcome in mediation is fair, we would expect that these parties are not likely to later sue their attorneys for malpractice. Even when the client has little trust in his or her attorney, a mediation process that enhances procedural justice allows the party to assess directly whether he or she feels exploited or mistreated in the process.
Even if the mediation process itself lacks procedural justice and the client accordingly remains dissatisfied and suspicious, a well-designed grievance system, emphasizing procedural justice from the client's perspective, may give the client the reassurances he or she needs. A client who suspects collusion between his or her lawyer and the neutral could seek the informed opinion of the regulatory body, without ever having to file a legal malpractice law suit.
Remember that we tend to stumble and fail when we're Hungry, Angry, Lonely (marginalized) or Tired (HALT) and so do our clients. When I notice litigants flagging or attorneys losing their tempers, I suggest a walk around the block, a nutrition break (not eating more cookies) and, in extreme cases (someone becomes ill during the course of the session) reconvening at a later date. Remember how powerful and all-knowing you appear to be to your clients and what a strange and frightening land the "justice system" is for those who are encountering it for the first time.
There's no better defense to professional negligence actions that the quality of your relationship with your clients. Keep channels of communication open. Demand that your adversary and the mediator treat your client with respect. At the first sign that a mediator is exercising undue influence on your client, say something, just as you would if opposing counsel were harassing your witness at a deposition. Follow these dictates and you'll rarely if ever be worrying about calling your insurance carrier.
As every mediation advocate must know by now, the California Supreme Court has locked down mediation confidences from attack at every turn. There can be no implied waiver of Evidence Code section 1119's protections and you cannot be estopped to assert it (Simmons v. Ghaderi) (.pdf of the opinion here).
Your client may have been coerced into signing off on the agreement; may not have understood what she was signing; or her assent could have been induced by your opponent's material misrepresentations of fact. Your client's insurance carrier may be guilty of actionable bad faith during the course of the mediation. Too bad. The mediation proceeding is given greater protection than given to penitents in a confessional.
But you can inadvertently expressly waive the protections of mediation confidentiality if you've carelessly crafted your own confidentiality agreement.
California's Second District Court of Appeal held in Thottam (.pdf of opinion here) that a party's confidentiality agreement did just that -- waived the protection -- permitting one party to introduce an otherwise inadmissible draft agreement into evidence for the purpose of enforcing an otherwise unenforceable mediated settlement agreement.
As the Court in Thottam held, Section 1123(c)'s requirement that all parties to a mediated settlement agreement "expressly agree in writing . . . to its disclosure," may be satisfied by terms contained in a writing other than the alleged settlement agreement itself, including a writing executed before a settlement agreement has purportedly been entered into. Because the "draft agreement" at issue in Thottam did not contain 1123's "magic" enforcement language and because the term sheet drawn up during the mediation was not sufficiently certain to enforce in any event, one party to the subject probate proceeding objected to its introduction into evidence and to the admission of testimony concerning otherwise confidential statements made during the mediation.
Had there been no confidentiality agreement, the issue would have been controlled by Evidence Code sections 1115 et seq.; the "agreement" would have been excluded from evidence as non-compliant with section 1123; and, no evidence of statements made during the mediation would have been admitted into evidence.
Here's the danger of drafting your own confidentiality agreements in an attempt to expand the scope of mediation confidentiality.
According to the appellate court opinion, because the parties expanded the scope of confidentiality beyond that provided by the statute, the exception to the protection ("except as may be necessary to enforce any agreements from the Meeting") was broader than the enforcement exception contained in section 1123. As one blogger cogently put it at the time, "the big print giveth and the small print taketh away."
I think it's safe to say that this result was pretty much completely unpredictable and that it was within the standard of care for counsel to expand the protections contained in section 1119 (for an example of the problems created by its relatively narrow confines, see mediator Debra Healy'scomments and my response about the scope of mediation confidentiality in an earlier post in this series).
Post-Thottam, however, counsel must be extremely careful in drafting confidentiality agreements lest they inadvertently take away the protections the legislature created and the Supreme Court has so assiduously enforced.
In short, don't get fancy. Just stick with the language of section 1119
If you didn't already understand how to protect your mediated settlement agreement from challenge, you do now.
But wait a minute! Is that what you want?
What if your client entered into the agreement only because its opponent made a material misstatement of fact? What if one of your co-defendants challenges your settlement agreement as not having been made in good faith, thus exposing your client to potential liability for indemnity or contribution? Can you win the "good faith settlement" motion without the testimony of the participants in the mediation?
Parties are entitled to walk out of a mediation with a whole range of outcomes, from a completed settlement agreement, to a term sheet, to an oral understanding, to a promise to think over the other side's last offer, to a promise to see the other side in court! As long as both sides understand what they are getting at the conclusion of the mediation session, there should be no basis for a malpractice claim for any of these outcomes. If the parties choose to use a term sheet with no language in it indicating that they have settled their case, they just need to understand that any party can renege on the deal after the mediation. In some cases, that may be what the parties want, to give them some time to think the whole thing over.
Joe's comments put the emphasis in mediation advocacy back where it belongs -- on the fully informed assent of the parties and on the strategic plans of litigation counsel.
So here's yet another way to commit legal malpractice as a mediation advocate: don't fully understand the implications of mediation confidentiality on the final resolution of your client's dispute. I'll just bullet point ways to protect yourself and your client below and ask others to chime in with their recommendations:
if your client is relying upon the veracity of its opponent's representation in entering into the deal, write that representation into the agreement or deal points, i.e., "Party A and Party B both understand that Party A is entering into this agreement based upon the following representation/s: .................................... " Then you can include any other language that makes sense in the context of the agreement. You can provide that Party B's production of documents confirming its representations to Party A is a condition precedent to Party A's obligations under the settlement agreement. If your client simply needs protection down the line in the event FACT X proves to be untrue, you can include a liquidated damage clause in the agreement or provide for an expedited means of resolving any dispute resulting from the falsity of FACT X ; or, you could provide that the falsity of FACT X will render the settlement agreement null and void;
you could avoid the problems created by the strict enforcement of mediation confidentiality by agreeing with your opponent (in writing!) that the neutral-facilitated settlement negotiation is not a mediation to be governed by Evidence Code section 1115 et seq. but a settlement conference governed by Evidence Code section 1152 et seq. This option would be a useful one to a defendant who is settling the action separately from co-defendants who might bring a motion challenging the good faith of your settlement.
Less drastically, you could simply include in your settlement agreement a provision by which the parties agree that the mediation confidentiality protections as codified in section 1119 will not apply in the event a co-defendant challenges the good faith of the settlement. Remember that the mediator is considered incompetent to testify so that your waiver of mediation confidentiality in the event testimony is needed to oppose a challenge to the good faith of your settlement may not permit the mediator to testify at the hearing (or to offer a declaration in opposition to the motion) as well he or she -- a neutral party -- shouldn't.
You're a litigator. There are probably hundreds of ways to skin this particular cat. The keys are knowing and understanding the law of mediation confidentiality and thinking through all of the implications it might have on your clients' rights or interests down the line. That's what we litigators do and we shouldn't abandon those strategic considerations just because we believe we're settling this case for good and it will never come back to haunt us or our clients again.
Remember, you are in control of the process. If you don't like mediation confidentiality, tailor a confidentiality agreement to suit your circumstances. You will, of course, have to "sell" your proposal to your opponent. The best time to do that might well be at the end of the mediation rather than at its commencement. By that time, your opponent is pretty darn committed to the resolution of the lawsuit. His client is already planning on ways he can more profitably spend his time and money other than on further litigation, attorneys' fees, and court costs. The plaintiff is, I guarantee you, already spending the settlement monies or planning the celebration back at the office and wondering whether this might lead to the promotion he or she has been waiting for.
Yet another way to commit legal malpractice (and how to avoid it) tomorrow!
Today's New York Times Op-Ed piece on "diplomatic engagement" (Terms of Engagement) as a strategy for "chang[ing] [Iran's] perception of its own interests and realistic options and, hence, to modify its policies and its behavior," offers good strategic negotiation lessons for mediators and mediation advocates alike. As Crocker explains:
[E]ach case of engagement has common elements. Engagement is a process, not a destination. It involves exerting pressure, by raising questions and hypothetical possibilities, and by probing the other country’s assumptions and thinking. Above all, it involves testing how far the other country might be willing to go. Properly understood, the diplomacy of engagement means raising questions that the other country may wish to avoid or be politically unable to answer. It places the ball in the other country’s court.
Litigation is an extremely good way to "exert pressure," on your negotiation partner by burdening it with the costs of waging the adversarial contest. The litigation itself not only "rais[es] questions and hypothetical possibilities" but through the process of discovery, it also "probes [the opponent's] assumptions and thinking" and "test[s] how far [your opponent] might be willing to go" to achieve victory.
Parties disappointed with mediation and mediators are usually dissatisfied with the mediator's inability to engage in the final step of "engagement diplomacy" -- "raising questions that the [opponent] may use to avoid or be [positionally] unable to answer." A good mediator is unafraid to raise those difficult questions with each side of a dispute. But raising those difficult questions is not enough. A good mediator must also be able to deliver bad news to the parties in such a way that the parties are able to hear it.
If the goal of the negotiators -- the attorneys -- is to "change the[ir] [opponent's] perception of its own interests and realistic options and, hence, to modify its policies and its behavior," the negotiators and their clients must be prepared to:
reveal to the mediator
hidden constraints preventing them from modifying their demand or offer; and,
hidden interests that must be served in order to justify any such modification
candidly acknowledge (in separate caucus)
the weaknesses of their position; and,
any constraints on their client's willingness and ability to put their convictions to the test of a jury verdict or judgment by the court
help the mediator help their clients understand that most litigation is based upon differing subjective experiences of the same "objective" series of events so that no one must admit that the other side is "right" and their own side is "wrong"
An example of the lengths to which people will go to be "right" is unfortunately provided to us today by the obituary of the first anti-abortion advocate to be shot and killed for his beliefs. The slain activist spent years protesting outside the car dealership owned by Tony Young, who explained how the protests finally ended (from Slain Abortion Opponent Loved the Controversy)
Mr. Young said that after about three years of protesting outside his dealership, Mr. Pouillon came in and offered a truce. “ ‘Tony,’ ” Mr. Young said the exchange began, “if you would just agree that I’m right on my beliefs, I’ll stop.’
“I just told him, ‘Sure, Jim, you’re right,’ ” Mr. Young said, chuckling. After that, he said, Mr. Pouillon moved on.
Although few cases could so easily turn on the dime of a semi-sincere acknowledgement that the other side is "right," most attorneys would be surprised by how much value can be generated by acknowledging that the other side's version of the facts or the law is not crazy, evil, bizarre, intellectually dishonest or asserted in bad faith. See The Biggest Lie in the Business: It's Only About Money. As I noted there:
The social scientists who study these things say that the way in which we respond to adversity "often reflects the fact that [our] prestige or status has been threatened more than the fact that [our] purchasing power has been diminished." Miller, Disrespect and the Experience of Injustice, Annual Review of Psychology (2002). In other words, the corporate C.E.O., like any other kid on the block, will retaliate when he feels he has been disrespected.
Conversely, research shows that business people are reluctant to recommend legal action if they believe that they and their company have been treated respectfully.
By the same token that business people are reluctant to recommend legal action if they believe their company has been treated respectfully, they are often far more willing to settle litigation if they believe their positions have been heard and acknowledged as having been made in good faith. For those headed toward settlement discussions or mediation, Crocker has good advice:
[B]y far the greatest risk of [diplomatic] engagement is that it may succeed. If we succeed in changing the position of the other [side's] decision-makers, we then must decide whether we will take yes for an answer and reciprocate their moves with steps of our own. If talk is fruitful, a negotiation will begin about taking reciprocal steps down a jointly defined road. Engagement diplomacy forces us to make choices.
If litigators and their clients are aligned in the interest of settling litigation, they must prepare themselves to take "yes for an answer" by having in place a strategy of engagement that will permit them to reciprocate the other side's moves with steps of their own. A good mediator should be capable of bringing all parties to the on-ramp of the road that counsel and their commercial clients are well-placed to and highly skilled at jointly defining.
The last time I trained an in-house legal department, I asked every group manager this question: if I could leave a silver bullet behind, what would it be?
The response was unanimous from this well-run Fortune 500 Company: fix our relationship with the __________ Department: it chronically undermines our negotiations with outsiders. The _________ Department was the only one sending none of its people to the two-day negotiation training. An executive friend of mine said, "that's not surprising - no one can see a black hole."
Despite the _________ Department's absence, I created groups of in-house attendees who represented each internal department and asked them to generate a list of the interests of their negotiating teams, including the _________ department, which is one of the recommendations made by Brett, Friedman and Behfar.
There's an executive summary at the link above but I'd shell out the money for a copy of the print magazine to have the full text of this article. Here are the recommendations of the experts:
Plot out the conflicts
Work with constituents
Mediate conflicts of interest
Persuade with data
simulate the negotiation
assign roles to capitalize on team members strengths and interests
establish a plan for intrateam communication
I'll write a post a day about each of these strategies when I return from vacation. In the meantime, litigators who work with teams inside the firm; who defend complex litigation with joint defense groups; and, who must bargain with others with very different interests (construction litigation comes to mind) should be thinking of the ways in which integrated negotiation planning could maximize the settlement benefits to be gained by strategic partners.
Nearly all negotiators know Robert Cialdini’s six “rules” of influence: reciprocation, commitment and consistency, social proof, liking, authority and scarcity. They are easy to remember because we are all influenced by them every day.
Reciprocation: When your waiter puts a mint on the table or your local charity sends you free mailing labels, both benefit from the power of reciprocity. Not only do we feel uncomfortable unless we reciprocate this generous behavior, we will reward it in kind. Waiters' tips go up and donations increase – however modestly -- when these benefits are bestowed on us. In the negotiation of a dispute, an acknowledgement that you’ve heard and understood your opponent’s position; or that you are sorry he was harmed by the activities you continue to believe were benign, does in fact motivate your adversary to respond in kind – often by revealing otherwise hidden interests or concealed fears that can break impasse.
Authority: I’ve never been a Judge, but I am a “settlement officer” with the United States District Court for the Central District of California. I’ve also tried cases to a jury and have twenty-five years of complex commercial litigation experience. Each one of these credentials gives me a different kind of authority, but all of them make what I say to a litigant considering settlement more persuasive.
The District Court gives me a little lapel pin to wear and I always wear it when I'm doing the federal court's "settlement officer" work. I have a badge! To my peers, “settlement officer” means nothing other than a volunteer for the Court. To the parties, however, being an “officer” of a federal court sounds impressive; authoritative. Difficult mediations often have dead time in them in which the parties engage in small talk. When clients ask me about the lapel pin, I modestly explain my role as a “settlement officer” for the District Court. The parties invariably treat me with greater deference after this conversation. I know it sounds like a small point, but sometimes all you need is one extra little push to get the parties past impasse.
Liking: I do not believe it’s possible to be a skillful negotiator unless you are likeable. This trait is especially important for a mediator who must garner the trust of a complete stranger with lightening speed. You do not have to possess rock star likeability to accomplish this. All you need do is to find something to like about the others. We all want approval and we all wish to be admired and desired. The good news is that all of us have some trait or characteristic that is desirable and admirable. If you look for those traits in another and casually remark on them, the cycle of liking and being liked is commenced.
The cycle is speeded if you couple your liking with something similarly likeable in yourself. "You’re a musician! I’ve always wished I’d taken music classes. My husband (or sister, or aunt, or best friend) is a pianist with a small chamber group locally." Now you're not only more likable, you're like "one of us" and you get the benefit of relatedness, an easier "fit" and an automatic feeling of trust and confidence. See Conspiracy Theories and Granfalloons for the full story on the way "liking" and affiliation work. If you’re not serving as a neutral but simply a negotiator, you can couple this “liking” and musical affiliation with reciprocity: “do let me give you my sister's chamber music schedule; during the summer they give free concerts in the park.” A trifecta of influencers.
Social Proof : “Yes, mom, if I see my friends jumping off a cliff I’m pretty inclined to do so as well.” Our tendency to "monkey see, monkey do" may begin in Middle or High School, but it does not end there. You don’t have to live in Los Angeles to feel the effect of this tendency to do what others do – you only need to be in a traffic jam caused by “rubber-necking” once to remember that we’re primates. This is part of the value of market valuations and jury verdict reports. They not only provide “authority” for your position on price, but they carry the weight of other people’s valuation. This is social proof.
Scarcity: the effect of scarcity on value is something we see every day in store windows and newspaper ads: “limited offer” and “one time only sale” are recycled over and over again by the same stores for the same items and yet we’re moved to feel an urgency that brings us into the store and makes us purchase an item we don’t need and didn’t desire. Litigators often use the principle of scarcity to “sell” the resolution of litigation. “After we commence discovery, this offer will no longer be on the table.” Or. “We’ll be picking a jury in thirty days. Don’t expect to see a demand this low ever again if we don’t settle by day’s end. Scarcity.
Commitment and Consistency: Many neutrals like to begin a mediation in joint session for the purpose of obtaining the parties’ commitment to settling the case today if reasonable terms are offered. It’s almost impossible to resist signing on to this principle and it's common for people to feel bound by it even if circumstances change. At some point during the negotiation, the parties will begin to feel committed to the resolution of the litigation. They can picture themselves free of its many burdens or receiving money rather than spending it on their attorneys. Seeking and making commitments holds our feet to the fire of our intention. Ask anyone who’s ever made public her decision to lose weight or exercise at least three days a week. If we act inconsistently with the promise we’ve made to friends, family or community, we fear a loss of “face.”
If you apply the five principles subject of this series to your negotiations, you will get the better part of the bargain on nearly every occasion. Remember – simply asking diagnostic questions will make you a better negotiator than all but seven percent of your bargaining partners. Add to this the ability to deftly frame the negotiation favorably to you; to anchor the bargaining range to your liking and to be influential in your dealings and I guarantee you success in most of your business affairs.
(right, the ultimate in lame reason giving: the dog ate my homework!)
To reinforce anchoring and framing effects of first offers and offer-characterization, always state the reason you are valuing the item to be traded in the manner you are.“I’m offering to pay you $20,000 in exchange for a dismissal because (choose one or more):(a) I impeached your witness with interrogatory answers in the deposition; (b) the only case law in your favor has been questioned by the Supreme Court and hasn’t been cited since 1972; (c) your expert witness went to Ralph’s School of Law and mine went to Harvard; (d) recent jury verdicts for the theft of trade secrets of this nature have been less than the cost of doing the first round of discovery; and, (e) anything else you have.
In experiments on reason giving, researchers have found that people are far more likely to accommodate others if a reason is given even if the reason makes no sense whatsoever.In one such experiment, students were asked to cut into a line at Kinkos.One group was instructed to give no reason; another to give a good reason ("I’m late for class”) and another to give an irrational reason (“because I want to”). Those who provided no rationale were, not surprisingly, the least successful. Only sixty percent of them were allowed to "cut" into the line. Those who presented a logical rationale got what they wanted an extraordinary 94% of the time.But here's the truly remarkable part. Those students who presented a meaningless rationale such as, "I want to cut in line because I need to," racked up a ninety-three percent success rate, only one percent less than their logical peers.
Every new offer or demand provides another opportunity to influence your adversary about the value (or lack thereof) in the subject matter of the lawsuit.
There's nothing litigators do better than rationalize, justify, explain, elaborate, rebut, support, and opine. Don't leave those excellent tools at home when it comes time to negotiate the resolution of your lawsuit.
In that most famous of sales movies,David Mamet's Glengarry Glen Ross, the under-appreciated Alec Baldwin gave his sorry group of cold-callers the prime directive of sales: Always Be Closing. You close when you convene the negotiation, close when you open it, close when you ask diagnostic questions, close when you offer your bargaining partner coffee, and close by MAKING THE FIRST OFFER.
In an environment of uncertainty where the value of one or more items to be traded is not fixed, the negotiator who makes the first offer will “anchor” the bargaining session in her favor throughout the bargaining session. Even when we know that someone else is trying to influence us by framing an issue or valuing the subject matter of a dispute, we will be influenced. We can’t help it. Our brains just work that way. To encourage your opponent’s vulnerable mind to be influenced with your valuation, it is best to state the reasons for your bargaining position. Researchers have noted that low valuations draw our attentions to the weaknesses of the item to be traded – a car for instance – and that high valuations draw our attentions to its strengths. You should take advantage of this by coupling your first offer with the reasons why the item you are buying or the thing you are selling should be valued low for a buyer or high for a seller.
And now a little something from the man who tore the sheets off the world of the cold call; off of the men working on a draw against commissions; off the guys who came around my house before I turned ten years old to talk dirty, make me paper airplanes, and perfect the lies that would get tomorrow's prospects to sign on the dotted line: David Mamet.
Someone recently told me that you can't argue with a story, only with a position or another argument. That's why narrative is such a powerful impasse breaker and why asking diagnostic questions, which elicit stories rather than arguments, so often bridges gaps between the parties that yawn as wide as the Grand Canyon That's why I'm listing Asking Diagnostic Questions as the second most powerful means of breaking negotiation impasses.
Diagnostic questions are those that reveal your bargaining partners’ desires, fears, preferences and needs. Though your bargaining partner will never reveal its true bottom line, it may well acknowledge that it places a far lesser or higher value on the subject of litigation – real property, for instance -- than you do. And though your adversary will never acknowledge the rectitude, nor even often the good faith, of your legal or factual position, she may easily disclose that she needs the money she seeks to infuse capital into her business, to pay back debts, to put her children through college or to acquire much-needed catastrophic health insurance.
You may also find that your bargaining partner is willing to disclose whether he is risk averse or risk courting and whether his predictions for the future of an enterprise – yours perhaps – are more optimistic or pessimistic than your own. Once you learn what your opponent wants, needs and prefers, you can commence – or reconvene – a negotiation that is more tailored to your adversary’s desires; one that will increase the number and value of items both of you have to exchange with one another.
Just a few examples from my own practice:
a case concerning the repayment of over-paid health insurance benefits to physicians settled at a number the defendant said she would never pay when the Plaintiff revealed the existence of an agreement between it and a board member that no one else who was overpaid would get a better deal than he had.
a case concerning the dissolution of a partnership settled when I asked Partner A what his valuation of the enterprise's inventory was in a case to dissolve the partnership. Because he placed a far lower value on that inventory than did Partner B, Partner B (who planned to continue in the import-export business) was happy to accept A's valuation, offering to purchase it from him on the spot (and agreeing to a lower valuation of the good will of the partnership business than he'd earlier been prepared to acknowledge).
a property damage case settled when I asked the Plaintiff, in separate caucus, what he planned to do with the proceeds of the settlement. The defendant, who "knew someone in the business," was able to obtain the item Plaintiff wanted at a lower cost than Plaintiff could have procured it, bridging the gap between the parties' negotiating positions.
a patent infringement case settled when I asked the Plaintiffs what they were afraid would happen if they agreed to give the alleged infringer a license to manufacture and market the allegedly infringing product. Plaintiffs said they believed the market would "get really hot" in three years time, allowing the infringer to make a killing on their technology. When I asked the defendant what he thought about Plaintiffs' suspicions, he said he planned to phase the product out of his product line within three years. I suggested that the defendant agree to a graduated royalty which would require him to pay an unusually high percentage of its sales during the years Plaintiffs were convinced he'd be selling "their" product and at a time when Defendant swore he would not.
In a lemon law case, I asked the Plaintiffs to tell the mobile home manufacturer to explain why they'd purchased the $200,000 vehicle in the first place. Plaintiff's answer so undermined the defendant's "buyer's remorse" theory of the case that the matter settled quickly thereafter.
I asked a perplexed defendant why the Plaintiff had chosen to sue it out of the entire universe of Plaintiff's competitors. Defendant quickly responded: "because we have better people, more talent and potentially better technology. Plaintiff wants to remove us from the market" I thereafter brokered a deal involving a joint venture between the two companies using company A's talent and company B's far larger distribution network.
As you can see from these few examples, diagnostic questions break impasse on "pure money" cases, as well as in those where the parties more or less obviously have something other than money to trade. Once again, it is critical to remember that no one wants money but everyone wants something that money can buy. Ask the ultimate reporter question about your negotiating partner's fears, desires, wants and needs -- WHY? -- and you will see impasse dissolving before your very eyes.
With apologies to "staying on topic" purists, I give my Lit Major readers the literary passage that comes to mind whenever I think too long about asking questions:
try to love the questions themselves as if they were locked rooms or books written in a very foreign language. Don't search for the answers, which could not be given to you now, because you would not be able to live them. And the point is to live everything. Live the questions now. Perhaps then, someday far in the future, you will gradually, without even noticing it, live your way into the answer.
I begin a series today on what I believe are the five most effective ways to break impasse. This morning's impasse-breaker will aid business people negotiating the settlement of a commercial dispute the most because it requires the generation of hitherto unseen business advantages to sweeten the pot.
Transform the dispute into an opportunity to make a business deal
Google’s CEO Eric Schmidt famously said that “litigation is just a business negotiation being conducted in the Courts.” If you look at litigated disputes in that light, the settlement option landscape immediately broadens. There are only certain remedies available in court or arbitration and those remedies may not be exactly what the parties are looking for.
If we remember that money is simply the means to obtain something else the parties desire – better distribution networks; insurance against future calamity; the security of knowing one’s intellectual property has not fallen in a competitor’s hands; health care; a college fund; even the acknowledgement that we have heard and understand our opponent’s point of view – we can add value to our negotiations before attempting to distribute it in a way that seems fair and just under the circumstances.
Often more important than finding commonalities between bargaining partners is locating those items that the parties value differently. A dollar may just be a dollar, but one company’s inventory, trade secrets or present pool of talent will seldom be worth the same in our competitor’s hands as it is in ours. In some cases our assets may be more valuable to another than they are to us, in which case we can choose the higher value as the central rationale for our proposal, remembering that where value is uncertain, the first party to put a price tag on it will “anchor” the bargaining range in his favor throughout the course of the negotiation.
Therefore, a savvy negotiator searches for both common and divergent interests in an attempt to put as many different options on the bargaining table as possible. Generating such options can melt impasse over hard “bottom line” dollar and legal position conflicts and transform a distributive negotiation session ("what I lose, you win and what you lose I win") into a business opportunity that will leave both parties better off than they could have imagined.
The book at right was brought to my attention for the first time by this highlighted text in Good Magazine:
In the foreboding world view of rational choice, everyone is a raging dirtbag.
What makes the Logic of Political Survival Relevant to negotiators is Bruce Bueno de Mesquita's application of game theory to international political problems such as the reduction of conflict between Israel and Palestine (quoted below).
First, de Mesquita's own words on the Middle East.
In my view, it is a mistake to look for [peacemaking] strategies that build mutual trust [between the Israelis and the Palestinians] because it ain’t going to happen. Neither side has any reason to trust the other, for good reason. . . .
Land for peace is an inherently flawed concept because it has a fundamental commitment problem. If I give you land on your promise of peace in the future, after you have the land, as the Israelis well know, it is very costly to take it back if you renege. You have an incentive to say, ‘You made a good step, it’s a gesture in the right direction, but I thought you were giving me more than this. I can’t give you peace just for this, it’s not enough.’
Conversely, if we have peace for land—you disarm, put down your weapons, and get rid of the threats to me and I will then give you the land—the reverse is true: I have no commitment to follow through. Once you’ve laid down your weapons, you have no threat.
The "rational" solution?
In a peaceful world, what do the Palestinians anticipate will be their main source of economic viability? Tourism. This is what their own documents say. And, of course, the Israelis make a lot of money from tourism, and that revenue is very easy to track. As a starting point requiring no trust, no mutual cooperation, I would suggest that all tourist revenue be [divided by] a fixed formula based on the current population of the region, which is roughly 40 percent Palestinian, 60 percent Israeli. The money would go automatically to each side. Now, when there is violence, tourists don’t come. So the tourist revenue is automatically responsive to the level of violence on either side for both sides. You have an accounting firm that both sides agree to, you let the U.N. do it, whatever. It’s completely self-enforcing, it requires no cooperation except the initial agreement by the Israelis that they are going to turn this part of the revenue over, on a fixed formula based on population, to some international agency, and that’s that.
It actually gets much more controversial and interesting than this -- the "kicker" to the headline in Good Magazine reads:
Can a fringe branch of mathematics forecast the future? A special adviser to the CIA, Fortune 500 companies, and the U.S. Department of Defense certainly thinks so
If that intrigues you, you'll want to read the entire article here. And you'll also want to read today's New York Times article on de Mesquita,
When 50-50 partners break up, the Closed Dutch Auction is an effective way to set the buyout price. The partners exchange sealed bids stating the price at which they will sell their 50% share. The highest bidding partner "wins" and buys out the "loser" at the "loser's" price.
The price set by each partner must be realistic, because if he "loses", the partner will have to sell at the price he set. Setting too low a price has a double adverse effect; the "losing" partner will be the seller at the lower price.
A friend recently reminded me of a book review I wrote for one of those "get rich" books The Go Giver (below) for the sorely-missed Complete Lawyer. I reprint it here in the Negotiation Blog because I talk a lot about the power of reciprocity in bargaining. I'd summarize my response here, but I can't say it any better than I did below.
The Go-Giver, A Guide to a Life Lived Richly
American business people have been writing self-help guides to financial success since Benjamin Franklin penned Advice to a Young Tradesman and Poor Richard’s Almanac. Business consultants Bob Burg and John Davis Mann add to this tradition a new parable -- The Go-Giver, A Little Story About a Powerful Business Idea.
As the title suggests, Burg and Mann recommend that we discard “go getting” -- hard work focused on individual success -- in favor of “go giving” – authentically passionate work focused on the success of others. To demonstrate how material wealth follows generous action, Burg and Mann create an elusive but legendary business consultant “Pindar,” who shares his Five Laws of Stratospheric Success with anyone who promises to practice these principles in all their affairs.
The pilgrim in this progress is “Joe,” an earnest and hard-working salesman on the brink of a third failed quarter. After promising to follow the laws Pindar teaches him, Joe meets a handful of spectacularly successful givers. These include former hot dog vendor Ernesto, who credits his restaurant and real estate empire to giving more than you take; Nicole, who owes her rise from school teacher to educational software titan to giving much to many; former insurance salesman Sam, whose many philanthropies thrive on giving without expectation of return; and, Debra, who learns to succeed in business by giving of her true self. Having quickly learned each lesson, Joe himself exemplifies Law No. 5 – the willingness to receive the bounty that flows from giving.
Unfortunately, as a guide to financial success, The Go-Giver is more fairy tale than instruction manual. All of the business icons Joe visits ascribe their riches to acts of authentic generosity. It is apparent from the context in which these stories arise, however, that the key here is neither virtue nor the inherent satisfaction to be found in giving. The key is choosing the right people to give to – those with wealth, monied connections or the power to create economic opportunities for others.
If we are moved to visit shut-ins; bring recovery meetings to incarcerated felons; or make micro-loans to third-world entrepreneurs, this book is not for us. This is focused giving and the focus is on the “haves,” not the “have nots.” If we are among the unemployed; the sick; or, the elderly, we’ll need another set of “Laws” for success – chief among them laws guaranteeing the education; training; and, health care necessary to enable us to make use of the opportunities created by the Go-Givers’ generosity. 
Walking the Razor’s Edge
Most Complete Lawyer readers are, however, the type of business people for whom The Go-Giver is written. No matter where we appear on the legal economic ladder, as educated people with access to the justice system, we are well poised to engage in random acts of kindness for, and reap rewards from, those who are well situated to spread a little green.  So long as we successfully negotiate the razor’s edge between opportunism and genuine acts of generosity, Burg and Mann’s advice will likely redound not only to our emotional and spiritual well-being, but also to our financial success.
Most readers will, of course, recognize Joe’s spectacular rise from failing salesman to coffee-bean multi-millionaire as the fairy tale the The Go-Giver all but announces itself to be. There is value here, however, in the quotidian acts of kindness in which Joe engages to satisfy Pindar’s requirement that he promptly practice the “Laws” conveyed.
The most credible results of Joe’s baby steps on the road to becoming a generous human being are his improved relationships with his fellows. Practicing “not keeping track,” Joe foregoes telling his wife his own work-a-day worries, focusing his entire attention upon the challenges of her day. His reward? An entirely believable note of love and gratitude on her pillow the following morning. Practicing “giving more value” than he receives, Joe serves coffee to his workmates as they struggle to meet a collective quarter-end deadline. Though Joe reports “feeling like an idiot” in doing so, it is clear that the warmth and bemused surprise expressed by is co-workers is its own reward.
The true lesson of The Go-Giver is not so much that material reward follows an expansive spirit, but that one’s daily pleasure increases with the size of one’s own heart. After all, when financial success eludes us – or crashes with the national economy – what we have to rely upon is not numbers on a ledger sheet, but the family, friends and neighbors who will see us through. If we give authentically without expectation of reward – because we “love to . . . as a way of life” – what we will reap is a life richly lived even if we do not thereby “get rich” in the process.
 As the Labor Department tells us, in the year 2000, “high school dropouts were more than twice as likely as high school graduates to be counted among the 31 million American “working poor” while only 1.4% of that number possessed college degrees. See A Profile of the Working Poor – 2000, U.S. Department of Labor, Bureau of Labor Statistics at http://www.bls.gov/cps/cpswp2000.htm. One’s existing occupation – the job we have been lucky or well-placed enough to be trained to do -- is also highly correlated with financial success or failure. As the Labor Department reports, “[a]lmost 31 percent of the poor who worked during the year  were employed in [low skill] service occupations . . . .,” including “[p]rivate household workers, a subset of service workers that is made up largely of women, were the most likely to be in poverty (20 percent)”. On the other hand, those engaged in executive, administrative, managerial and professional occupations had low incidences of poverty since “[h]igh earning and full-time employment are typical in these occupations.”
I reviewed with some dismay the July 12, 2009, post titled Mediators' Proposals: the Good, the Bad and the Ugly, which seemed to endorse counsel who deceive the mediator to push the negotiations to a mediator’s proposal./* I primarily litigate, but I devote a small percentage of my practice to serving as a mediator.
A mediator’s proposal can be a very effective tool for mediators and the parties to promote settlement when the negotiations have honestly and appropriately reached an impasse. The chance of the proposal generating a settlement, however, will increase greatly if the parties and attorneys respect the mediator and his or her opinion.
If the parties and attorneys respect the mediator, then they will respect the proposal, making it more likely that they will accept the proposal. Without respect, there is nothing more than a gambler’s hope that the proposal will be in an acceptable range. Further, if the lack of respect is mutual, then there is a risk that the mediator will subconsciously tilt the proposal in favor of the other side, which certainly will not promote settlement.
Every mediation has some elements of a game, but while the gamesmanship can involve concealment and even some sleight of hand, it should not devolve into deception. One example that has worked well where there is complete trust and respect between the mediator and at least one side is for that side to divulge the final offer near the outset of the session with the understanding that the mediator will have some latitude to dole out the total authority in bits and pieces with the hope of settling at or near that final number.
This is deceptive because the mediator is telling the other side that obtaining each “concession” is a hard fought battle, but it eliminates the risk of moving too quickly to the end game against an opponent who does not care what the opening number might be, but only wants to halve it (or double it) before the end of the day. This is deceptive because each private session with the side who divulged his or her final number creates an opportunity to discuss future vacations and how the kids are doing. If, however, the goal is to reach a settlement that works for all concerned and gives all parties a sense of accomplishment, then it is a fine tactic that promotes efficient negotiations, likely avoids altogether the need for a mediator’s proposal, and minimizes the fees of the attorneys and the mediator.
Candor and respect towards a mediator has an additional benefit that may not be of advantage to the immediate clients, but will promote productive future mediations on other matters. If I can tell my client that a particular mediator is good, that I respect that person, and will seriously consider everything that that person says, then the client is more likely to listen to what could be bad news about the case. This level of respect is rarely earned in the first session with a new mediator, but only after several mediations. Without candor and respect, the attorneys and parties just want to “win” without realizing that the cost of “victory” may be dearer than the settlement obtained through a positive and respectful mediation.
* Editor's comment: I did not mean to endorse duplicity on the part of counsel or the gaming of a mediator for the purpose of obtaining a favorable mediation proposal. I only meant to emphasize the fact that many attorneys can and do "game" the system, including as much manipulation of the mediator herself in the process.
-- Gregory Nerland
Akawie & LaPietra
1981 N. Broadway, #320
Walnut Creek, CA 94596
Manatt partner David Grinberg will discuss the negotiation of earnout provisions in M&A deals during a live webinar hosted by Strafford on July 14, 2009 from 1:00-2:30 Eastern. Grinberg will explain the types deals for which earnouts are appropriate and provide strategies for negotiating and structuring earnout provisions to reduce post-closing disputes. Grinberg will specifically address:
When are earnout provisions an attractive financing option for M&A deals?
What strategies have been effective for negotiating performance benchmarks in deals involving earnout provisions?
What post-closing concerns should buyers and sellers anticipate and address during deal negotiations?
What are the key tax issues to understand and consider when using earnouts?
savvy negotiators angle for an advantageous impasse rather than a settlement. Compromise is no longer the goal of the mediation exercise; instead it becomes a play to the “neutral,” whose power to craft the mediation proposal will make her the real decisionmaker:
In cases where the mediator’s proposal will be based on who will pay what, the parties — or worse yet, one party — will spend valuable time and effort constructing an impasse when, in the absence of a mediator’s proposal as a fallback, he might have actually achieved a compromise settlement; or
In cases where the mediator’s proposal will be based on the value of the case, no one has an incentive to be candid with the mediator — so positions become more important than interests; or
In cases where the parties aren’t sure what will drive the mediator’s proposal, they dig into their positions and hope for impasse — with the most likely result being a mediator’s proposal predicated on those positions.
A reluctant plaintiff will make a large jump if the money is really “on the table.” Defendants will come up with money they otherwise deny having, if it means that the case is really over. It also eliminates reactive devaluation.
For those who skipped social psychology in college, reactive devaluation is what every lawyer is taught in the first year of practice, if not earlier. "If the other side wants it," said my first mentor, "you don't, even if it seems like a good idea to you." With that admonition ringing in the ears of every litigator, the need for mediators is obvious. Given the dangers cited by DeGroote, however, the mediator's proposal may now be simply another way to "game" the mediator.
I have two short stories to illustrate the reason I re-direct the parties to bracketing when they ask me to make a mediator's proposal. But first, let me explain that I am one of those mediators who used my "proposal" option to put a number on the table I thought both parties would accept even though it would be a stretch for both of them. I usually tested these assumptions in separate caucuses by asking each side "if they came down to $X would you come up to $Y." When the numbers didn't overlap, I'd gauge how much pain there might be for both parties to bridge the gap, along with other entirely subjective opinions such as:
how invested each side was in walking away with a settlement that day
how firm each side was in their assertion that they would not go below or above a certain number
whether either attorney needed help in bringing a little more reality to their clients before the parties would be ready to accept a proposal by the mediator; and,
how much "street cred" I'd developed with the parties personally so that they'd accept my estimate of the settlement price-point even if they wouldn't accept their own attorney's advice /*
The first time I felt manipulated into making a mediator's proposal that wasn't the best both parties could do occurred at the close of a particularly fractious commercial mediation. In the presumed Zone of Potential Agreement , my proposal was high on the side of the Plaintiff because I felt that the defendant had more "give" than did Plaintiff's counsel.
I made my proposal and both sides accepted. When I walked into the defense caucus to tell counsel that he had a deal, however, I was met with a burst of laughter, the clapping of hands and the following statement: "I was prepared to take less; that's a great deal. Thanks so much."
Everyone Lies to the Mediator
That was the hardest lesson I'd had to date in the truism that EVERYONE lies to the mediator. You do not get to lie to the mediator twice, however, so I caution anyone who's feeling that she put one over on the mediator either to keep it to herself or never to hire that mediator again.
Still, I took a lesson from the attorney's merriment. I realized immediately that he was not the only, nor the first, attorney to manipulate me. He was simply the only one to let me know it. I don't like being manipulated. But that's what litigators are trained to do. We call it "persuasion." Still, I didn't like the look of my mediator's finger prints on that settlement, one that now appeared unduly influenced by my credulity.
So that's reason no. 1 -- an extremely strong reason no. 1 - why I don't' like to make mediator's proposals and why counsel might ask themselves whether they want to continue asking for them.
"If We'd Wanted a Third Party to Decide, We Would Have Arbitrated This Case"
The quote above is from an attorney who represented one of the parties in the largest and most sophisticated commercial case I've mediated to date. We were at the end of day two and the parties -- who had traveled great distances to meet in a neutral city -- were nowhere near a landing point. I was a sufficiently experienced mediator to land the case, but new enough to feel as if I'd run out of options when I suggested making a mediator's proposal.
"I didn't hire you to have a third party make my decision for me," said counsel. "If you want to get the parties closer together, why don't you suggest a bracket?" (for a explanation of bracketing, see my colleague Ralph Williams' article Introducing Deal Points - the Basics.)
I'd used brackets as a means of testing the parties' true distance before that day ("if he went to $X would you come down to $Y?") but I'd never made a mediator's proposal that was a bracket, i.e., "I suggest that the defendant put $X on the table if plaintiff will reduce its demand to $Y."
Although we didn't settle the case that day with a bracket (it took four full months of follow-up telephone negotiations to do that) I took counsel's point to heart. The parties don't hire me to make a decision for them. They're much happier when they get to make the decision themselves. Even though the parties do decide whether to accept the mediator's proposal, it hasn't come to them as the result of their own hard work. That being the case, the agreement reached is far less durable (subject to failure based upon nit-picking deal points after the agreement has been reached in principle) and far less satisfying than one achieved without the mediator's thumb on the scale.
I decided to stop making mediators' proposals more than two years ago. In all that time, however, I've never refused to make one. Rather, I've suggested alternative ways of achieving resolution, at least one of more of which settled the case in every case where the parties asked for a mediator's proposal.
I'd like to hear thoughts on these points -- manipulation and party satisfaction -- from my litigator readers as well as my mediator readers.
* I say this with the following caveat: I would never attempt to influence clients to do something other than what their attorneys advise. From time to time, however, the attorney needs to make the mediator the "bad cop" in the negotiation so that the client will not feel as if the attorney is no longer fighting for his interests. I only play "bad cop" with the attorney's advice and consent. My job is to get the settlement concluded making the attorneys look good, not bad.
When last we left Ari and Terrence negotiating Ari's compensation Terrence had ceremoniously offered Ari "NOTHING!!!"
But we're not talking only money here. We're talking power and agency in the psychological sense, i.e., agency as the capacity to control one's own future. Before the "nothing!!!" offer, Ari had told his wife he was still "afraid" of Terrence even as she attempted to prop him up by reminding him that he was Terrence's partner now. Although Ari wants control of the agency, his strength falters when Terrence comes back from a seven-year sabbatical.
Ari's discomfort in the scene below is palpable. Terrence asserts his authority ("I hope you're not planning to expense the Bat Mitzvah to the agency"); implies that Terrence's daughter had better instincts for talent at eight years old than Ari has now; and, previews his plan to take over Ari's five-year relationship with the talent of the hour -- Vincent Chase.
Ari is dealing from a position of psychological if not actual weakness. Having Terrence back on the scene is a little like going back home for the holidays after a few years at college. You feel independent but it takes only a few minutes with your parents to revert to your powerless teenage self. The final blow to Ari's self-esteem below is delivered in the form of a "gift." $50,000 for Ari's daughter's Bat Mitzvah. Ari is fifteen years old again.
Sensing Ari's weakness, Terrence moves to consolidate his power by taking over a staff meeting from which he excludes Ari. But Terrence has over-played his hand. Using Terrence's violation of the agency's folkways ("you embarrassed me in front of my troops") Ari pries an apology out of him and wins his first battle over who can summon the other's attendence by fiat.
When Ari returns to the negotiations, he has re-set the bargaining table in a way Lax and Sebenius in 3-D Negotiation would applaud. The subject of the negotiation is no longer Ari's share of the profits, but the value of the company itself and Ari's share in it. Note how Ari takes credit for the lion's share of the company's present value and emphasizes the company's vulnerability if Ari leaves.
The deal is sealed but the check unwritten and Terrence has no intention of fulfilling his promise when he learns that Ari intends to open his own agency, (tortiously) raiding Terrence's shop of its agents and clients. In a remarkable power play, Terrence brings together the "five families" Hollywood, to threaten Ari with ruin if he so much as offers CAA's mail room boy a paid position. Quick on his feet, Ari accuses Terrence of anti-Semitism (making Terrence the member of an "out group") and then promises not to touch any agency's clients other than Terrence's.
With no money to open his new agency, Terrence's agents are not inclined to follow Ari until an unlikely partner offers to fund his venture, below.
As Lax and Sebenius instruct:
3-D Negotiation involves not one, but three dimensions, all of which are in play more or less concurrently throughout an[y] effective negotiation[:] 1. Tactics 2. Deal design 3. Setup.
Deal designs, say the authors, create lasting value.
Smart people working at the drawing board can . . . discover hidden sources of economic and noneconomic value, then craft agreements -- design deals -- that unlock that value of the parties involved.
In the Entourage negotiation, Ari unlocks his own value when he finds the courage to leave the safety of Terrence's agency and open his own. By episode's end, Ari has changed the players, the subject matter of the negotiation and the balance of power in town. This is 3-D negotiation at its finest (even though it also rolls out at its most shameless).
All of that said, don't miss the opportunity to appreciate Ari's "at the table tactics" in negotiating the sale of his interest to Terrence. He enters the room confidently, refuses to permit Terrence to use his old power plays ("save a tree; say it out loud"); re-anchors Terrence's $4 million open with "my counter is $#@$ you"; explains his own value; diminishes any claim Terrence might have to the present value of the agency; signals his firm willingness to walk away; and, demonstrates his commitment to stay away in the absence of a realistic offer ("I have a rich wife who loves to spoil me"). The power shifts and the deal is done in two minutes flat.
Yes, it's Hollywood. But all good fiction, which Entourage certainly is, rests on hard facts, all of which are brought vividly to life here.
I was reading a great article in the New York Times this morning about "blue sky" transparent diplomacy in light of Obama's Cairo speech and was intrigued by the phrase "constructive ambiguity" in international diplomacy.
One is, don’t tell lies. The other is, you can say more in private than you can in public, but they have to be consistent.
This brought to mind not simply the one or two memorable instances in which I caught mediators in deception during my litigation practice, but a recent experience communicated to me by a friend about one of those $15/K a day mediators. I ask for the full 411 on these mediations because I'm intrigued by the value $15K/day buys. Here's the story.
My friend called me during a recent mediation to tell me that his mediator had just left the room after leaving this message with his "team."
Your opponents just asked me to make a mediator's proposal of $X.Y million.
Assuming that this disclosure was not a breach of confidence, I had to ask myself whether it was simply a (manipulative) hypothetical "offer" approved by the other side in form and content that the other side could safely disown. In either case, I felt it was (a) unethical - i.e., a breach of confidence; or, (b) partial (not neutral, which is also unethical).
Someone could likely talk me down off the ledge on this one but I'm having trouble seeing it as permissible mediator behavior. Assuming it wasn't a breach of confidence, it raises the question whose ox is being gored here? How much manipulation by the mediator is acceptable - is ANY manipulation acceptable and if the mediator is manipulating, is it POSSIBLE for him/her to do so without also being PARTIAL?
I have "caught" mediators in deception during my practice (and have not been quiet about my experience). In case mediators do not recall legal practice, let me remind them that counsel talk to one another and despite our differences usually trust one another more than we trust our mediator. If you lie to one of us or disclose something you shouldn't be disclosing, don't let the separate caucuses in which the mediation is taking place mislead you about the state of "play" in the litigation. If the mediator is dishonest, will be found out.
If we do not hold ourselves to the absolute HIGHEST POSSIBLE ethical standards, our credibility, and our careers, are seriously at risk.
How do we know that people are bad negotiators? For more than 30 years, theorists have been devising little bargaining puzzles. In these very simple problems, people routinely leave money on the table. Routinely fail to make the best possible deal.
Why? There are many types of answers, and my expertise is looking at how people failed to manage the process of both expanding the pie, creating value, and demanding their fair share of the pie, claiming value because they failed to comprehend their strategic position.
The process of managing or mismanaging the creating/claiming value process has been extensively studied, starting in the 60's with Walton and McKersie's A Behavioral Theory of Labor Negotiations.
One explanation of why people are bad negotiators, something Bob Mnookin stresses, is that people often look past their interests in common and go directly to undue focus on adverse interests.
We have all heard the term "win win", but what does it really mean? Bob Mnookin talks about the Program on Negotiation, an executive training program at Harvard.
I would not ordinarily post a power point presentation that is someone else's marketing vehicle. Nor would I generally post a power point that is meant solely for the benefit of one side of any dispute (here, plaintiffs' personal injury attorneys). I read though the entire lengthy presentation, however, and thought it contained some good tips over a broad range of issues that could well be useful to attorneys, clients and mediators in settling personal injury litigation involving the use of structured financial products. So with all disclaimers considered given (not my opinions; don't vouch for accuracy, etc.) I uploaded the below presentation for anyone who might find it a useful jumping off point in this complex arena (i.e., it invovles arithmetic if not actually mathematics!)
If you're worried about your law job becoming -- as they say in Britain - "redundant" or if you've already been laid off due to the recession, join Lawyer Connection which was born today as the result of a twitter conversation I had with Gwynne Monahan (who you can follow @econwriter).
Here's an exploration of what a mutual aid group is from the viewpoint of a social worker -- which speaks to me because I lived through my first husband's MSW in Social Work studies before he lived through my Law School experience (an eventual relationship-killer).
Mutual aid as group work technology can be understood as an exchange of help wherein the group member is both the provider as well as the recipient of help in service of achieving common group and individual goals (Borkman, 1999; Gitterman, 2006; Lieberman, 1983; Northen & Kurland, 2001; Schwartz, 1961; Shulman, 2006, Steinberg, 2004; Toseland & Siporin, 1986). The rationale for cultivating mutual aid in the group encounter is premised on mutual aid's resonance with humanistic values (Glassman, 2002) and the following propositions: 1) members have strengths, opinions, perspectives, information, and experiences that can be drawn upon to help others in the group; 2) helping others helps the helper, a concept known as the helper-therapy principle (Reissman, 1965) which has been empirically validated (Roberts et al, 1999); and 3) some types of help, such as confrontation, are better received when emanating from a peer rather than the worker (Shulman, 2006). Mutual aid transactions that occur amongst and between members stimulate cognitive and behavioral processes and yield therapeutic, supportive and empowering benefits for the members (Breton, 1990;Northen & Kurland, 2001; Shulman, 1986, 2006).
Obviously, we're not pursuing the therapeutic benefits of a mutual aid society as social worker Cicchetti is. Having been a member of such a group (a community-based women's credit union in the early 1970's for instance) I can say that the experience is not only economically, but also personally, enriching.
Let's not wait for the economy to improve. Let's start improving it TODAY. We are the change we want to see in the world.
With so much emphasis placed on Getting to Yes, we often forget the power - indeed the necessity -- of saying "no."
Think of yourself in that iconic bargaining environment, the foreign bazaar. No matter how much of a buyers' market you're in, at some point, the seller must say no -- otherwise you'd just bargain him down to zero, or perhaps negotiate a deal in which he pays you to take the merchandise off his hands. Fortunately for negotiators everyone, the Getting to Yes guy -- William Ury -- has also written an entire book on The Power of a Positive No. As Time Magazine wrote at the time of "No's" release,
In The Power of a Positive No, Ury offers guidance on the flip side of reaching an agreement: how to deal with a situation in which you simply want to put your foot down. No is so often hard to say, Ury writes, because it highlights the "tension between exercising your power and tending to your relationship"--in other words, between getting what you want in the short term and keeping everyone happy for interactions down the road. People often err in one direction or the other, prioritizing either the relationship by saying yes when they long to say no or their own power by brusquely saying no and alienating the person they're dealing with. Then there is the ever popular route of avoidance--saying nothing at all and gaining neither what you want nor goodwill.
Assume, for instance, that you're selling software and your customer wants a broad indemnity agreement that amounts to a virtual insurance policy. You know the type. "I want to be indemnified for all litigation arising from my company's use of your software. It's non-negotiable. We'll pull out of the deal if you don't provide it to us."
Before saying "no, no, no" or feeling the need to temporize or mumble something unintelligible, determine whether your customer's demand is primarily being driven by need, desire, or fear. Here, the underlying interest is perceived need based upon fear of potential liability. Rest assured that your customer is not worried about everything. There's some particular danger lurking in the back of his mine or in the contemplation of the manager to whom he's reporting.
The diagnostic question is simple: "what type of potential liabilities are you worried about?" When your customer answers your question, the "yeses" your "no" can be sandwiched between are legion.
"We're always happy to craft an indemnity agreement that covers potential liabilities arising from, i.e., defects in the software that cause the type of harm you're worried about. In fact, because infallible software has yet to be developed, we like to offer our customers a suite of services to quickly remedy any "defects" to prevent the liabilities you're concerned with. And now that we're talking about it, let's define "defects" so that it fully expresses both of our understandings going forward.
The key is to slow yourself down during the negotiation so that you have time to reframe your "no" as an opportunity for both parties to get more of what they really want than they fear they need.
As a former pastor of mine once told me, "God never says 'no' to a prayer. S/he says 'yes,' 'later' or 'I have something better in store for you.' Approach the material world in the same manner as he does and not only your opportunities, but your heart, will grow in the practice.
I spent the day at an advanced mediation training session at the U.S. District Court in Los Angeles where I serve as a settlement officer. I came away troubled by the wide array of responses to questions concerning the mediator's "right" or "desire" or "need" to use deception in separate caucus mediation - the primary form mediation takes in Southern California litigated cases.
[C]onsensual deception is the essence of caucused mediation. This statement should not come as a shock to the reader when it is considered in the context of the nature and purpose of caucusing. Actually, it is quite rare that caucused mediation, a type of informational game, occurs without the use of deception by the parties, by their lawyers, and/or by the mediator in some form. This is so for several reasons.
First, a basic groundrule of the information system operating in any mediated case in which there is caucusing is that confidential information conveyed to the mediator by any party cannot be disclosed by the mediator to anyone (with narrowly limited exceptions). This means that: (1) each party in mediation rarely, if ever, knows whether another party has disclosed confidential information to the mediator; and (2) if confidential information has been disclosed, the nondisclosing party never knows the specific content of that confidential information and whether and/or to what extent that confidential information has colored or otherwise affected communications coming to the nondisclosing party from the mediator. In this respect, each party in a mediation is an actual or potential victim of constant deception regarding confidential information — granted, agreed deception — but nonetheless deception. This is the central paradox of the caucused mediation process. The parties, and indeed even the mediator, agree to be deceived as a condition of participating in it in order to find a solution that the parties will find "valid" for their purposes.
Second, mediation rarely occurs absent deception because the parties (and their counsel) are normally engaged in the strategies and tactics of competitive bargaining during all or part of the mediation conference, and the goal of each party is to get the best deal for himself or herself.
These competitive bargaining strategies and tactics are layered and interlaced with the mediator’s own strategies and tactics to get the best resolution possible for the parties — or at least a resolution that they can accept. The confluence of these, initially anyway, unaligned strategies, tactics, and goals creates an environment rich in gamesmanship and intrigue, naturally conducive to the use of deceptive behaviors by the parties and their counsel, and yes, even by mediators. Actually, even more so by mediators because they are the conductors — the orchestrators — of an information system specially designed for each dispute, a system with ambiguously defined or, in some situations, undefined disclosure rules in which the mediator is the Chief Information Officer who has near-absolute control over what nonconfidential information, critical or otherwise, is developed, what is withheld, what is disclosed, and when it is disclosed. As mediation pioneer Christopher Moore has noted: "The ability to control, manipulate, suppress, or enhance data, or to initiate entirely new information, gives the mediator an inordinate level of influence over the parties."
Third, the information system manipulated by the mediator in any dispute context is itself imperfect. Parties, rarely, if ever, share with the mediator all the information relevant, or even necessary, to the achievement of the mediator’s goal — an agreed resolution of conflict. The parties’ deceptive behavior in this regard — jointly understood by the parties and the mediator in any mediation to fall within the agreed "rules of the game" — sometimes causes mediations to fail or prevents optimal solutions from being achieved.
Thus, if agreed deception is a central ingredient in caucused mediation, the question then becomes what types of deception should be considered constructive, within the rules of the mediation game, and ethically acceptable and what types should be considered destructive, beyond the bounds of fair play, and ethically unacceptable. Or, perhaps more simply, in the words of mediator Robert Benjamin, in mediation what are the characteristics of the "noble lie" — deception "designed to shift and reconfigure the thinking of disputing parties, especially in the conflict and confusion, and to foster and further their cooperation, tolerance, and survival"? Because formal mediation is generally viewed as "nothing more than a three-party or multiple-party negotiation," we can begin to formulate an answer to this question by examining the current limits of acceptable deception as employed by lawyer-negotiators.
Mediators can assist parties in reaching a zone of possible agreement by making limited and heavily filtered disclosures of the parties’ private concessions that the parties disclose in caucus sessions (Brown and Ayres call this “noisy” communication).
I urge all my readers to comment, but particularly litigators like my husband who may not know what many mediators have apparently known for quite some time -- that they are making "filtered disclosures of the parties' private concessions" after promising to keep all separate caucus communications strictly confidential.
My husband assured me on the way home tonight that he will henceforth require all of the mediators he retains to guarantee him that they will not "signal" his negotiating positions, tactics or strategies to his bargaining partners.
As every lawyer knows and most students of high school geometry must learn in mastering "proofs," the answer often comes first, the rationale later. I used to say, "I'm a litigator, I can rationalize anything." As a mediator, my rationalizations have turned from the way in which facts can be shoe-horned into causes of action or affirmative defenses to the way in which harm arising from a dispute (including, most assuredly, the moral harm of injustice) can be monetized.
Now David Brooks in the New York Times (which appears to have disabled the "copy" function/1) tells us that philosophy has been sacrificed on the alter of emotion in his column The End of Philosophy.
As Brooks explains, reasoning comes after moral judgment and "is often guided by the emotions that preceded it." The good news is that those emotions are not merely competitive. Brooks again:
Like bees, humans have long lived or died based on their ability to divide labor, help each other, and stand together in the face of common threats. Many of our moral emotions and intuitions reflect that history. We don't just care about our individual rights, or even the rights of other individuals. We also care about loyalty, respect, traditions, religions. We are all the descendents of successful cooperators.
My mediation experience teaches me that the "soft" arts of influence, empathy, community-building, and prejudice reduction, are as important (and often more important) to the successful (i.e., satisfying) resolution of a lawsuit than our prized ability to parse the evidence, rationalize away the bad and privilege the good to sell our "proof" to judge or jury.
Most importantly, I find that when attorneys' clients leave a mediation with the belief that a certain rough justice has been obtained, they are more satisfied with the outcome, and with their attorneys' representation of their interests, than they might have been had they left with 10% more change jingling in their pockets.
The experts who study mediation tell us that "neutrals" don't make the difference between settling or not settling. The cases will settle with or without us. The difference mediators make is not settlement, but client satisfaction. Satisfied clients are an absolute necessity for a successful legal practice at any time. In these hard times, legal practices may fail in the absence of resolutions addressing the justice issues your client sought out a lawyer to resolve in the first place.
Money is the instrument. But justice is the issue.
You'll see from my lengthy comment there that Arnie is singing my song about the law and emotion and in particular, the fact that we cannot make decisions without emotion something every trial lawyer, negotiator, mediator and sales person knows down to the knuckles of their spine. Excerpt from Legal Sanity below.
Here are two facts:
There’s a client service deficit in the law.
Lawyers tend to regard emotions – their own and other people’s – as irrelevant to their work.
At first glance, these two facts seem unrelated. But they’re actually closely (even intimately) connected.
Some time back, I posted on the interplay of emotions and client service in this new era of customer control. I linked to a ClickZ article citing a (then) new book by Dan Hill called Emotionomics: Winning Hearts and Minds. Launching from the premise that humans are primarily emotional decision-makers, the book discusses how emotions factor into our business opportunities in the marketplace and workplace.
Picking up on this point from a slightly different angle, in a recent post, designer and marketing mentor Peleg Top says, Go ahead, get emotional. Top notes that, in marketing (and, I’d add, in providing) our services, “an effective way to generate action is to tell a compelling story, one that hits your customer’s emotions.” Suggesting that most service providers miss this mark, he observes . . .
As a mediator, the question I hear most frequently from lawyers is "How do I convince my opponent to sit down and negotiate without losing my competitive advantage?"
Believe it or not, the answer is transparency.
If you can remember way back to last July, when firms like Microsoft and Yahoo were still engaging in business as usual, you might recall that a merger fell apart because Yahoo was acting "weird." At least that's what Microsoft's chief executive, Steve Ballmer, told the Wall Street Journal.
"We had an offer out that was a 100 percent premium on the operating business of the company and there wasn't a serious price negotiation ... until three months later. It was a little ... weird."
Lawyers know that three months rushes by in the blink of an eye. The board of directors meets. It seeks an analysis from the mergers and acquisitions people, who consult with outside counsel's antitrust department, which renders a decision but whose members first have to chat with the tax guys. Then there are the IP people with whom to discuss license agreements and, of course, the managers in the human resources department, who may or may not have advice about executive parachutes - platinum, golden or brass.
And yet the Yahoo-Microsoft merger fell apart because Microsoft felt that Yahoo's delay was "weird."
Let's go back to what every trial lawyer knows. In the absence of information, people make stuff up. Weird stuff.
And the stories we tell ourselves about our uncommunicative commercial partners do not include one where the other guy is laboring day and night to fulfill our fondest desires. No. In the absence of information, we weave elaborate conspiracy theories in which our opponents are scheming to fleece us of our rights, obstruct our prospective economic advantage and turn our world upside down.
Your dentist can tell you what your opponent wants to be told. A fully illustrated pre-game outline of the upcoming procedure that goes something like this "First I'll put a little numbing cream on your gum. That way the shot of Novocain won't hurt too much. Then I'll drill," she'd say, holding the fearful appliance up and switching it on. "It may sound louder in your mouth than it does here in my hand, but I'll only have it on for about five minutes, after which ... etc., etc."
So how do you get your opponent to the bargaining table without sounding weak?
You say "Listen, Ted, I know both our clients believe their cases are as good as gold but after an initial round of discovery, it's my practice to call a timeout to discuss settlement."
"How does that sound to you?"
Ted says it sounds all right. Which it does. Because Ted's got three incredibly acrimonious cases in his practice right now. Last year, one of his adversaries served an ex parte application with three bankers boxes of exhibits the day before Christmas. At 4:59 p.m. And she scheduled the hearing for hearing on the day after Christmas. Sure, the judge would deny it, but Ted couldn't assume anything. He worked 15 hours on Christmas Day.
So it sounds good to Ted.
More important to your own litigation plan, your opponent has just agreed to come to the bargaining table, even though the actual meeting won't be held for several months. When the appointed hour arrives, you will not have to ask for a settlement conference at a time when it might show weakness on your part. It's part of the plan.
Challenges to good faith settlements that cut off the rights of non-settling defendants to seek indemnification and contribution from settling defendants are nearly always doomed to failure. Trial courts are understandably eager to clear their dockets and there's no docket-clean-up pitcher like the first defendant to settle. Deny the motion and bring a settled defendant and his trial-ready resources back in to the litigation when the first defendant-domino has just successfully toppled over? Not likely, my friend. Not in the trial court at any rate.
These motions are so difficult to oppose that I've seen a target defendant threaten a marginal player (my client) with sanctions just for challenging the target's very low six-figure settlement in an eight-figure antitrust action.
Best quotation: "The hospital contends that the physicians‟ $200,000 settlement -- representing 2 percent of plaintiffs‟ $10 million damages estimate -- was so far out of the “ballpark” it was not even in the parking lot." With a first runner-up to "If section 877.6 is to serve the ends of justice, it must prevent a party from purchasing protection from its indemnification obligation at bargain-basement prices."
The Court of Appeal relied upon the following "facts" in finding that the trial court abused its considerable discretion in granting a good faith motion to defendant physicians in light of defendant hospital's opposition.
payment of $200,000 in settlement for a $10 million claim, which the appellate court found to be "wholly disproportionate." As the Court opined "[e]ven a slight probability of liability on [the settling doctor's] part would warrant a contribution more significant than 2 percent."
the "evidence" supporting the court's finding that the settling physician's probable fault was "not de minimis," which appears to have been based upon Plaintiff's attorney's fault analysis (not generally known for its unbiased nature) and the physicians' counsel's candid (?) suggestion that his clients' contribution to a global settlement might be in the range of $1.5 million;
the availability of $2 million in coverage, which "militated against a good faith determination" because the settlement constituted only 10% of available policy limits [carrier alert here!];
the non-settling Hospital's contention that the physicians and their attorneys engaged in "bad faith tactics" during two mediation sessions -- a factor the appellate court acknowledged it was barred by mediation confidentiality from considering -- but which it neatly avoided by concentrating on post-mediation negotiations; /*
the timing of the physicians' settlement offer, which suggested to the appellate court that their "reason for entering into the settlement with plaintiffs was to cut off the hospital's . . . right to indemnity from the physicians" (I thought that was a legitimate reason to settle litigation but see the Court's citation to Mattco Forge, stating that when a defendant “enters into a disproportionately low settlement with the plaintiff solely to obtain immunity from the cross-complaint, the inference that the settlement was not made in good faith is difficult to avoid.” Mattco, supra (emphasis added); and,
a consideration I've never seen defeat a good faith motion before - that a settlment "dictated by the tactical advantage of removing a deep-pocket defendant . . . is not made in 'good faith' consideration of the relevant liability of all parties. . . ." (leading to the question whether we're now required to consider the interests of clients other than our own in entering into a settlement agreement on a contested claim)
If this case isn't depublished (an unfortunate California practice) or taken up for review, it will bear re-reading and deeper thinking about the stategy and tactics of breaking away from the mob to cut a separate deal beneficial to one's own client without "consider[ing] . . the relevant liability of all parties . . . "
*/ This is a good place to note the importance of either indicating in the parties' post-mediation written negotiations that the mediation is continuing (hence the communications remain absolutely protected) or that the mediation has concluded (hence bringing those post-mediation settlement negotiations outside the scope of the strictly enforced mediation confidentiality restrictions).
The research subject of the article suggested that having a more flexible approach to resolving an acute conflict interaction results in more frustration and anger.
I'll need to see the study itself to be convinced. The study described merely suggests that people offering a greater number of solutions to a party pre-instructed to stonewall will become angrier than those offering fewer solutions, i.e., that those who persist in trying, and failing, to resolve a conflict, get more and more angry and frustrated than those who give up more easily.
This does not suggest to me that "greater negotiation flexibility" necessarily results in a greater degree of anger in the negotiation dyad, but only in the person attempting to resolve a dispute that his partner has been instructed to resist. Though an apt description of the adversarial process, this is not a fair depiction of persistent attempts to negotiate resolution where the negotiators are given a fighting chance of closing a deal.
As the article explained, study participants were told that a neighbor was playing music too loudly and instructed to ask that it be turned down.
During the interaction, the [participants] followed a script of uncooperative responses such that the task could not be resolved.
"We categorized the verbal responses of participants during the task into seven types of negotiation strategies, including problem-solving and aggressive/threatening. Individuals who used a smaller set of strategies were considered less 'flexible' than those who used a greater variety of strategies," Roubinov said.
The [researchers] . . . also looked at the intensity of participants' facial expressions of anger or frustration, and measured participants' biological response to the task using cortisol, a stress hormone.
"Our results indicated that greater flexibility may not be the healthiest approach," Roubinov said. "Unlike less-flexible participants, those who tried a greater variety of responses showed more intense facial expressions of anger and frustration. Cortisol levels in more flexible participants also reflected an unhealthier biological response to stress than the less flexible participants."
Of course persistent participants become increasingly frustrated (and angry!) when their multiple suggestions to resolve a dispute are met with stonewalling from their negotiation partner. This doesn't suggest, however, that "greater [negotiation] flexibility" is not healthy. It suggests that stonewalling leads to anger, one of the reasons that mediators are employed to help all participants in a negotiation generate potential solutions.
I'll look forward to seeing the study when it's released but based upon this article, I'd say the conclusion drawn is misleading broad and unduly pessimistic.
Because these parties couldn't agree on what year it is, however, no one balks at my suggestion that we write up the entire deal -- settlement agreement with mutual general releases; the Stipulation for the Entry of Judgment; and, the proposed Stipulated Judgment itself.
The first problem is everyone's failure to bring a form Settlement Agreement and Mutual Release, let alone one that included enforceable terms for the entry of a Stipulated Judgment in event of default.
ADVICE??? Carry these documents on a "flash" or "jump" drive whenever you're going to a settlement conference or mediation. Heck, carry them with you to the first day of trial where you might be startled to learn that your adversary is prepared to settle the case right now!
Fortunately, I had access to my own files which contained detailed forms for everything we needed, forms I offered to counsel as guides. I did so only with the express understanding that I did not recommend my own forms as adequate, complete or enforceable.
I'm just the mediator, not the legal representative of the deal in loco parentis.
It's a good thing we made the effort to fully document the deal because it threatened to fall apart over all of the following terms:
the dismissal of ancillary proceedings
forbearance from inducing future actions by non-parties
liquidated damage clauses for the breach of certain critical deal points
indemnification for future actions if induced by certain of the parties
Each of these items required separate negotiation and compromise and as to each I helped the parties calculate the degree of possible misbehavior by their adversaries and the protections that might "fit" the probable harm. I do not believe the parties would have been able to resolve these terms (as well as others too confidential to mention) without third party assistance. One was so difficult to predict both the series of possible events and potential remedies that we provided for arbitration of that term alone in the event of alleged default.
When we all finally left the building at one in the morning, we had fully completed paperwork, signed by all parties in hand.
And yes, I was the only one present who could type.
The anger, suspicion and ill will that has characterized the first eight hours of this mutli-party, eight-figure antitrust mediation is about to heightened as I deliver Defendants' terms: they will pay the settlement agreed upon in six equal yearly installments over three full years without any security to back it up.
Are you wondering what your mediator is thinking at times like this?
That "thought" is momentary, however, like the cry you squelch when the trial judge does something like, say, grant the other side's motion to disqualify your expert witness during the second week of trial.
I don't have a plan, but I do have ideas. Just as my suggestion that we use a bracketed offer to break impasse had eventually done just that, I'm already thinking of ways that the parties' most intractable and conflicting positions might move them toward agreement.
"They can wait," defense counsel is saying, "or they can try the case in February and see if they can collect it," to which a principal adds, "this puts them on our side for a change. If we make the money we believe we can, they'll benefit too."
"I thought you said you knew you could," I say, laying groundwork for the contingency ahead.
"Yes, absolutely. We know we can."
Back in the Plaintiffs' caucus room, the parties and their counsel aren't simply angry; they're flabbergasted.
"They sand-bagged us," says Plaintiffs' counsel. "We'll report this to the Judge. They didn't come here in good faith. They're deliberately wasting our time."
After some calming discussion about why the cash-poor defense would deliberately pay their own attorney and one-half of my daily fee in bad faith . . . a question to which no answer ever eventuated . . . Plaintiffs and their counsel begin to confidently predict the defense's inability to make a single installment payment. Plaintiffs believe the defendants have resources - secreted away somewhere - but will never use them to settle this case.
When the temperature of the room has diminished to that of the sun's surface rather than its core, I ask about the possibility of a stipulated judgment in the event of default.
"In a sum you hope the jury will award you at trial," I proffer. "If you're right; if they have no intention, nor any ability, to pay even the first installment, you'll be in the same position on default that you'd be in if you prevailed at trial. And if they're capable of paying, they're much more likely to do so if the alternative is a mutl-million dollar judgment against them."
Though the total sum of the Stipulated Judgment is the main topic of discussion over the following two hours, the parties' insistent conflicting predictions for the future make it all but inevitable they will eventually reach agreement. If the defense never pays, the Plaintiffs will have their judgment more or less immediately, without the burden of proving it up. And if the defendants are good for their word that they can service the "debt" the settlement agreement creates, they never have to worry about this potential judgment becoming a reality.
Often, a major obstacle to reaching negotiated agreements concerns negotiators' beliefs about some future event or outcome. Impasses often result from conflicting beliefs that are difficult to surmount, especially when each side is confident about the accuracy of his or her prediction and consequently uspicious of the other side's forecasts. Often, compromise is not a viable solution, and each party may be reluctant to change his or her point of view.
Fortunately, contingent contracts can provide a way out of the mire. With a contingency . . . differences of opinion among negotiators concerning future events do not have to be bridged; they become the core of the agreement. . . . [Parties] can bet on the future rather than argue about it.
Here, the agreement calling for a Stipulated Judgment of sufficient size to deter default, allowed the parties to:
bet on rather than argue about their different forecasts for the future;
As you'll recall, we're in hour nine of the mediation. The parties have finally agreed to settle the antitrust litigation the Court ordered them to mediate ("we won't settle; we'll only be here for an hour").
Defense counsel wants to write up the "deal points" and make a quick getaway. Before she does so, we have the following conversation.
"We'll need three years to pay it."
I fake calm.
"Your security?" I ask, my mind racing to the other room where an already unhappy set of plaintiffs are sitting.
"We don't have security. I told you my clients are broke. I also told you we'd need terms but you didn't want to talk about them."
This is true. From hour one the defense insisted they'd need to pay over time and the Plaintiffs wanted to know what terms the defense was thinking of. Throughout the day I'd told them both the same thing: "let's see if we can agree on a number before we start talking terms."
I have reasons for this. They are as follows:
once people have agreed upon a number, it's far more difficult for them to walk away from a deal; the Plaintiffs have already begun to think about what the money will mean to them and the defense has begun to imagine life without the litigation;
people are risk averse. So long as there is no (or only minimal) money on the table, it's easy to refuse to engage in the often difficult process of readjusting their expectations and compromising their desires. When there's enough money on the table to make both parties want to settle, walking away involves loss.
This is often the trickiest part of the mediation. The three-year time table and absence of security is, I know, enough to blow up this deal. I'm going to take heat from the Plaintiffs' side, for resisting their efforts to learn the Defendants' terms before they spent an entire day agreeing upon the price. I don't, however, regret my decision. If these terms cause the negotiation to break down now, they certainly would have done so in hour one.
How I help the parties negotiate what is poised to become a rancorous impasse in the next post.
It's 8 p.m. and you've just spent nine straight hours negotiating the settlement of complex commercial litigation with multiple parties that was filed before George Bush first took office. The case has been up on appeal twice and is now scheudled for trial in February. All defendants but the final three standing have settled. Three of the principals have flown in from out of state and two of the attorneys have driven a few hundred miles to Los Angeles from their home towns.
"Let's just write up the deal points," says Lawyer No. 1, yawning. "We can write up the full agreement over the long weekend."
Lawyer No. 2 turns to me and says "Judicate West has a form, right? Let's use that."
IT IS HEREBY STIPULATED by and between the parties through the respective counsel or representative of each that the above-referenced case has been settled according to the terms memorialized herein below. This document is binding on the parties and is admissible in court pursuant to Evidence code section 1123 and enforceable by motion of any party hereto pursuant to CCP section 664.6.
In order to facilitate the above specified terms of settlement, the parties further agree that on or before the day of they will execute or change the following:
Settlement / Release Agreement Prepared by _____plaintiff_____defendant
Request for Dismissal Prepared by _____plaintiff_____defendant
All relevant parties must sign below. Copies are acceptable in lieu of originals.
I know. You didn't expect the case to settle. At least that's what I've been hearing you all tell me since hour one of the mediation. But now we're in hour nine and the basic deal points have been reached. It's January 15. Trial is in 30 days. You have all the parties present and the mediator who has by now sussed out the BS; developed a good working relationship with all sides of the dispute; knows how hard the parties worked to get here; and, is unlikely to let the "devil" in the details sink the settlement ship.
Anyone who's been living in outer Mongolia for the past couple of years should head on over to Adams Drafting straight away. Why? Because once you negotiate the best deal you can, you have to write it up on the best terms you can. Hence the need -- yes need -- for Adams' Drafting.
This gives Ken Adams an opportunity to address the question whether it's ever beneficial to purposely include ambiguity in your contracts -- a question I'd answer after nearly a quarter century of contract litigation practice with this -- sure, if you'd like to put my husband's and my grandchildren through prep school and college. Otherwise, not so much.
But don't take it from me. Go see what the master of contract drafting says.
FORUM (FORUM & FOCUS) • Jan. 08, 2009 Every Case Is a Winding Road
By Victoria Pynchon
I have a confession to make. I am about to become embroiled in litigation. Though I preach the religion of negotiated resolution, I've nevertheless hired litigation counsel to assert my rights and pursue my remedies.
This is one of those moments when the rubber of our ideology meets the road of personal circumstance, the moment we are called upon to decide to walk our talk or take the more familiar road.
For more than 30 years - first as paralegal, then as a law student and finally as a commercial litigator - I'd been swimming in the waters of legal rights and remedies. The adversarial ocean had become so familiar a habitat that it rarely occurred to me that I was under the surface. One day toward the end of my first year of mediation practice, a much more experienced friend hooked me by the cheek and threw me on the deck of his ship, where I was gasping for air.
He'd asked me to co-mediate a will contest without the benefit on my clergy - lawyers with experience in the field. The "fish out of water" conversation that ensued went something like this:
Joe Mediator: "The family doesn't want to hire a lawyer. They just want to mediate."
Vickie: "But I know absolutely nothing about wills, trusts and estates. The parties need to talk to a lawyer first to learn their rights and remedies."
Joe: "You still don't get it, do you?"
Vickie: "Get what?"
Joe: "It's not about rights and remedies. It's about interests."
Vickie: "But how can they evaluate their interests without knowing their rights and remedies?"
Joe: "Because they're not interested in what the law says - they want to do what they believe is right for them as a family under the circumstances."
These people wanted to resolve a legal dispute without knowing their legal rights? Were they nuts? I understood "interests" - they were all the rage in ADR circles - the desires, fears and needs of the parties that drove them to take legal positions. Sometimes those interests were non-economic - the need for revenge, the desire to be personally accountable, the fear of failure, the hope for forgiveness and reconciliation. Others, though economic, could not be remedied by way of damages - better access to foreign markets, for instance, or wider distribution chains; the acquisition of better manufacturing processes; or, the retention of executives with "pull" in Washington. But all of those matters were secondary to legal rights and remedies, weren't they? You had to know what your rights were.
the economists David Hemenway and Sara Solnick demonstrated in a study at Harvard, many people would prefer to receive an annual salary of $50,000 when others are making $25,000 than to earn $100,000 a year when others are making $200,000.
Why? Because we "care more about social comparison, status and rank than about the absolute value of our bank accounts or reputations." In other words, we're more concerned with justice (fairness) than we are about the money. Which is why our clients have sought out our help with their personal, financial and commercial problems -- because we're in the justice business. When we understand this, the negotiation of financial settlements becomes a whole lot easier because there are many more ways to deliver justice than by throwing money at it.
Are mediators being hook-winked by clients who create artificial impasses for the purpose of procuring a favorable mediator's proposal? Does the mediator's recommendation carry so much weight that the parties are subject to a manipulated mediator's proffer? Does the mediator become just a tool of a party bent on flim-flam? Or is all distributive bargaining flim-flam?
I understand some lawyers are settling all their cases with mediators' proposals. Why is that? Are they savvier than their colleagues? Or do they just need the authority of the mediator to "sell" settlement to their clients?
Jump in here or over at John's place. Whether you're a mediator, a litigator, or a client, we'd both appreciate your fresh ideas.
Psychologists tell us that we are not only "meaning making" beings, but that we are all born conspiracy theorists. Viewing a field of nonsensical, unrelated data, we naturally begin to "connect the dots" - to organize the information into a coherent, and often compelling, narrative.
Pattern making or conspiracy theorizing is a human survival mechanism. We have never been the fastest or the biggest creatures on the planet. We don't have the sharpest teeth or blend in all that well with the scenery. Our soft, easily punctured skin is not covered with a protective shell. In a pinch, we can't take a running leap and fly away from land-bound carnivores who might make us their prey.
We are, however, the canniest creatures on the planet. To avoid the tiger who made lunch of our best comrade, we surveyed the scene and committed the pattern of otherwise unrelated details to memory. Five banyan trees, a narrow stream, and, a pile of rubble left by a recent avalanche means "there are tigers here."
Couple this with Fundamental Attribution Error and you have all of the ingredients necessary to blame inadvertently caused harm on elaborate conspiracies cooked up by our untrustworthy companions - Fundamental Attribution Error being our universal tendency to over-emphasize the role of others' negative personality traits to explain why harm befell us.
So it is with our legal adversaries. Once the channels of communication have been severed by the filing of a lawsuit, attorneys and clients alike begin to make up "what really happened" based on predispositions, scattered conversations, faulty memories and scraps of documentation.
More than 360 Connecticut homeowners have avoided foreclosure in the past five months thanks to a new mediation program established by the state, but some think it’s still being underutilized.
The program, which was part of comprehensive mortgage relief legislation passed earlier this year, allows borrowers to meet their lender face-to-face to try to reach a settlement on an overdue mortgage.
If the borrower chooses mediation, lenders are required to participate and the process can delay foreclosure by 60 days or more.
Some lawmakers have touted the program as the first of its kind in the country.
About 28 percent of the estimated 5,513 homeowners who are eligible for the program have applied for mediation, and 361 people have reached a settlement that allowed them to keep their home. Another 116 homeowners decided to leave their home but were able to reach an agreement with their lender to pay off the balance of their mortgage. Mediation remains unsettled in 203 cases.
“All of us familiar with the program would like to see more people participate,” said Ann Parent, an attorney for the Connecticut Fair Housing Authority. “We don’t know why more homeowners aren’t requesting mediation, but we feel like more should.”
Parent said she supports the program and agrees that it is serving an important purpose, especially for homeowners who can’t afford a lawyer to guide them through the foreclosure process. At the same time, however, she said it’s unfortunate that less than 30 percent of eligible homeowners are using it.
If you’re a beginning female entrepreneur or a women who is thinking about starting in business for herself, you have found your tribe. You have arrived at a safe place to talk about business. Especially if you are 35-55 years old, you are going to love this site because that’s a magic age time. You really discover who you are during those years and finally decide to do what you love instead of just what you’re “supposed” to do. The spirit of that revelation and all the promise it holds is why this site was created.
So let us begin anew -- remembering on both sides that civility is not a sign of weakness, and sincerity is always subject to proof. Let us never negotiate out of fear, but let us never fear to negotiate. Let both sides explore what problems unite us instead of belaboring those problems which divide us.
Let both sides, for the first time, formulate serious and precise proposals for the inspection and control of arms, and bring the absolute power to destroy other nations under the absolute control of all nations.
Let both sides seek to invoke the wonders of science instead of its terrors. Together let us explore the stars, conquer the deserts, eradicate disease, tap the ocean depths, and encourage the arts and commerce.
Let both sides unite to heed, in all corners of the earth, the command of Isaiah -- to "undo the heavy burdens, and [to] let the oppressed go free."
And, if a beachhead of cooperation may push back the jungle of suspicion, let both sides join in creating a new endeavor -- not a new balance of power, but a new world of law -- where the strong are just, and the weak secure, and the peace preserved.
All this will not be finished in the first one hundred days. Nor will it be finished in the first one thousand days; nor in the life of this Administration; nor even perhaps in our lifetime on this planet. But let us begin.
Still active is Molski's case in the Eastern District of California which was recently permitted to go forward by the same Ninth Circuit Court of Appeal. As the Ninth Circuit explained the factual background of Mr. Molski's "serial litigation,"
[Plaintiff] Molski and his lawyer Thomas Frankovich (“Frankovich”) were purportedly in the business of tracking down public accommodations with ADA violations and extorting settlements out of them. On cross examination, Molski acknowledged that: he did not complain to any of [the defendant's] employees about his access problems; he had filed 374 similar ADA lawsuits as of October 8, 2004; Frankovich had filed 232 of the 374 lawsuits; even more lawsuits had been filed since that date; Molski and Frankovich averaged $4,000 for each case that settled; Molski did not pay any fees to Frankovich; Molski maintained no employment besides prosecuting ADA cases, despite his possession of a law degree; Molski’s projected annual income from settlements was $800,000;2 Molski executed blank verification forms for Frankovich to submit with responses to interrogatories; they had also filed lawsuits against two other restaurants owned by Cable’s; they had filed a lawsuit against a nearby restaurant; and Sarantschin obtained up to 95% of his income from Frankovich’s firm for performing investigations for ADA lawsuits.
Despite these apparently damning facts, in its 2007 affirmance of the vexatious litigant finding, the Ninth Circuit noted some of the reasons why Molski and his lawyer could not be condemned for their pursuit of serial ADA litigation. The ADA, noted the Court,
does not permit private plaintiffs to seek damages, and limits the relief they may seek to injunctions and attorneys’ fees. We recognize that the unavailability of damages reduces or removes the incentive for most disabled persons who are injured by inaccessible places of public accommodation to bring suit under the ADA. See Samuel R. Bagenstos, The Perversity of Limited Civil Rights Remedies: The Case of “Abusive” ADA Litigation, 54 U.C.L.A. L. Rev. 1, 5 (2006).
As a result, most ADA suits are brought by a small number of private plaintiffs who view themselves as champions of the disabled. District courts should not condemn such serial litigation as vexatious as a matter of course. See De Long, 912 F.2d at 1148 n.3. For the ADA to yield its promise of equal access for the disabled, it may indeed be necessary and desirable for committed individ- uals to bring serial litigation advancing the time when public accommodations will be compliant with the ADA.
But as important as this goal is to disabled individuals and to the public, serial litigation can become vexatious when, as here, a large number of nearly-identical complaints contain factual allegations that are contrived, exaggerated, and defy common sense. False or grossly exaggerated claims of injury, especially when made with the intent to coerce settlement, are at odds with our system of justice, and Molski’s history of litigation warrants the need for a pre-filing review of his claims. We acknowledge that Molski’s numerous suits were probably meritorious in part—many of the establishments he sued were likely not in compliance with the ADA.
On the other hand, the district court had ample basis to conclude that Molski trumped up his claims of injury. The district court could permissibly conclude that Molski used these lawsuits and their false and exaggerated allegations as a harassing device to extract cash settlements from the targeted defendants because of their noncompliance with the ADA. In light of these conflicting considerations and the relevant standard of review, we cannot say that the district court abused its discretion in declaring Molski a vexatious litigant and in imposing a pre-filing order against him.
In other words, when the legislature puts the enforcement of the ADA in the hands of disabled individuals without permitting them to recover damages, you can't blame private attorneys for working the market created for the private enforcement of public laws even if you can blame them for the manner in which the market is worked.
So what does this have to do with the settlement of litigation and, in particular ADA Litigation?
Because these accessibility cases always cost more to defend than to settle and because they're often indefensible, the rational business decision is simply to settle the darn things.
No one, however, wants to be extorted. And in the few ADA cases I've mediated, it's the principled refusal to pay money at the point of a gun that interferes with a business establishment's willingness to do the economically "rational" thing rather than, say, try it; appeal it to the Ninth Circuit; and, pursue it to the Supreme Court of the United States.
For those representing defendants who are feeling extorted, I offer my own (previously posted) ADA mediated settlement story below.
I have recently been asked by several lawyers to write a few posts on mediation and negotiation terminology not only because some attorneys are unfamiliar with these terms, but also because different mediators and negotiators use them to mean different things.
Mediators, lawyers and negotiators who read this post are invited to add, correct, object, or suggest further refinements and to add their thoughts on further strategic and tactical uses and perils of the impasse-busters we discuss today - the bracketed offer and the mediator's proposal.
And because my readers may find this post as dry as bones, I once again offer the X-rated "Negotiation Table" as pretty #%$@ true and funny (think Ari Gold).
Bracketed Offer: Party A makes an offer to bargain in the zone he wishes to see the negotiation move to. This is often used when neither party wishes to step up to the line of probable impasse and it can also be used to re-anchor the bargaining zone. Quite simply, Party A offers to bargain in the range of, say, $2 million and $3 million. He offers to put $2 million on the table if party B is willing to put $3 million on the table, i.e., "I'll offer to pay you $2 million if you'll offer to accept $3 million to dismiss your suit."
If party B does not accept the bracket, party A will not be "stuck" with having actually placed $2 million on the table when the next exchange of offers and counter-offers begins.
Responding to a Bracketed Offer: Party B can: 1. respond with a counter-bracket, i.e., I'll make an offer to accept $3.5 million in settlement if you'll put $2.5 million on the table; or, 2. refuse the bracket and ask for an unbracketed counter.
The basics: the mediator chooses a number for the parties, making an "offer" to settle for, say $2.3 million which the parties are free to accept or reject. It is a double-blind "offer." If either party rejects the "offer" neither party knows whether the other accepted or rejected. Acceptances are communicated only if both parties accept, in which case they have a deal.
The circumstances: The parties should seek a mediator's proposal only when they have reached a hard impasse. A hard impasse exists when both parties have actually put their true bottom line on the table or their next to the bottom line and they see no hope of it closing the deal.
The purpose: Both parties believe they could convince their principal to accept a deal that is more than they wanted to pay or less than they wanted to accept, but they cannot convince their principals to put $X on the table or accept $Y. They hope to use the authority of the mediator to sell the deal to their principals. If they are the principals, they are willing to settle for a number lower or greater than planned but not willing to close the bargaining session having made such a concession, which would have the effect of setting the floor or establishing the ceiling of all future bargaining sessions.
The Mediator's number: I do not know whether there is a general practice among mediators about how they choose the number proffered. When parties ask me to make a mediator's proposal (I rarely recommend one in the first instance) I explain my practice as follows: When I make a proposal I am not acting as a non-binding arbitrator or early neutral evaluator. In other words, my proposal is not a reflection of the value of the case. The number I propose will be a number that I believe the Plaintiff is likely to accept and the Defendant is likely to pay.
In rare instances, the parties wish to continue bargaining in the event a mediator's proposal is not accepted by both parties. I have permitted this in a few circumstances after explaining to the negotiating parties that it often causes resentment on the other side because they feel as if the party who wishes to continue negotiating is unfairly attempting to use the mediator's number as a new bench-mark from which to bargain.
I highly recommend against continued bargaining after the rejection of a mediator's proposal on the day of the mediation. It should serve as a hard stop because the parties respond to it as an ultimatum. That's part of its power. Take it or leave it.
Just as you would not continue bargaining after indicating that you were putting your last dollar on the table, you should not continue bargaining (during that session) after the mediator has, in effect, put both parties' anticipated bottom lines on the table for them.
First she's all about the election and now she's back to post-mid-Century America's gender wars? Say it ain't so, Vickie!
These are just statistics from an extremely limited sample that tells more about this particular program in this particular place concerning the particular types of cases being mediated than they are about the relative abilities of male and female mediators.
I'm unaware, however, of any controlled studies on gender differences in mediation results. I do know that there's a gender imbalance in the profession and have had panel administrators acknowledge on the QT that even when they're choosing mediators or settlement officers pro bono lawyers tend to choose men most of the time.
So for women struggling in the profession, here's your moment of zen.
Examining the graphical representation of mediator gender and settlement rates, one can see that there are male mediators who settle cases at higher than average rates, as well as female mediators who settle cases are lower than average rates. Nevertheless, it appears that most of the popular mediators who settle cases at higher than average rates are women, while the majority of popular mediators who settle cases at lower than average rates are men.
Some may object to this “battle of the sexes” analysis on the grounds that men and women should be treated as equals. Based on our data, however, male and female mediators are not statistically equal with respect to the rate at which they settle cases. Whether this “good” or “bad” is more a matter of philosophy than statistics.
In her book In a Different Voice, Carol Gilligan described how men and women think about moral conflicts differently. Her research suggests that men tend to consider conflict in terms of rights while women generally view conflicts in terms of dynamic relationships. Accordingly, a “female” approach to conflict resolution may be better suited to the process of facilitating mediated settlements than a “male” approach to conflict.
When I think of my own experience as a neutral for the past four years and compare it to my experience as an attorney in the first four years of my practice 1980-1984, I can only say that it is somewhat similar.
What made the difference in the years that followed? Women flooding the profession. As women litigators and bench officers begin to retire, I suspect that we'll begin to see greater use of women neutrals. And no, I do not believe that the paucity of women on commercial mediation panels nor what I believe to be their greater struggle to build a thriving practice there is based upon conscious sexism.
Like the tendency to prefer judges over attorney mediators (a preference I believe to be waning) I believe that the sub-conscious preference for male over female mediators arises from a continuing misunderstanding among members of the bar about what settles cases. Too many attorneys continue to believe that they need a mediator who can overpower the will of their adversary. And if you're looking for raw power (particularly the power of authority) in American commerce and law, you will naturally choose the judge over the attorney and the man over the woman.
I haven't written about this in the past because it is a topic that tends to divide people and it is not my intention to start a tiny gender war in the tiny world of mediation.
But when these statistics started pouring into my in-box, I couldn't ignore the topic any longer.
Since all four of us are frequent flyers, a lively discussion ensued about ways the airlines could deliver entertainment at lesser cost.
Sean's life-partner, the rocket scientist, Tony, wasn't chiming in as usual. Only when the conversation flagged did we notice that he had one of those "I'm about to invent something" looks on his face.
"You know," Tony finally offered, chopsticks hovering in mid-air, "producers ought to offer unreleased movies to U.S. Air in exchange for the airlines making willing passengers available as focus groups. U.S. Air would be able to offer its passengers something better than the other airlines -- movies that haven't hit the theaters yet - and the production companies would probably pay the airline a fee for the focus group service."
This is why people say this or that doesn't require you to be a rocket scientist. These are the types of innovative solutions Tony calls up daily on a moment's notice. His take-out dinner proposal was what negotiation gurus are talking when they suggest that bargaining parties use their negotiation for the purpose of creating value.
having created new value, negotiators must still divide the resulting goods. Unfortunately, the competitive strategies used to claim value tend to undermine the cooperative strategies needed to create value. The exaggeration and concealment needed for effective competition is directly opposed to the open sharing of information needed to find joint gains. Conversely taking an open cooperative approach makes one vulnerable to the hard bargaining tactics to a competitive negotiator.
This is a week-long intensive program for new and/or experienced attorneys who need to learn/brush up on their basic trial skills. If you can take the time, your entire practice will benefit from the experience.
The mediation of litigated cases involving personal or economic injury should mainly be about money. Unless the issues of law and fact have been fully fleshed out, mediation sessions get bogged down in contentions about ultimate facts and conclusions of law that neither side can "win."
Let’s take a drug case in which the drug causes a signature disease that only has 3-4 causal connections. Until the defendant knows my client’s medical history and definitively understands that the only causal connection present in my client’s case is the drug at issue, the defendant cannot fully appreciate the strengths of the plaintiff's case, leading to an unbridgeable divergence in the two sides' valuation. On the other hand, if I’ve not yet conducted adequate discovery to learn that the drug didn’t contain the offending agent until after my client quit taking the drug, then I’m going to waste my time – and everyone else’s – by asking for 7 figures.
If the attorneys are making arguments that sound like summary judgment motions during a mediation, both parties are wasting their time. No one should proceed to mediate before they know what they agree on and what they disagree. Ideally, the parties should agree upon as many facts and legal issues as possible before sitting down to negotiate settlement.
Make Sure The Money Person Is There
I will no longer attend a mediation unless the individual authorized to write the settlement check is present. None of this, “We have to get on the phone and see what corporate says” for me. You do not want to mediate with defense counsel only. It’s much easier for an adjuster or other money person to hold tight at a number when he/she doesn’t have a plane to catch. In fact, one of the first things I ask the corporate representative at a mediation is, What time is your flight? This information usually tells me volumes.
Make Sure The Mediator Knows Who to Talk to Before the Mediation Begins
Assuming there’s only one plaintiff and one defendant, there are no less than four parties that the mediator may need to direct his/her attention to: (1) defense counsel (2) the corporate representative of the defendant (3) plaintiff’s counsel and (4) the plaintiff. In any given litigation, one or more of these parties could be the source of impasse. Usually my clients are very well-oriented on where we need to be money-wise heading into mediation. The occasion does arise, however, when I need the mediator to help me help my client understand that his or her expectations of recovery are unrealistic. On those occasions, I instruct the mediator confidentially that my client needs a little reality testing if the case is going to settle.
All of us sometimes have unrealistic expectations. I certainly can, as can defense counsel or the corporate representatives. The point is the mediator needs to know who needs to be talked to a little more than the others. I encourage any mediator with whom I work to accept confidential settlement letters. In these letters, I mention which parties I think might be barriers to settlement.
If you have a mediator who only talks to the lawyers, you’re probably in for a long and unsuccessful day. Or, given the situation, it may be the clients who are being hard-headed. In these instances, the mediator needs to talk right past the lawyers and speak directly to the clients. As a plaintiff’s lawyer, I won’t deal with a mediator who won’t talk directly to my client or the corporate representative.
The lawyers' job is to represent their clients and the mediators job is to bring the lawyers together. If the lawyers are in the way, the mediator needs to ignore them for a while and deal directly with the clients. Ensure that the mediator you’ve agreed to will do this.
Before The Mediation Set A Time Limit For Real Progress
This last point is something that I’ve only started employing in the last few years, and it’s worked wonders. In a courteous and professional tone, I inform defense counsel that if we’ve not made sufficient progress by a certain time or within a certain number of hours – usually 2-3 – then I will leave. What constitutes “sufficient progress” is case-specific, and you’ll know it when you see it. I give this caveat to defense counsel so that there’s no misunderstanding at the mediation. If, by all reasonable measures, my case is worth 7 figures, I’m not going to spend 6 hours trying to get to 6 figures. I simply will not let that happen to me anymore.
By informing defense counsel ahead of time that I won’t stay more than a couple of hours unless I see real progress, I’ve managed to avoid many of the lowball offers that usually start the defense side of the mediation. Or, if I get a lowball offer, the numbers start increasing once I remind the mediator and defense counsel that I will leave if substantial progress isn’t made.
Of course, this point applies equally to plaintiff’s counsel. I can’t start off at $10 billion dollars like Dr. Evil with a law degree. I make sure that my offers are within reason so that I can be justifiably indignant if defense counsel starts playing games with the offers.
One Size Does Not Fit All
As I said at the beginning, there is no foolproof way for the plaintiff lawyer to approach mediation. There are numerous approaches and many depend on the parties involved. These are some of the broad categorical approaches that I take and they’ve worked for me. I hope that you find them useful as well. Happy mediating.
About The Author
Brian Herrington is the founding partner of Herrington Law, PA in Jackson, Mississippi. Licensed in Mississippi and Tennessee, Brian litigates consumer class actions, cases involving defective drugs and medical devices, and personal injury cases all over the country.
After eight years of catastrophic Republican misrule—in the midst of economic crisis and rising unemployment, in a nation plagued by ruinous energy costs and inflation, bank failures, and staggering public and private corruption—an eloquent, charismatic, intelligent Democratic candidate was locked in a statistical tie with a doddering old hack whose primary argument for his claim to the most powerful office on earth is that he was shot down over Vietnam and tortured for five years. Indeed, this remained the case even after McCain demonstrated beyond all doubt, in his impetuous selection of a ludicrously unsuitable vice- presidential candidate, that he lacked the good judgment that is the primary qualification for the job. If the Democratic Party loses this election, then it should forever concede the presidency.
Ouch! I read this magazine for the same reason I watch Fox News. To upset my own comfortable ideologies. That's the trouble with us liberals -- we're always fretting about being fair, when, according to Harper's Roger Hodge we're just a big bunch of conflict-avoidant pussies.
Conflict in politics is not a metaphor, and as with any fight, the audience is likely to get involved. That is the essence of politics. A campaign that decides in advance that voters are tired of negative campaigning, that they are sick of partisan attacks and will respond only to positive messages, has stupidly left the field of battle. The people who truly dislike political combat are presumably among the 95 million who do not vote. Senator Barack Obama, a sophisticated and intelligent man with sophisticated and intelligent advisers, promises to change Washington, to eliminate the tone of partisan rancor, to foster a new spirit of brotherhood and cooperation. Poor lamb, he wishes to lie down with lions. But the Kingdom has not come.
Unfortunately, the sovereign voter can do little, on his own, to remedy the situation, especially if he happens not to live in Florida or Ohio. Yes, he can make a campaign contribution, a slightly more effective form of voting, but unless the Obama campaign decides to wage a more creative and destructive war, casting monetary ballots remains an empty gesture. (Of course one can also join the battle personally, perhaps by repeating the rumors about John McCain’s Alz heimer’s meds or the Sarah Palin sex tape.) Ultimately, we return to the problem of political will, to the Democratic Party, to the commitment of its party bosses to prevail, finally, in this election.
We can hope for change, that the Republicans will make some fatal error, or that Obama’s party will fight hard enough to persuade a decisive number of “low information” voters that John McCain is not only a liar but a menace to our children’s future. Recent precedents, however, are not encouraging. The Republican Party lied its way through eight years of criminal misrule while Democrats mostly just cowered in a back room. Now, faced with a clumsy deception about whether Sarah Palin sought an earmark for a small town in Alaska, Obama exclaims, “Come on! I mean, words mean something, you can’t just make stuff up.” Oh, yes, Barack, we can.
In the same issue that suggests we dirty our hands by calling John McCain a liar and the Bush administration's "misrule" criminal, we read that Obama is a detached blank screen upon which voters can project any quality they like (or dislike) because . . . well . . . his mother was lonely and so is he:
Obama wants to believe in the common good as a way of providing a fullness to experience that avoids the slide into nihilism. But sometimes I don’tknow if he knows what belief is and what it would be to hold such a belief. It all seems so distant and opaque. The persistent presence of the mother’s dilemma—the sense of loneliness,doubt, and abandonment—seems palpable and ineliminable. We must believe, but we can’t believe. Perhaps this is the tragedy that some of us see in Obama: a change we can believe in and the crushing realization that nothing will change.
This is usually the point at which my own McCain-supporting mother breaks in with "honey, you know, you can think too much." And after years, decades really, of finding this refrain irritating, I finally agree with her about the thinking part if not about her taste in Presidential candidates.
Like the Obama caricatured in this month's Harpers as an ineffective dreamer as intent on replacing his deceased mother's lack of faith with liberal-Christian-do-gooding as Oliver Stone suggests "W" was intent on finally pleasing Daddy, I simply choose to have faith in the stated values of the Democratic party. I continue to believe that over time, we can do better as a nation through consensus and problem-solving, collaboration and compromise, than we can by adopting the tactics of the world's strong-arm leaders and disciples of discord.
The Good News
Assuming that the guy I think Obama is -- highly educated, articulate, and idealistically dedicated to serving the common welfare -- actually exist on the political scene (and I will not give up this faith any more readily that others would renounce their own religions) I believe them to be riding the bow-wave of transformation. I have staked my professional life on this faith in my fellows' ability to work toward the common good, abandoning the extremely lucrative practice of legal battle in exchange for the far less financially rewarding practice of collaborative negotiated conflict resolution.
Who are the real cowards here and who the heroes? People who refuse to negotiate face-to-face "without pre-condition" ("we won't discuss settlement unless they're willing to put $10 million on the table first") and without the protection of several layers of legal counsel? Or those who are willing to test the rectitude of their "position" by sitting across a table with their opponent to frankly discuss their mutual role in whatever commercial or personal catastrophe flowed from the intersection at which their (mis)fortunes collided?
So I will continue to brave reading Harpers (which discourages me) and risk the challenge to my world view of Fox News commentary (which so often enrages me) on the off-chance that my religion -- tolerance; compassion; collective effort; empathy and the like, has more staying power than the religion of hate; discord; and, denial.
And I will also continue to believe that none of us could ever possibly be right.
The first thing we mediators are taught (after digesting the imperative to "be conscious") is that people in conflict need to be in an atmosphere of hope and safety to be able to: (1) recognize the point of view of another; (2) be accountable for his/her own "part" in the dispute; and, (3) generate creative solutions to bust past impasse.
Perhaps the good times are in fact dead. And certainly someone thinking of forming the umpteenth "Web 2.0-widget-to-grab-audience-and-find-advertisers" ought to pause to think whether they really have some kind of defined competitive advantage that can translate into a sustainable business.
But real customers continue to face real problems. And as always, innovators who figure out different ways to solve those problems--and make money doing so--will have opportunities to create new growth businesses. In fact, the creative destruction unleashed by a crisis always opens up opportunities for innovation.
As a simple example, consider a New York based startup called On Deck Capital, Inc. As described in Monday's Wall Street Journal, the company loans money to small businesses. Instead of relying on individual loan officers to pour over episodic financial information and make decisions, the company has an algorithmic approach that uses software to analyze a company's day-to-day activities in a non-obtrusive way to assess credit worthiness. Its loans feature higher interest rates than loans from most banks, but lower than alternative sources.
The company launched in May, and has already distributed $10 million in loans. It has suffered very few defaults. The current credit crisis and hesitancy of many banks to loan to even the best-run small businesses creates substantial opportunity for On Deck to extend its model.
I watched the debate last night with people who support my candidate. They all also happened to be mediators, so they understand concepts like confirmation bias --the tendency to search for or interpret new information in a way that confirms one's preconceptions and avoids information and interpretations which contradict prior beliefs. It is a type of cognitive bias and represents an error of inductive inference, or as a form of selection bias toward confirmation of the hypothesis under study or disconfirmation of an alternative hypothesis.
I've been Twittering (shoot me! this is addictive behavior). But all behavior has it's "up" side. The "up" side to following my Twitter network's running real-time commentary of the debate was the exposure of my own (and my friends') confirmation bias. I have both McCain and Obama supporters in my network and it was as if the two groups were watching entirely different debates. And they were.
Because nothing is objective. Let me repeat that. Nothingis objective. Everything we hear, see, touch, smell and taste is filtered through our entirely personal experiences, the collective or "received" reality of the society (micro or macro) in which we live, and interpreted based upon those experiences, which are further complicated by universal cognitive biases and particular core beliefs (our "operating principles").
If nothing is objective, there is no truth beyond that which one has faith in. ("faith is the substance of things hoped for, the evidence of things not seen.")
Yes, I know, the scientific method. But you and I don't test our beliefs, opinions, perceptions and conceptions by the scientific method. We hear, we see, we smell, we taste, we touch and we respond. We opine. We believe we are right.
So I said to my friends in the middle of the debate, "we're an example of "confirmation bias" and they took issue with me. And I let it go because I wanted to listen more than to impose my own view of our collective experience. And I was Twittering, lord help me, with some people who didn't share my bias.
I missed statements made by McCain entirely. It was if I hadn't even heard them. I was listening to confirm that which I already believed, which means I screened out what didn't fit my view of McCain or Obama and highlighted those statements that confirmed my existing beliefs.
This is what happens every time you try a case to a jury. It's why the little "g" god of the market place created jury consultants. It is also what happens everytime you try to settle litigation. Litigation raises confirmation bias to holy writ. Which is why the little "g" god of the market place created mediators. Why? Because the client has filtered his opening story through his own subjective experiences, which we, the litigators, devote ourselves to proving by cherry-picking the facts that conform to those experiences and disputing all those that don't. By the time the parties and their counsel get to me, they're often in different galaxies. And I need to help them remember, or realize for the first time, that their opponent has woven the disparate facts of "what happened" into an entirely different story, and has done so without "lying" about those events. Just as importantly, the parties come to understand that a jury might well "buy" their opponents tale as the "right" one.
Here's the more important point to getting a better deal: your opponent is often nearly as interested in your acknowledgement that his version of the events might be as accurate as yours as he is in "winning" the case. When (or if) the parties clear this hurdle, they can get down to serious horse trading, benefitting both.
So, forget the pundits. If you believe your guy "won" last night, it's probably equal parts a measured opinion and a peculiarly subjective experience, one that you do not even know you've tailored to fit your own view of reality.
I like Obama because I believe he acknowledges this from time to time. Not always. But often enough to make me feel comfortable with him in a White House. Am I right? How could I possibly be? We won't know anything until one of these men moves from campaigning to governing.
Earlier this week I was asked the following question by a concerned General Counsel: how can we help our employees grapple with on-the-job justice issues without leading them to believe that our proposed solutions are untrustworthy.
Our company spends an inordinate amount of time explaining disability, workers comp and federal employment law to employees who misunderstand what their rights are, or do not give us the right information to help them get the help they need.
Of course, we are the big bad employer, so any information we give them is suspect. I have considered hiring a social worker as a case manager/advocate for these people, but that position would just be interpreted as another tool of the evil employer out to keep them out of work/make them go back to work in violation of their best interests, so it would be a waste.
We would LOVE if there was an independent agency that would assign a case worker, not to work as an attorney for the employees, but as an advocate to help them understand their rights and access the system correctly. I would gladly pay to fund this service.
Then I realized, if the employer, or a group of employers, funded this employee advocacy agency, employees would think the advocates were biased toward the employers and were just in a sham relationship to deprive them of their rights to serve the interest of the employer.
Now, I do not believe this would be the case. I trust in the professionalism and ethics of mediators, but I do believe that uneducated and single users would form that opinion. Professor Murray's opinion reinforces that conclusion, even though at first glance, he would seem to be "educated."
But, is bigger government the answer. My experience with the EEOC is that they want employers to do MORE than is required by law. We have had success with mediators after complaints are filed, but my goal is to get the employees what they need when they need it, not have a mediator help us fix it after time has run out.
What are your thoughts on this?
The Problem as Cognitive Bias
I've highlighted the sections of the GC's email that raise the problem of reactive devaluation -- our tendency to devalue and resist anything our "opponent" offers to us. Most attorneys were taught reactive devaluation as first year associates -- "if opposing counsel wants it, you don't."
One can be led to conclude that any proposal offered by the “other side”—
especially if that other side has long been perceived as an enemy—must be
to our side’s disadvantage, or else it would not have been offered. Such an
inferential process, however, assumes a perfect opposition of interests, or in
other words, a true "zero-Sum" game, when such is rarely the case in real-
world negotiations between parties whose needs, goals, and opportunities
are inevitably complex and varied.
Combatting Reactive Devaluation in the Workforce
Cognitive biases such as reactive devaluation are not random artifacts of an irrelevant evolutionary past. They are built-in protections against deception by our friends as well as by our adversaries. There is only one lasting protection against this bias -- to engage in clear communication with your work force on a daily basis concerning the mutual and complementary interests of employer and employee; to express your belief in your interdependence in word and deed, i.e., by engaging in dialogue and activities demonstrating benevolent intent; and to willingly listen to one another's complaints, understanding that one man's benevolence is another's bondage.
What's a diagnostic question? One that would reveal our bargaining partners' needs, desires, priorities, preferences and motivations. I'm no employment expert, but I have participated in the management of law firm personnel as a partner and have been managed by others throughout my professional life. As a full-time mediator for more than four years, I have also asked hundreds if not thousands of diagnostic questions to help litigation adversaries understand one another's motivations, to reframe those motivations as non-threatening, or, at a minimum, the result of ordinary human fallibility, and to explore the parties' mutual and complementary interests. I also remind my parties and myself as often as possible that you cannot drill a hole in the other guy's side of the boat without making your own side sink to the bottom of the lake as well.
Empowerment, according to [the fathers of the transformative paradigm] Bush and Folger, means enabling the parties to define their own issues and to seek solutions on their own. Recognition means enabling the parties to see and understand the other person's point of view--to understand how they define the problem and why they seek the solution that they do.
(Seeing and understanding, it should be noted, do not constitute agreement with those views.)
Often, empowerment and recognition pave the way for a mutually agreeable settlement, but that is only a secondary effect. The primary goal of transformative medition is to foster the parties' empowerment and recognition, thereby enabling them to approach their current problem, as well as later problems, with a stronger, yet more open view. This approach, according to Bush and Folger, avoids the problem of mediator directiveness which so often occurs in problem-solving mediation, putting responsibility for all outcomes squarely on the disputants.
Rights and Remedies vs. Interests
It's not surprising that employees just don't seem to "get" the legal rights and remedies company HR departments keep trying to explain to them. They don't make any sense absent legal training.
People who are not lawyers simply don't understand why there is a legal remedy for one type of injustice but none for another that feels just as unfair. Let's take our patchwork of Constitutional protections for employees. As an life-long ACLU member, I'd be the last to denigrate them. But we have to understand that we've created a "fair" workplace for only some of our citizens, not all of them.
Women, people over 40, under-represented minorities and the like, can take the square peg of their unfair work treatment and cram it into the round hole of a viable cause of action. If an employee does not want to cry "gender discrimination" even though she's being treated badly on the job, or if he has no bundle of legal rights to assert, there is no remedy for a termination that feels (yes, feels) wrongful. Remember, it took us lawyers quite some time for the legal worldview to "click" and we were immersed in it, drilled in it and eager to learn it. Employees just want someone to listen to their problem and to help them resolve it. They don't want to know the wage-hour laws, the need to exhaust administrative remedies with the EEOC and the like.
Employees and employers have people problems with justice issues, not legal problems with "irrelevant" emotional responses that get in the way of resolution.
Expressed emotion is the key, not the lock.
It is we -- the lawyers -- who legalize and monetize injustice, shutting our clients down when they try to explain what the problem really is because it's irrelevant to the legal solution.
If you're old enough to remember the lingering moment in United States history when our educational institutions went from white, on the one hand, to multi-hued, on the other, you'll know intimately how you deal with reactive devaluation. You get to know one another. Do this andKaneesha is not "black" or "African American" but a well-known acquaintance or dear friend. The same is true for employers and employees. Create activities in which (alleged) oppressor and (purported) oppressed come together to engage in mutually productive (Habitat for Humanity springs to mind) and mutually enjoyable (basketball? girls nights out?) activities. At the holiday party, don't relegate the "underlings" to their own table. Walk your talk. Destroy the hierarchy everywhere except where it's actually necessary to get work done.
I can't describe the benefits of interest-based resolutions over rights-based solutions any better than does my mentor and friend, Ken Cloke, in his brilliant new book -- Conflict Revolution.
[r]ights-based processes . . . generate winners and losers, undermine relationships, and result in collateral damage, . . . Since rights rely on rules, change is discouraged, though not prevented, and conflicts are settled rather than prevented or resolved.
This is not easy work. As a mediator, I know how elusive Cloke’s “outcomes” can be
-- outcomes [in which] both sides win and no one loses, when former adversaries en-
gage in meaningful dialogue and reach satisfying agreements, and when power is exercised with and for each other by jointly solving common problems.
I have, I am afraid, given my GC a problem rather than a solution. More accurately, I've suggested an altered way of looking at the problem without a great deal of detail about crafting a solution. Not only could people better versed in employee relations write books on this topic, they have. Therefore, I'm asking my good ADR blogging buddies to please chime in here for you.
Why was this an echt academic moment? Because the course I was taking from Joe -- "Ideologies of Mediation" -- had, before that moment, been suggesting that all ideologies interfere with durable, party-satisfying resolutions. Now it seemed the problem wasn't with ideology itself but with the wrong ideology. Hmmm, felt like law school. Forget Pennoyer v. Neff. It's all about this Buckeye case with the exploding boiler.
At the time, my litigator husband was skeptical of all mediators and all mediation techniques. We took a long walk down a Malibu beach after one of Joe's classes while I tormented him with questions about ways in which mediators could help him settle the case he was then working on -- the World Trade Center insurance coverage litigation.
If you wonder why I'm such a joint session fanatic, it's due largely to Joe's and Baruch's teaching as well as my own experience mediating community disputes locally -- the only place true transformative mediation is practiced. Engage the people with the problem and you're more than half way home. You just have to be capable of getting the lawyers to trust you enough to give up just a tiny bit of control to help the process happen.
As another mentor -- Richard Millen -- taught me, people don't have legal problems, "people have people problems" which are burdened with justice issues.
Choose your mediator wisesly, collaborate with him/her and you will not only settle the case, but emerge with a client who got what he/she/it hired you for -- to resolve the commercial problem and the justice issue that called for the retention of a lawyer in the first place.
See Marginal Revolution's post today The problem is that both of you are right citing David Brooks for the proposition that the "failure to pass the bailout represents a massive failure of American governance and leadership, most of all at the Congressional level. That's true even if you think, for other reasons, that the bailout was a bad idea. (Can any hero be cited in this debacle?)"
There are no heroes in this crisis -- only leaders and representatives of the people, many of whom are now being seriously burned, most particularly in their retirement accounts.
We need in Congress what every negotiation requires: preparation, communication, collaborative problem solving and, in this particular bargaining session -- courage, which Webster's defines as
"the attitude of facing and dealing with anything recognized as dangerous, difficult or painful instead of withdrawing from it; quality of being fearless or brave; valor. The courage of one's convictions or the courage to do what one thinks is right."
Come to think of it, all negotiations require courage.
So get back up on the donkey, Congress; be prepared; be principled; be brave. We're counting on you.
And for those who aren't afraid to admit that they don't know the difference between a strategy and a tactic, here's a brief tutorial.
If ever there was a time for resonant leadership, it's now. We need to rise above panic. Panic kills. Really, it does. If you're caught in a riptide (which we are) and you freak out, flail, fight it, you will die. If you smell smoke in the house and run wildly around gathering things you will die. If you freeze in your bed and hope the smoke is outside, not inside, you'll die.
This is not a time to give in to panic. Of course we are scared. It would be stupid not to acknowledge that the economic world as we know it -- knew it -- has changed fundamentally and forever. Actually it probably changed a while ago. We just ignored it, covered it up. So we are justifiably terrified. Now what?
Let's do something with our feelings, rather than let our emotions do something to us. Fear has its place -- it gets our attention. But we can't let it paralyze us. This is a time to breathe deeply. To think about what is most important -- family, life, health, love, purpose. And for my countrymen and women -- let's think about who we are as Americans. We can move beyond fear. What's beyond fear? Hope. Creativity. Resilience. Compassion. Courage.
Back to my daughter Sarah for a minute. She's at work today, in good spirits and having fun helping to create an awesome TV special about an inspiring American hero. My brother --also at work, creating. That's what he does--he creates new solutions for new problems. And me? I'm at work too. I spent the day with my team, a group of incredible people who dedicate their lives to others.
No, it won't be easy. But yes, we can make it, and we can make a better world too. That is not a noble goal, it is a necessary goal.
A final word. Common wisdom, backed up by research: hope, optimism, good humor and compassion (among other positive emotions and experiences) can literally free us from the deadly psychological traps of panic and anger. It takes tremendous self-management. But we can do it.
It is not the critic who counts, not the man who points out how the strong man stumbled, or where the doer of deeds could have done better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood, who strives valiantly, who errs and comes short again and again, who knows the great enthusiasms, the great devotions, and spends himself in a worthy cause, who at best knows achievement and who at the worst if he fails at least fails while daring greatly so that his place shall never be with those cold and timid souls who know neither victory nor defeat.
Moral cowardice that keeps us from speaking our minds is as dangerous to this country as irresponsible talk. The right way is not always the popular and easy way. Standing for right when it is unpopular is a true test of moral character.
As California's longest budget stalemate in state history ground to a close, six professional mediators met with The Bee's Capitol Bureau last week to offer their thoughts on building a more functional state budget process.
Their advice in a nutshell: Improve lawmakers' communication skills, train them and their aides in mediation techniques, set up a structured negotiation process long before budget deadlines approach, agree on common goals, build trust by reaching incremental agreements – and don't expect perfection.
California Federal Court: Insured Plaintiff Can Seek Treble Punitive Damages For Insurer’s Alleged Bad Faith
The U.S. District Court for the Central District of California recently denied a motion to strike and allowed a plaintiff to pursue treble punitive damages against his insurer for the insurer’s alleged bad faith. Novick v. UNUM Life Insurance Co. of America, C.A. No. 08-02830-DDP-PJW (Aug. 7, 2008).
The insurer issued a long term disability benefits policy to the plaintiff in 1976, providing benefits should the plaintiff become totally disabled due to an accident sustained during the course of his career as a surgeon. In June 1992, the plaintiff filed a disability claim with his insurer after sustaining a spinal injury that allegedly prevented him from performing surgery. The insurer initially paid benefits to the plaintiff, but discontinued making the benefits payments on January 18, 2007. Shortly thereafter, the plaintiff filed suit against its insurer alleging breach of contact and breach of the covenant of good faith and fair dealing.
In his complaint, plaintiff seeks punitive damages pursuant to California Civil Code §3294, which allows an award of punitive damages for conduct that constitutes malice, fraud or oppression. The plaintiff also seeks treble punitive damages pursuant to California Civil Code §3345, which provides for an award of treble damages “in actions brought by, on behalf of, or for the benefit of senior citizens or disabled persons . . . to redress unfair and deceptive acts or practices or unfair methods of competition . . . [when] a trier of fact is authorized by statute to impose either a fine, or a civil penalty or other penalty, or any other remedy for the purpose or effect of which is to punish or deter . . . .”
The insurer argued that §3345 does not provide for the trebling of damages for insurance bad faith claims. The court reviewed the legislative intent behind the statute and determined that the legislature did not intend for the statute to be limited to actions that specifically mention unfair business practices. The court noted that, as bad faith claims redress unfair practices, §3345 applies to insurance bad faith claims. Accordingly, as the plaintiff alleges that the insurer acted in bad faith, the court held that the plaintiff is entitled to pursue his request for treble punitive damages.
Now we just need a blogging claims adjuster and we can bring peace to the Middle East.
Below are John's impressive credentials. We meant to meet for a "quick" cup of coffee. We talked negotiation strategy and tactics for nearly three hours.
As I review websites I often wonder about the experiences of the authors and the biases they bring, so I feel I should disclose mine for those who want to know more. I have been fortunate to work with two “hands on” in-house legal teams, with settlement negotiations handled primarily by employed lawyers rather than their law firms. I am also lucky to have practiced in law firms with true trial lawyers who generated genuine negotiating leverage whether settlement was their objective or not. Through these experiences I have settled cases threatened, pending or mediated in about 20 states - from Montana to Florida and from New Hampshire to California - and have managed the resolution of disputes around the world. Working with and against some very good lawyers and employing some of the truly legendary mediators, I feel fortunate to have seen a real cross-section of styles and approaches. In almost all of these cases I have had the opportunity to work behind closed doors with the people who really decide when cases settle - CEOs, CFOs, General Counsel, COOs, individual plaintiffs, insurers, board members, auditors, and more.
We trained women in the skills necessary to pass apprenticeship tests so they could gain entry into the skilled trades. We opened the way for women to work at one of San Diego's largest employers -- National Steel and Shipbuilding. We helped all women, including those who'd spent time in prison and battered women's shelters, find employment to help them break a cycle of poverty or move from the lower to middle classes by their own efforts and to provide better lives for their children.
We were the so-called Second Wave women's movement, seeking and achieving the same education, training, work and respect that were only a white American man's entitlement when I was born in 1952.
If you want to know what it was like for women when I was ten years old (1962) and my own divorced and single mother was working for $1.29 an hour selling bags and hoisery at a Leeds shoe store in San Diego, watch a single episode of Mad Men. Follow "Peggy" who is opening professional doors long before there were any ceilings in men's rooms to crack. Watch how women were treated and how little they thought of themselves. Think of the way in which we were squandering our human resources by relegating my mother, your grandmother, to just a few honorable but limiting professions -- nurse, secretary, teacher.
(yes, this is the same typewriter I used in the typing pool at Arthur, Dry & Kalish in mid-town Manhattan in 1975; we had one woman attorney in the firm when I joined; she was in her 50's and was still an associate in trusts and estates)
To negotiate our way into a better world in the 21st century, we'll need to understand one another better and learn to drop all of our stereotypes about men or women, black or white, Muslim or Christian.
So let's all celebrate universal suffrage today. Self-determination -- which is what mediation is all about -- democracy liberty justice.
If You Know the Case Law, Litigation Doesn't Have to be Robotic
By Victoria Pynchon
Here in California, there's no stronger rule of confidentiality than that applied to a mediation. It cannot be impliedly waived like most privileges, including the near-sacred attorney-client privilege. Simmons v. Ghaderi, 2008 DJDAR 11107. You cannot be estopped from relying on it. Eisendrath v. Superior Court, 109 Cal.App.4th 351 (2003). And if you want your mediated settlement agreement enforced, you must strictly comply with the requirements of Evidence Code Section 1123. Fair v. Bakhtiari, 40 Cal.4th 189 (2006).
Insurance policy-holder counsel Kirk Pasich of Dickstein Shapiro has criticized nearly all recent interpretations of mediation confidentiality by the California Supreme Court on the ground that they permit insurance carriers to use mediation proceedings to engage in acts of bad faith.
"Why should a carrier get a license to act in bad faith in mediation," Pasich asked, adding, "Cases settled, and still settle, in mandatory settlement conferences without that same shield. I don't think a process should exist that encourages, rather than discourages, a party from acting in bad faith."
If you do not understand the differences between settlement conferences and mediations, you are not alone. My informal surveys indicate that litigators believe there's no difference whatsoever between the two and few mediators are able to distinguish between them despite their training in the field. Nor have California's courts been of any real assistance.
What's in a name? Here, plenty. The application of California's Rules of Evidence to mediations has such significant potential economic consequences that mediator and litigator malpractice actions are surely looming on the horizon.
What type of misbehavior can occur in a mediation? Here are just a few examples: One party can make a misrepresentation of material fact on which the other relies in entering into a settlement agreement; as Pasich notes, an insurance carrier can act in bad faith; one mediating party could tortiously interfere with a third party's contract or prospective economic advantage; or the mediating parties can enter into a collusive settlement agreement, depriving the settling parties' co-defendants from learning facts necessary to challenge the settlement in a "good faith" hearing.
Even if all parties have expressed complete agreement during the mediation, which they then memorialize in a term sheet, absent strict compliance with the requirements of Evidence Code Section 1123, no evidence probative of that agreement will be admissible in a California court.
If the mediating parties are engaged in a settlement conference, none of this potentially bad behavior would be protected.
Given the potentially significant adverse economic consequences that can flow from a mediation, California's courts have clarified the differences between the two procedures, right?
I believe in Unicorns and Max doesn't so I've promised to keep my eyes open for appearances of that storied creature. Previously, I have reported the Unicorn's appearance here (community mediation; potential lawsuit, no lawyers); here (litigation + lawyers who send the parties to community mediation); and, here (litigation + lawyers + clients who seek mediation without lawyers to resolve dispute).
The parties to a lawsuit do not have intertwined interests: they have directly adverse interests. Unless there's some possibility of a future relationship, the defendant doesn't want to resolve the conflict: they want the plaintiff to drop their frivolous claim. In their mind, their best alternative to a negotiated agreement ("BATNA") is for the plaintiff to crawl in a hole and die.
[My Comment: the "intertwined interests" all parties to litigation have is the litigation itself with its attendant cost, delay, and, uncertainty, not to mention the discomfort "ordinary" people experience when plunged into the foreign environment occupied by attorneys with their strange "causes of action" and "affirmative defenses," their demurrers and JNOV's; their res ipsas and, most importantly, their view that only facts pertaining to a "cause of action" or "affirmative defense" are relevant to the injustice suffered by their clients.]
[T]he plaintiff usually prefers imposing a conflict on the defendant (who the plaintiff believes cast the first stone) in pursuit of justice, an imposition they will only relieve for at least "full" compensation. . . .
The problem is that most parties don't consider their claims to be assets; the problem isn't that there's emotional baggage around the economic understanding, it's that the parties interpret their dispute as fundamentally non-economic.
[My Comment: I've said before that all litigation is "fundamentally non-economic" -- it's about justice. Though Max is one of the few practicing litigators who agrees with me, he does not believe in the existence of my solution -- a settlement conference or mediation conducted in joint session].
Hence a Mediation Unicorn with litigation and attorneys prior to any meaningful discovery.
I'm talking to a plastic surgeon whose artistry not only went unappreciated, but which gave rise to a lawsuit for battery and malpractice.
The plaintiff is a model and an actor. The surgery, she claims, left permanent scaring on her nose. Her opening demand is $500,000. I am trying to persuade the physician, his attorney, and the claims adjuster, not to walk out. The plaintiff's deposition has been taken and the doctor's is scheduled for the following week. No experts have been retained.
The parties have made the rare effort to settle the case early in the litigation.
This is what the defense thinks about the opening demand in response to their good faith participation in an early mediation:
%&*#%*#%@& and %&^@(% and *&$)*#!
I am suggesting to the defense in separate caucus that they allow me to conduct a joint session in which the parties can talk about the surgery, the scarring and their post-surgical communications. I explain that the Plaintiff is more angry than acquisitive. She believes that the doctor disrespected her when she complained about the scarring.
He denied that I had a scar. He was rude and dismissive. He disrespected me. He had no bedside manner.
She is one of the few personal injury plaintiffs who comes right out and says what so many plantiffs feel.
I want him to suffer. My attorney says he has to report any settlement in excess of $30,000 to the Medical Board. I want to make him do that. I want him to suffer as I have. It's not about the money. It's about accountability. I want him to be accountable.
The parties resist a joint session and we spend two hours negotiating in the strato- and nano-spheres. $10,000. $490,000. $12,500. $475,000.
"We're getting nowhere," says Plaintiffs counsel. "Tell them we're leaving."
"The case will never settle. This is a waste of time for my doctor and my claims examiner. Tell them we're leaving. The case will never settle. It simply won't settle. The case cannot settle."
Click Your Heels Three Times and Say "There's No Place Like Home."
Attorneys are fond of saying that all mediators do is "keep them in the room." They might be right, but the difference is the room I keep them in. It's a mediation room, not a conference room or a deposition room or a courtroom. It's a room in which I ask the doctor if the feeling he has is something akin to a fish being hooked, pulled up out of the water and thrown onto the deck of someone's boat, gasping. He cracks a smile for the first time that morning.
It's a room in which I say there must have been a miscommunication, a misunderstanding. It's a room in which I say to the defense that the Plaintiff feels angry and disrespected. It's a room in which I caution the Plaintiff that the physician is from a different culture than her own -- one where a doctor does not express empathy but only certainty in his skill and expertise.
The claims adjuster asks me if I'd been able to see the Plaintiff's scar from where I was sitting -- across a conference room table. I admit that I could not. I acknowledge what is patent in the defense room -- the Plaintiff is blindingly beautiful. A jury is unlikely to award her much in the way of damages. I have said as much to the Plaintiff. But she is angry and wants a pound of flesh.
I have another mediation in the afternoon. I tell the defense we have fifteen more minutes. The claims adjuster keeps repeating "the case will not settle, the case will not settle, the case will not settle." I take this to mean that the defense very much wants to settle the case.
"If someone repeats something over and over again," my mentor Ken Cloke taught me, "that is the key to the resolution." While that might be so, I haven't yet found a way to use that key to open any door. But it is not really my case to settle. It's my job to keep them in the room.
"I Want to See the Scar," says the claims examiner.
I wish I could take credit for the following but I cannot. The Plaintiff's attorney says "why don't they go to the ladies room where my client can show Ms. Y the scar and together they can look at it."
I hear the click of the Unicorn's hooves in the hallway. The plaintiff's attorney is male. I don't believe he knows what he's suggesting. He wants to send two women into one of the safest and most congenial, soul-bonding rooms in all of God's creation -- the women's room.
I know the case will settle.
We are finally in joint session. The claims examiner says, "I want to tell you that I now see the scar. I'm sorry I denied it. We'd like to offer you $X to settle the case."
Did $X settle the case? No. But $X + $Y settled the case ten minutes later.
And just around the corner, you could see the shadow of the settlement unicorn rear up on its hind legs in celebration.
Each of the seven steps can help litigators de-escalate the conflict inherent in litigation before all-important settlement negotiations, whether they are conducted with the assistance of a third party neutral or not.
One or more of them might also help ease tension in the law firm -- a very tense place these days given the recession, lay-off's, the de-equitization of partners and the shedding of non-productive practice groups or of those that might conflict with the law firm your firm is about to merge with.
It's a rough time. Let's all be a little more careful of our social capital there.
We're going to need it.
Decide. The first step is you must decide that you want to improve the relationship. The precursor to this step is recognition - recognizing that the relationship needs improving - but the heart of this is the decision that this relationship matters enough for you to make the effort required to improve it. Without this decision, nothing else matters.
Forgive or let it go. If you feel the other person has done something to cause the rift or break-down, you must either forgive them or let go of your issues with it. Without this step, the steps that follow may help some, but will be limited in their success.
Take ownership. Recognize your role in the relationship, and take ownership and responsibility for it. Yes, deciding and forgiving are accountability actions; but being clear that regardless of the situation you have played a role in the change to the relationship is critical to your success in repairing any damage. Otherwise you are only blaming the other person - which cripples your chance for improvement.
Make your intention clear. Once you have decided to take actions to improve the relationship, your behaviors will change. Take the time to explain your decision and your intention to improve the relationship. Let the other person know that both the situation and the person matter to you, and you want a better relationship. This cements your commitment and communicates your intention to the other person.
Assume positive intent. While I have long believed this concept in a variety of situations, a colleague recently expressed it this way and it makes the idea completely clear. Assume the other person was - and is - acting in good faith. Will you be wrong sometimes? Perhaps. But by starting from this assumption you will immediately change your perception and therefore your behaviors toward that person.
Listen more. We all know how important listening is and how good it makes us feel when we are truly being listened to. Grant that gift to the other person. Listen intently, carefully and actively. Not only will you understand them (and their perspective) better, but they will trust you more and the relationship will build from their perspective.
Make an effort. Deciding is one thing. Doing is quite another. If you want better relationships, you must make the effort - it will seldom, if ever, happen automatically.
For the full post (well worth reading) click here.
DE FACTO couples disputing about property after splitting up, and siblings fighting over their parents' wills, are increasingly using mediation rather than dragging their battles through the court system.
The latest figures show that NSW Supreme Court registrars had done as many mediations in the first half of this year as they had done in total last year as people realised they could sort out their disputes on their own terms, in privacy, rather than in front of a judge, the Attorney-General, John Hatzistergos, said.
Most disputes were resolved without going any further, freeing up courts and judges for other matters, he said. "It is very encouraging that so far this year 59 per cent of the mediation sessions have concluded with the litigants resolving their dispute," Mr Hatzistergos said.
Before further discussing the problems created by the Thottam holding,I'm providing a "brief" of the case about which I ranted and raved earlier here today.
A mediation confidentiality agreement entered into by the parties in Thottam provided that “all matters discussed, agreed to, admitted to, or resulting from ... [the mediation meeting]...
"shall be kept confidential and not disclosed to any outside person . . . ;
"shall not be used in any current or future litigation between us (except as may be necessary to enforce any agreements resulting from the Meeting), and,
"shall be considered privileged and, as a settlement conference, non-admissible under the California Evidence Code in any current or future litigation between us.”
One of the parties contended that a chart drawn up and signed by the parties during the mediation,
was sufficiently certain to be enforced according to its terms; and,
was admissble into evidence under section 1123(c) despite its failure to satisfy any of 1123(c)'s requirements.
Evidence Code section 1123(c) provides that a "written settlement agreement prepared in the course of, or pursuant to, a mediation, is not made inadmissible, or protected from disclosure . . . if
"the agreement is signed by the settling parties and any of the following conditions are satisfied . . .
"(c) all parties to the agreement expressly agree in writing . . . to its disclosure."Id. (emphasis added).
PROCEEDINGS IN THE TRIAL COURT
Without finding that the settlement "chart" constituted a "written settlement agreement" under section 1123, the Thottam trial court required one of the parties to testify about otherwise confidential mediation communications because the Confidentiality Agreement required the disclosure of mediation confidences "necessary to enforce any agreements resulting from the [mediation.]"
Apparently before Elizabeth could testify, the civil action to enforce the alleged settlement agreement was consolidated with other proceedings in the Probate Court,
at the trial of the consolidated matters, the Probate Judge refused to accept the settlement chart into evidence because it did not comply with the provisions of section 1123(c).
THE APPELLATE DECISION
the appellate court reversed the Probate Court's decision.
Section 1123(c)'s requirement that all parties to a mediated settlement agreement "expressly agree in writing . . . to its disclosure,"
may be satisfied by terms contained in a writing other than the alleged settlement agreement itself; and,
may be satisfied by terms contained in a writing executed before any alleged settlement agreement has purportedly been entered into.
Here, the Confidentiality Agreement satisfied those requirements; and,
The skeletal written settlement chart was enforceable because its material terms were, or could be made, certain.
Because the proceeding in which Appellant attempted to introduce the alleged settlement agreement was an action "to enforce what he claims is a settlement agreement reached in mediation," and,
the parties carved out of the Confidentiality Agreement any discussions that were "necessary to enforce any agreements resulting from the [mediation]"
the Confidentiality Agreement satisfied the requirements of section 1123(c); and,
the skeletal Settlement Chart was therefore admissible in evidence under that subsection.
This opinion threatens to blow a hole in sections 1119 and 1123 large enough to obliterate their protections -- protections thathave been repeatedly enforced to the letter of the law by the Supreme Court in its fairly recent Fair v. Bahktiariopinion -- holding that parties to a mediated settlement agreement must include in it an express provision that they intend to be bound thereby -- and Simmons v. Ghaderi in which the Court held that parties cannot impliedly waive confidentiality nor be estopped from asserting it.
Most Confidentiality Agreements I've seen (and used) naturally carve out an exception for the enforcement of a settlement agreement. If you sign such an agreement after Thottam, you risk the enforcement of a non-1123-compliant "settlement agreement" and risk being required to disclose otherwise confidential mediation communications on the sole ground that one of the parties alleges that the opposition entered into an enforceable settlement agreement during the mediation.
Were I attempting to resist the disclosure of mediation confidences my adversary claimed should be fair game under Thottam, I'd contend that the Thottam Confidentiality agreement, and hence its carve-out, was unusually broad and that the Court's holding should therefore be read narrowly and limited to its facts.
As California lawyers know, the Second Appellate District has jurisdiction over matters litigated in the Los Angeles Superior Court. It is therefore particularly important to take a look at the impact this decision might have upon matters mediated by the neutrals on that Court's pro bono or party pay panels. All such parties are required to sign a Confidentiality Agreement that protects from disclosure all mediation-related "written" and "oral communication[s] made by any party, attorney, neutral, or other participant in any ADR session" except "written settlement agreement[s] reached as a result of this ADR proceeding in an action to enforce that settlement."
Under Thottam, a colorable argument could be made that the mandatory Superior Court Agreement's confidentiality "carve-out" should be treated as either:
an express agreement by the parties to waive confidentiality for the purpose of enforcing "written settlement agreement[s]" even if they do not satisfy the requirements of section 1123(c); and/or,
a part of the alleged settlement agreement so that the two agreements together (confidentiality carve-out + non-compliant settlement agreement) satisfy the requirements of section 1123(c).
What to do? Don't sign any Confidentiality agreement that could possibly be interpreted in a manner similar to the one subject of Thottam unless you want to risk the disclosure of mediation confidences arising from a writing that does not comply with section 1123(c).
You can certainly refuse to sign the Superior Court's agreement in light of the Thottam holding. I don't know as a matter of Court policy whether that limits parties' ability to use the Court's pro bono or party pay mediators.
I'd have to say that this case puts confidences made in mediation sessions controlled by the Superior Court's Confidentiality Agreement at risk whenever one party is contending that the other entered into an agreement pursuant to a signed term sheet.
it turns upon the interpretation of one ambiguous sentence in the parties' confidentiality agreement which I'm almost certain was not meant to create an exception to (or satisfy the requirements of) Evidence Code section 1123(c)
it shows a remarkable persistence in the trial and appellate courts of the desire to enforce term sheets in non-compliance with the Evidence Code, privileging finality over the the parties' reasonable expectations that all the proclamations about confidentiality will be honored.
it creates uncertainty in the law, making it difficult for attorneys to guide their clients before, during and after mediation proceedings.
This is a ripe area for malpractice actions -- binding parties to agreements they later claim were not reached. The Supreme Court keeps saying -- we mean what we say (Simmons v. Ghaderi) -- no exceptions to the requirements of 1123(c). Nevertheless, the trial and appellate courts find enforcing skeletal mediation term sheets (this one was a chart) nearly irrisistable. They just can't seem to get their minds around the idea that the point of mediation -- a non-legal process -- is to create a durable agreement that the parties all want to enforce.
If a mediated agreement were a consumer contract, there'd be a cooling down period during which the "buyers" could re-think a decision made in the heat of the moment with mediators and attorneys leaning on them to settle or else . . . . you know . . . whatever the parade of horribles is.
I'm not suggesting that mediators and attorneys know they are abusing the power of their position and authority to "persuade" the parties to accept a settlement that leaves the taste of injustice in their mouths. We just sometimes forget how much power we possess and how overwhelming our importuning can feel to someone unfamiliar with the legal system. Think about how helpless you feel trying to communicate with someone who speaks another language.
I've observed mediations in which the mediator -- repeatedly and, it can only be said, deliberately -- abuses his or her authority to gain the consent of parties who are clearly not comfortable with settling their case on the terms proposed and are certainly not satisified with the "deal."
Keep 'em in the room; wear them out; highlight their fears; diminish their hopes and then, when they're at their weakest, put a pen in their hand, ask them to sign and then elevate that signed agreement above all else because what we're after here is efficiency, brother, not justice -- a term too many mediators feel forced to put in quotes. "Justice." As if it could possibly be anything other than a cynical joke.
OK. I misused this post to rant.
I'm going to come back and "brief" this case for you next, highlighting the traps for the unwary and commenting on the form agreement used by the Los Angeles Superior Court ADR panel -- a form that is now mandatory.
HEAD'S UP FOR THE NEXT POST NEW LAW STUDENTS -- THIS IS WHY IT'S IMPORTANT TO LEARN HOW TO DE-CONSTRUCT A LEGAL DECISION AND TEASE OUT THE HOLDING FROM THE RATIONALE, THE RULES AND THE DICTA.
This Met News report, accurate as it is, doesn't do justice to the traps and troubles lurking here.
Evidence Code Sec. 1123(c)'s exception to mediation confidentiality--providing that a written settlement agreement prepared in mediation is not made inadmissible or protected from disclosure if signed by parties, and all parties expressly agree in writing to disclosure--applied in appellant's civil action to enforce chart prepared during mediation and signed by all parties which appellant claimed was a settlement agreement because estate beneficiaries, in agreement to mediate dispute over distribution of assets, agreed all matters discussed or agreed to in mediation would be kept confidential and not used in any litigation among them "except as may be necessary to enforce any agreements resulting from" mediation, and because chart--setting forth material terms which were sufficiently certain to provide a basis for determining what obligations to which parties had agreed--was a "settlement agreement."
Estate of Thottam - filed August 13, 2008, Second District, Div. Four Cite as 2008 SOS 4917
Tom noted that while most of the article addresses the management of client and adversary expectations, it concludes with these paragraphs:
Once you know who the mediator will be, always contact him or her and try to meet in advance of the mediation. If that is not possible, have a pre-mediation telephone conference. Focus only on the strengths of your case: If you represent a plaintiff, talk about the clear liability evidence, significant damages, your client's expectations of a big award, problems with the credibility of the defendant, and your willingness to try the case. Set the bar high. If you represent a defendant, focus on the strengths of your defense, including technical defenses, any persuasive evidence, and any credibility issues the plaintiff might have. Set the bar low. From both perspectives, provide the mediator with everything that serves your interests. [emphasis in the original]
At the mediation, continue this effort and work even harder at it. If the other side convinces the mediator that you will accept a lesser result than advertised, your chance of success will plummet (and you may end up facing a very unhappy client). On the other hand, if you convince the mediator that your adversary is willing to give more to settle than is on the table, you may well be on the way to having a successful outcome and a satisfied client.
Hey!! AmLaw Editor!! Are you seeing these cartoons? Are you hearing the laughter in the hallways breaking the stress of daily practice? Are you understanding how many more pairs of eyes Fincher's work will deliver to you and your advertisers?
Maybe you need to see this one:
Maybe Fincher just won't let his work appear there? Or is he holding out for syndication in the New York Times? The Wall Street Journal? My small reader pool LOVES these and now they can subscribe via RSS feed over at the LawComix Blog.
This is how you know I'm still as much a lawyer as I am a mediator.
The answer is yes and no.
But you can help change the "no" to a yes.
That's the hope part.
Here's the dispiriting part --The answer will not become "yes" if the parties continue to primarily engage in position-based distributive bargaining sessions in separate caucuses.
My own professional experience (and the behavioral research of which I'm aware) suggests that Mr. Kennerly's Unicorn will only come into a room in which an interest-based negotiation is taking place, one in which there is at least one joint session among the baragaining parties.
But first a story.
This very morning I failed to settle a very small case that is poised to become a very big case with cross-actions for legal malpractice and malicious prosecution.
The delta between the Plaintiff's final demand and the defendant's final offer?
And I offered to throw in half the delta myself by making a contribution to the presidential candidate/s of the parties' choice. Shock value.
The parties' failure to achieve settlement couldn't have been about money could it?
Why not? Because it was economically irrational not to settle. Which is not unusual. Because there is no rational economic man.Because we are incapable of making a decision in the absence of emotion. /**
Although some economic decisions are made outside a social context, they are a minority. Social dynamics, many economists believe, are at the core of economic decision making—that is, decision-making about resource acquisition and expense allocation. What I decide affects you, what you decide affects me, and, even more to the point, I care how I fare economically compared with how you fare.
I send a client a bill for $15,000. He pays $9,000, refusing to pay the additional six because he believes I didn't earn it or that I did my job badly or that I didn't communicate to him all of the items I would naturually include in my bill. There is a written agreement but no attorney fee clause. It will cost me at least $3,000 in attorney fees to collect the six. My client offers to pay me half of what is owed.
Do you have the hypothetical in mind? What would the rational economic man do?
The rational economic man would take the $3,000 because he cannot do better at trial.
Did rational economic man appear at the mediation this morning? Of course not. Because he is a Unicorn! He doesn't make decisions based upon numeric calculations or emotionless cost-benefit analyses -- which is why I knew the parties would not accept my gap-closing political contribution suggestion (whew!)
Why Rational Economic Man is a Unicorn
In a social-economic experiment known as the Ultimatum Game, many researchers have found that when one party offered less than half the money subject of the game, "the other player often rejected it, even though by doing so he end[ed] up with nothing." Id. Dugatkin describes the results of one research project involving this Ultimatum Game as follows:
Alan Sanfey, Ph.D., and his colleagues at Princeton University examined the Ultimatum Game with 19 subjects in the role of responder and . . . observe[d] their brain activity. They found that when unfair offers (deﬁned as those of less than half the resource) were made, responders often rejected them. As they did so, the area of their brains associated with negative emotional states (in this case, the bilateral anterior insula), rather than those associated with complex cognition (in this case, the dorsolateral prefrontal cortex) were most active. The more the offer deviated from fair, the more active was the bilateral anterior insula when such an offer was rejected. Anger at being treated unfairly by other players appeared to override rational economic reasoning. In the minority of cases when the offer was accepted, the dorsolateral prefrontal cortex was most active.
We, like the capuchin monkeys mentioned yesterday, will deprive ourselves of thousands, tens of thousands, even millions of dollars if we believe the compensation being offered is so little related to our value or our loss that it seems unfair. We will not pay money at the point of a gun nor accept money offered to us by villains or cheapskates.
Mediation, Money and Justice
In today's semi-hypothetical mediation, the $3,000 offered felt too unfair to the plaintiff and the hypothetical $6,000 demanded felt too unjust to the defendant for the parties to reach a rational economic deal. The parties' potential to achieve settlement was also seriously undermined by the degree of anger they expressed toward one another and the way in which they had villified one another - "rich deadbeat" on one side and "dishonest fiduciary" on the other.
I am neither magician nor miracle worker. Nor am I in the social work or therapy business. I do, however, know that when parties to a lawsuit are hopping mad and believe that the opposition behaved immorally, money is unlikely to change hands.
In an effort to defuse the anger and de-demonize the parties, I held two joint sessions -- one that was not coached and one that was. Then I separated the parties for the purpose of conducting a distributive bargaining session (she offered x; he counters with y, etc.)
In both the joint session and in the separate caucuses, I strove to humanize the parties for one another; attempted to reframe their behavior in a less villianous light; and, assisted them in conducting as rational a cost-benefit analysis as possible. I also helped the parties reality test their beliefs about the likely outcome at trial and to evaluate the likelihood that the strength of their feelings today would translate into a hearty appetite for further, higher-stakes litigation two years down the line.
So What Can You Do?
I would love to deliver a stirring tale of a heroic mediator helping parties settle their dispute in the early stages before the threatened action and cross-actions were even filed. But I can't. This is more art than science and compared to my 25 years of experience as a litigator, I'm still a little green as a mediator after four years of full-time neutral practice.
Let me just say this. Mediating settlements in the early stages works more often than it fails, particularly if you do one or more of the following:
hire a mediator who can rock and roll with the process rather than one who is a one-trick pony -- head-banger, or evaluator, or prophet of doom; peacemaker, or rabble-rouser or King of the Distributive Bargain -- your mediator should be able to play all or any of these roles as the situation demands;
if you're angry and if you have villified opposing counsel or the opposition party, take a deep breath, sit down at your computer and write down the best, the mid- and the worst-case scenarios (I know you've done it already; but take a fresh look again right before the settlement conference)
share these evaluations with your client
if a trustworthy mediator with whom you've worked before suggests that it would be useful in joint session for your client to express his irritation, disappointment, anger or any other feeling that might interfere with his ability to make a rational decision, don't reject it out of hand
help your client de-demonize the opposition, reminding him that the "other side" is human and therefore fallible and is rarely downright evil
remind your client that many disputes that seem to arise from malicious conduct actually stem from faulty communication
know your bottom line and stick to it unless you genuinely learn something that makes you see the entire dispute in a different light, remembering that "a foolish consistency is the hobgoblin of little minds"
despite everything I've now said about litigants behaving irrationally, as I've written elsewhere in greater detail, Harvard negotiation gurus Deepak Malhotra and Max H. Bazerman suggest that negotiators too often confuse hidden interests and constraints with irrationality. The mistakes and solutions when this is the case?
Mistake No. 1: They are Not Irrational; They Have Hidden Interests -- find out what they are and you may well be able to resolve the dispute and settle the litigation without putting any more money on the table or making any further concessions;
Mistake No. 2: They are Not Irrational; They Have Hidden Constraints -- keep one ear to the ground for hidden constraints, explore them with the mediator, opposing counsel or the opposing party; often those constraints can be problem-solved away;
Mistake No. 3: They are Not Irrational; They Are Uninformed -- listen and respond; respond and listen. You will find that EACH of you is uninformed about something that will likely make a genuine difference in the manner in which the litigation is resolved.
If your opponent cannot or will not see reason, there's always the joy of just trying the darn thing.
Here are the first four suggestions, click on the highlighted article for the full discussion.
Efforts Should Focus on the Following:
1. Establishing a ceasefire to allow for the treatment & evacuation of the wounded and to establish a safe humanitarian corridor for civilians to evacuate. Establish access for Red Cross & other NGO’s.
2. Get all military forces to pull back either completely or partially to establish a demilitarized buffer zone. Deweaponize the area. This will reduce the number of clashes.
3. Establish a more permanent ceasefire and begin negotiations on the long-term status of South Ossetia.
4. Make sure rebel groups stand down and are part of negotiations.
Max Kennerly over at Litigation and Trial has graciously and profusely responded to our call for comments about the road-blocks to achieving optimal negotiated resolutions to litigated disputes.
Because Max and I are straining toward the same goal every litigant does when the burdens of a lawsuit begin to outweigh its anticipated benefits, I'm going to include my readers in the conversation.
Our Interests are Adverse, Not Mutual or Intertwined
Max suggests that the hypothetical "business school" negotiated resolution doesn't provide litigators with much guidance in resolving litigated disputes because the buyer-seller-mutual-or-intertwined-interest template cannot be comfortably laid over a conflict between parties whose interests are entirely adverse. As Max explains:
The parties to a lawsuit do not have intertwined interests: they have directly adverse interests. Unless there's some possibility of a future relationship, the defendant doesn't want to resolve the conflict: they want the plaintiff to drop their frivolous claim. In their mind, their best alternative to a negotiated agreement ("BATNA") is for the plaintiff to crawl in a hole and die.
Same with the plaintiff. Unlike buyers and sellers, who usually don't get much joy out of their 'conflict' as a conflict, the plaintiff usually prefers imposing a conflict on the defendant (who the plaintiff believes cast the first stone) in pursuit of justice, an imposition they will only relieve for at least "full" compensation.
The problem is that most parties don't consider their claims to be assets; the problem isn't that there's emotional baggage around the economic understanding, it's that the parties interpret their dispute as fundamentally non-economic.
Before moving on to adverse/intertwined/mutual interests, I want to emphasize that what the parties "interpret . . . as fundamentally non-economic" is the key to the settlement of litigated disputes -- not a roadblock.
Nor can the feelings that accompany litigation be called "emotional baggage" unless we interpret the desire for justice as pathology.
People seek out lawyers rather than therapists to resolve the emotional issues that accompany conflict -- because they believe themselves to be victims of injustice and lawyers are in the justice business. Our clients have not simply suffered an injury (tripped over their own feet) but have a wrong (stumbled over a trip wire placed in their path by a malicious or careless actor). We can explain until we're blue in the face that money is the only remedy the law can provide. Our clients will continue to seek justice and will not easily settle for money alone.
"The Unicorn Settlement"
Max asks that I acquaint him with the Unicorn -- the state "where two hostile parties on the verge of a lawsuit get lawyers, almost file suit, and then, through deft representation, settle their differences peacefully and move on" Unicorns. Excluding business disputes where the parties have an existing and potentially mutually beneficial on-going relationship, this type of settlement, says Max, is a myth. He explains:
I entered the law expecting The Unicorn to be rare but real; by this point, I have been trained by defense lawyers not to bother to check for it. I still usually do, throwing out what I think is a perfectly reasonable offer early on, which is routinely ignored or dismissed by a letter that gratuitously refers to my claims as baseless, frivolous, or made in bad faith.
So that's my biggest question to you: how do you suggest I get defendants, prior to the courthouse steps, to even enter the mindset that there's a valid claim and mediation / settlement should be considered? Reframed in words closer to your post: what can I do to (a) get the joint session to happen and (b) ensure everyone's in the right mindset?
The Conditions in Which Unicorns Flourish
When I started practice -- in 1980 -- I did so in a small community -- Sacramento -- where everyone was a "repeat player" with everyone else. Perhaps more importantly, you could file a suit in year one and try it to a jury in year two. Not only defense counsel, but insurance adjusters, knew which plaintiffs' attorneys would try cases and which would not. They also knew which ones could persuade a jury to bring back a hefty award.
Though I only handled personal injury litigation for my first two years of practice (after which I changed firms and moved on to commercial litigation) I saw dozens of "unicorns" in my first few months of practice. As the junior-most attorney in a small P.I. practice, I settled hundreds of cases without ever filing a lawsuit -- on the telephone with insurance adjusters. (A really, really good reason to leave PI practice, but that's another story).
I settled these cases in the world of "three times specials" at a time when and in a place where everyone knew one another and used a common metric to evaluate potential liability and damages. In that environment, Unicorns flourished.
Unicorn Hunting in the 21st Century
Max isn't asking me to shoot ducks in a barrell here. He's asking me to deliver the holy grail of mediation -- how to convene an early settlement conference in which the parties (and their attorneys) are united in a desire to settle litigation without protracted discovery or pre-trial procedural wrangling.
I hate to keep leaving my readers on the edge of a satisfactory resolution, but I DO have work to do and will return to this -- and Max's further observations -- soon, really soon. Stay tuned. And join the conversation by leaving your own comments here.
sometimes I don't want to discuss the case. Sometimes either we're at the end of the road or you're not even on our road, and I'm not going to humor you and your insufficient offers and your attempt to use social influence on me. Indeed, many of my best offers come after cancelling settlement conferences before they happen.
Just something to keep in mind. Every trick you know is a trick that can be played on you and/or your client.
While Craig recalls a mediation in which a joint session hardened the parties' positions as follows:
The mediator decided at the last minute that it would be nice to see if we could all meet and agree in a joint session.
In his defense, he had the advantage of reviewing the positions of both parties in their submittals. There was no warning that the mediator was going to try to help the parties come to an agreement in a joint session.
What I remember most was my client getting so incensed by the positions of the other party in the joint session. Unfortunately my client hardened his position – not helpful in mediation – and apparently the other party did the same. I think the theory about eye-to-eye meeting and negotiations is absolutely correct.
The problem is that parties bring so much emotion into a settlement discussion that I think they need to stay separate from the people creating the emotion before they can calmly assess the best course of action.
What interests me most about Craig's comment is this:
I think the theory about eye-to-eye meeting and negotiations is absolutely correct. The problem is that parties bring so much emotion into a settlement discussion that I think they need to stay separate from the people creating the emotion before they can calmly assess the best course of action.
I'm going to be writing about this conversation all week and invite others to please comment.
Right now, I'd like anyone interested in the resolution of conflict close to home (the neighbors; the PTA President; the woman sitting in the cubicle next to you stripping laquer from her nails with industrial strength polish remover; the entire HR department; your boss, etc.) to read It Took a Villain to Save Our Marriage in the Style section of this Sunday's New York Times.
Here's the "money shot" for anyone who has ever mediated neighborhood disputes in a community mediation center as I do pro bono.
Then while the rest of the block kissed goodnight, I stomped down the street in the dark to Blocker’s house and pounded on his door.
He opened it, shirtless and calm; it unnerved me. I’m sure I looked crazed. I felt my face puff up. “Stop taking our signs!” I said.
There was a shift. It was he who had the advantage now — I was on his porch, and drunk.
But Blocker didn’t say anything mean. He didn’t seem angry, as he should have been, that I had bothered him late at night; he didn’t threaten to call the police. We stood close, inches away. There was an intimacy in our strange hate.
“I didn’t take them,” he said. “Seriously. The city picks them up sometimes. I know where they put them. I could check if you want.”
No, I didn’t want. But I thanked him, and walked home both shaken and comforted, and thinking Anthony would kill me if he knew I had crossed enemy lines like that, alone. I didn’t tell him.
There was one more encounter. Blocker drove by me in his car. He slowed and rolled down his window, and instead of grunting or sneering, he said, “Did you find your signs?”
“No. I didn’t look.”
We exchanged a few more words — about the weather, his dogs — but it was quick. He drove off, and a few weeks later we moved.
A trained and skilled mediator would take advantage of these two fleeting moments of concern on the part of "Blocker" who is the bully in this story with a heart-rending conclusion.
Now assume that these people -- all three of them and maybe a few additional neighbors as well -- belong to a homeowners' association with the power to fine the HOA "outlaw," making the fines a lien against his property. Now its a legal dispute.
Ask yourself, what do the parties' legal positions have to do with the resolution of the conflict?
Leave your thoughts here -- down in the comments section -- and I'll be back soon to discuss the New York Times conflict resolution hypothetical based not only on my experience mediating the resolution of litigated commercial disputes, but also based on my pro bono community mediation experience and on the studies that earned me an LL.M that's purportedly not worth the paper its printed on (a judgment that could be just as easily applied to my Bachelors Degree in English Literature were it not for its transmogrification into a ticket to practice law).
Bonus Question: do we really want to dedicate our lives to the satisfactory resolution of conflict -- which is what the law, after all, is all about -- or would we rather, like the author of It Took A Villain, take the pleasure to be had in the state of high dudgeon, self-righteousness, and passionate engagement with someone who is an easy target to blame for our own unhappy life circumstances?
Double Bonus Question for Lawyers Practicing in Los Angeles: Would you let the Los Angeles Superior Court choose your trial attorney or your marriage and family counselor from a panel of people who have had 28 hours of training in their "professional" field of practice just because the first three hours are free?
most . . . plaintiffs who decided to pass up a settlement offer and went to trial ended up getting less money than if they had taken that offer . . .
Plaintiffs, however, are not the only ones who made the "wrong" decision -- defendants were mistaken in 24% of the cases. Defense errors, however, were far more costly.
getting it wrong cost plaintiffs . . . about $43,000 . . . For defendants, who were less often wrong about going to trial, the cost was . . . . $1.1 million.
What to do?
It's no answer to say " take the last best settlement offer," though one party or the other will 80 to 90 percent of the time and often on the courthouse steps, i.e., at the point of a gun when decision-making is at its most flawed.
Nor, I must concede, is the answer simply mediation, which is, after all, pretty much a pig in a poke. Why? Because mediation practice ranges all the way from
to a mediator who knows only how to repeat "trial is expensive and the result uncertain"
to a settlement officer who does nothing more than shuttle numbers back and forth between two rooms
to a "transformative" mediator who allows the parties free reign to "vent" their "feelings" without helping them get a grip on the very real and serious consequences of the negotiated resolution that has been proposed to them.
A friend of mine who is a psychoanalyst once told me that patients get better in therapy despite their analysts' "technique." It's the relationship that's curative, she told me. A patient in need will find the water of healing in the desert of a therapist's theory. If the same can be said of mediation -- that it's the relationship that's curative -- the question that naturally arises is whose relationship?
fundamental attribution error -- the tendency to over-emphasize personality-based explanations for behaviors observed in others while under-emphasizing the role and power of situational influences and reversing this error when the behavior at issue is our own.
Just-world phenomenon — the tendency for people to believe that the world is "just" and therefore people "get what they deserve"
We get so stuck in our positions that we fail to ask diagnostic questions that have been proven to result in significantly better negotiated outcomes for both parties.
My friend Judge Alexander Williams -- the soon to retire full-time settlement Judge in the downtown Los Angeles Superior Court -- has the following poster hanging in his jury room.
The surface is what the lawyers know.
The depth and breath; the texture and particularity; the details of the dispute and the desire for justice that exists on both sides, is known only to the litigants. And they haven't (and won't) tell you what they know or want.
Why you should never leave a mediation or settlement conference without letting a skilled mediator facilitate a joint session in which the litigants can explore their joint interests and conflicting goals will be the subject of my next post.
I have alot more to say about this but for the moment am simply linking you to an article at Cognitive daily demonstrating the known fact that you are far more likely to persuade another if you are making eye contact with him.
And still opposing parties resist sitting in the same room with one another when attempting to settle litigation!
There is a considerable body of research showing that eye contact is a key component of social interaction. Not only are people more aroused when they are looked at directly, but if you consistently look at the person you speak to, you will have much more social influence over that person than you would if you averted your gaze.
"What happens," asks Katz, "when a mediator is accused of breaking mediation confidentiality, the thing many mediators say is essential to their craft?"
The answer: probably nothing.
As Katz reports, the Simmons v. Ghaderi opinion that made mediation confidentiality iron-clad, arose from a mediation in which the neutral provided a sworn declaration to the Court reciting "details about [his attempt] to persuade Ghaderi to sign her consent," among other things.
Ron Kelly, an architect of the state's confidentiality statutes, opined that the Declaration filed by the mediator in the Simmons case breached "Evidence Code Section 1121, which forbids mediators, in most instances, from reporting to the courts anything that takes place in their mediations." Kelly concluded by saying,
If you were going to go after a mediator for malpractice, it seems like an open-and-shut case of violating the law would be a good start, don't you think?
Yes I do. Yet local attorneys and mediators seem unconcerned. Lucie Baron of ADR Services told Katz thather panel of neutrals had no policy on the matter because the mediators -- after all -- are attorneys and independent contractors to boot. They don't, she noted, ask her for legal advice.
Not a bad call on Baron's part. But what about the neutrals?
Their lack of attention to the spectre of "open-and-shut" malpractice litigation is perplexing. Though the Simmons mediator could colorably claim that the law of confidentiality was unsettled at the time he submitted his declaration -- or that the factual scenario before him permitted the disclosures made -- in a post-Simmons environment, neutrals cannot be so sanguine. Any disclosure of any communications during a mediation by the neutral would likely be actionable so long as it caused one of the litigants appreciable harm.
When someone is unhappy with a result -- as too many litigants of mediated settlements are /* -- they search the field for people to blame.
So far, mediators haven't been among the potential culprits.
I wouldn't count on that situation lasting much longer.
So why would the S[pecial Litigation Committee] release [Wilson Sonsini] and Larry Sonsini? The SLC wrote that it weighed the opinion of a legal ethics expert as well as testimony and documents related to Sonsini and the firm’s roles at Brocade. It also listened to Sonsini and his firm’s “contentions that Brocade employees misled WSGR about stock-option grants” and that the firm had negotiated a good settlement with the SEC and helped avoid DOJ action against Brocade. The committee also considered the firm’s longstanding relationship with Brocade and the firm’s “willingness” to help the company resolve any “outstanding questions” about the backdating.
A decade ago, there were only a handful of mediation programs in bankruptcy courts.
Long associated with family law disputes, mediation programs were slow to catch on in complex business litigation, including bankruptcy cases.
But that's changing.
More than two-thirds of the 90 bankruptcy courts have mediation available, according to Robert Niemic, senior attorney at the Federal Judicial Center. Even more offer some other form of alternative dispute resolution, such as judicial settlement conferences.
In the U.S. Bankruptcy Court for the Central District of California, more than 3,800 cases have been referred to mediation since 1995. About 64 percent of those cases were resolved through settlements.
To keep costs down, the first day of mediation is free. Parties choose from a list of 200 attorneys and non-attorneys, such as accountants and financial experts, who volunteer as mediators.
Chief Bankruptcy Court Judge Barry Russell, who launched the mediation program in 1995, said that most cases settle in a day, producing major cost savings for both the court and the parties involved.
It is no surprise that increased aggression in a naturally aggressive proceeding has negative consequences. For example, parties that often meet for the first time at a mediation or settlement conference arrive not trusting or respecting each other, making resolution much more difficult. Pynchon suggested a somewhat radical solution to the email problem -- live meetings with opposing counsel. She suggested that you routinely have live meetings with opposing counsel throughout the course of a litigation, including perhaps even doing some meetings over a meal. The face-to-face contact would generate the trust and respect needed to resolve issues that always arise during a litigation. I have always advocated live meetings with co-counsel in a multi-party litigation. Email communications (or even conference calls) tend to get out of hand and the parties tend not to pay enough attention to others' positions. I am going to expand that practice to opposing counsel.
One other thought, that I do not know if Pynchon will agree with. Those who still avoid email and continue using letters as a main communication means are not off the hook. I started practicing when letters, not emails, were how you communicated with opposing counsel. Those letters tended to be far more aggressive than the attorneys were in a live conversation. And I suspect people tended to read extra aggression into the letters they received. I do not know if aggression is stronger in emails than letters, but the same problem exists whether you hit send, hit print or use a pen to write to opposing counsel.
Today, the Supreme Court handed down a unanimous ruling in the long-awaited Simmons v. Ghaderi case about which I've commented on many occasions -- both on the importance of the confidentiality laws the Supreme Court held were air-tight today and on the process itself as a common example of a failed mediation proceeding.
Highlights from the opinion:
"The Legislature chose to promote mediation by ensuring confidentiality rather than adopt a scheme to ensure good behavior in the mediation and litigation process."
[T]he legislative history of the mediation confidentiality statutes as a whole reflects a desire that section 1115 et seq. be strictly followed in the interest of efficiency. By laying down clear rules, the Legislature intended to reduce litigation over the admissibility and disclosure of evidence regarding settlements and communications that occur during mediation. (citation omitted). Allowing courts to craft judicial exceptions to the statutory rules would run counter to that intent."
In Foxgate, we reasoned we "were bound to respect the Legislature’s policy choice to protect mediation confidentiality rather than create a procedure that encouraged good faith participation in mediation. Thus, we held that evidence of a party’s bad faith during the mediation may not be admitted or considered."
Here's the appellate decision that was reversed on nearly every ground raised in Justice Aldrich's compellingly well-reasoned dissent.
Number three on the list of what not to do this summer is --
Being rude to support staff. If you say thank you to everyone who helps you, you would be amazed at how the staff will respond. Support staff work hard to help make you and the firm look good to clients and other third parties. DO NOT treat them like doormats. DO treat them with respect and show your appreciation.
Why do we mention this in a negotiation law blog? Because you need to know who the secret stakeholders are when you are attempting to resolve any conflict or broker any deal. They are not who they appear to be.
And, head's up!! "Your"secretary has been "practicing law" for decades. S/he knows the judges, the court reporters, the clerks at the courthouse and the pecking order in the law firm. S/he also knows where the bodies are buried.
The standard residential purchase contract in California is produced by the California Association of Realtors® (CAR). It contains two sections that are easy to overlook or to take as “boilerplate”, but that can be very important if things go awry between the parties. One of those sections deals with attorney fees, providing that, in the event of any proceeding between buyer and seller, the prevailing party shall be entitled to attorney fees and costs from the non-prevailing party. The attorney fee section contains an exception, however, and that exception is spelled out in the portion of the contract referring to mediation. There it is said that, if either party initiates an action “without first attempting to resolve the matter through mediation, or refuses to mediate after a request has been made, then that party shall not be entitled to recover attorney fees… .” [my emphasis] /*
When Mr. Thrifty and I purchased our house in '02, we were presented with one of these form contracts. I'm a lazy form contract signator myself. Negotiation training or not, I generally assume these contracts are "take it or leave it" and I sign them accordingly. /**
Not Mr. Thrifty.
"What's the procedure?" I recall him pressing our real estate agent. "When is the demand for mediation supposed to be made and how are the parties supposed to conduct it and what happens if the parties can't reach agreement on the mediator to conduct the process?"
He was having none of it.
"I'm crossing it out," he said, as blue ink flowed over the mediation provision and our agent let out of small gasp of dismay.
By that time, everyone was so "bought in" to the sale, that Mr. Thrifty's effort to strike the form language prevailed. No mediation necessary in this household!
Beware of Form Contract Language
As Bob Hunt explains, the Lange Court gave the back of its hand to the contention that it was "too difficult" to make the required demand for mediation.
“If the [sellers] could be found and served with a lawsuit by mail, they could have been sent a mediation demand by mail[,]” [held the Court] All that the plaintiff had to do was attempt to mediate before he filed suit; and he didn't. Quoting a related case, the court noted that the mediation provision “means what it says and will be enforced.”
Though it's not surprising to find bare bones ADR provisions in industry form contracts -- bones so bear that their meaning must be litigated -- defeating the purpose of the summary proceedings provided for -- it is surprising to find attorneys continuing to paste form contract language into their client's negotiated agreements. This is particularly troublesome when what's at stake -- the attorneys' fees -- makes the difference between bringing litigation or not or settling litigation or not.
If it's worth putting a clause into your contract, it's worth spending the time to imagine what might happen if circumstances triggering that clause arise. If you're practicing in a firm with both transactional and litigation attorneys, I highly recommend that the wordsmiths run the "standard" ADR, attorney fee, choice of law, and venue provisions by the litigators who have undoubtedly already tested these provisions in the fire of conflict. You won't be sorry you did.
*/ The case -- Lange v. Schilling -- was originally ordered not not to be published. Had that Order stood, the case would not create precedent under California law. As the reader of the linked opinion can see, however, it was subsequently ordered published and can be cited as authority.
**/ The form contract language at issue reads as follows:
Buyer and Seller agree to mediate any dispute or claim arising between them out of this Agreement, or any resulting transaction, before resorting to arbitration or court action. . . . If, for any dispute or claim to which this paragraph applies, any party commences an action without first attempting to resolve the matter through mediation, or refuses to mediate after a request has been made, then that party shall not be entitled to recover attorney fees, even if they would otherwise be available to that party in any such action.
POPULAR ADR BLOGGER GETS SOME FACE TIME IN LOS ANGELES
By Greg Katz
Daily Journal Staff Writer
SANTA MONICA - Nearly everybody in the Southern California mediation community knows the face of mediator Geoff Sharp but not too many have met him.
That's because the New Zealand-based mediator's scruffy mug sits atop his popular ADR blog, Mediator Blah ... Blah ..., at mediatorblahblah.blogspot.com.
Sitting down for coffee at a beachfront hotel with Los Angeles mediator and fellow ADR blogger Victoria Pynchon, Sharp said his blog is what got him his ticket for this trip to Southern California.
He was in town at the request of the Pepperdine University School of Law, giving a lecture at the Straus Institute for Dispute Resolution's annual summer dispute resolution conference last week.
"For someone like me to get to Pepperdine - why would you ask a farm boy like me?" Sharp said, laughing. "The blog's the only way that I talk to these people."
Sharp's witty and concise blog helps chart the course of the online mediation conversation. There are about 150 ADR blogs worldwide, according to one blogger, and many of them link back to Sharp's.
He blogs a potpourri of ADR links, anecdotes and opinions on a wide range of mediation topics, most of them relevant to both local and international audiences.
In one recent post, he chided some "lazy" neutrals who have given parties the impression that mediation is "a process where you show up at a downtown building but never speak to, or even meet, the room full of people with whom you have your problem and whose cooperation you require to solve it."
In another post, Sharp described a mediation in which a lawyer asked him to calculate the hypotenuse of a right triangle.
Sharp said he initially was worried that he couldn't do it.
"But I am pleased to report dear reader, that I was equal to the task," he wrote.
Sharp also broaches sensitive subjects, writing at length about how difficult it is for mediators to build their practices.
But whether the difficulties of mediation are financial or mathematical, he wouldn't think about going back to litigating.
In the late 1990s, Sharp left his litigation practice at Bell Gully, a large New Zealand law firm, to start mediating.
Sharp is now a member of the advanced mediation panels for both of New Zealand's widely recognized mediation training organizations, LEADR and the Arbitration and Mediation Institute of New Zealand.
He also is consulting with the International Mediation Institute on its proposed mediator qualifications standards. Mediator standards are a frequent subject of his blog posts, as well.
He said he relishes the freedom he gained from leaving a big firm, though mediating often proves lonely.
"If you ask why [mediators] blog, it's because we're so solitary," Sharp said.
Becoming an ADR blogger, he said, was like making friends "on the same block in a new town," even though most other bloggers are in other countries.
Sharp said that blogging about mediations, with their strict confidentiality rules, can be complicated.
At first, he would post about specific events in mediations, such as one lawyer who wore his Bluetooth headset throughout a mediation, even when he "went to the john," Sharp said.
Was it blinking?" Pynchon chimed in.
But now, with a wider audience, Sharp focuses on the more philosophical and legal issues in mediation. When he wants to tell a particular story, he embellishes the events that happened in mediation so no one feels their confidential conduct is being publicized.
"I haven't let the facts get in the way of a good story," says the disclaimer on his blog.
Pynchon, who writes the popular ADR blog Settle It Now, at negotiationlawblog.com, said that even when bloggers are careful, mediator blogs can disturb parties. One party recently came to Pynchon asking whether a post referred to that party's case.
Another post, about the California Supreme Court mediation confidentiality case, Simmons v. Ghaderi, provoked the defendant to call Pynchon personally.
"It's like having a cartoon character come to life," Pynchon said of being contacted by someone she only knew through reading briefs and opinions. Simmons v. Ghaderi, 143 Cal.App.4th 410 49 Cal.Rptr.3d 342 (2006).
But despite the occasional hassle, blogging has become a way of life for the two mediators.
"For me, blogging and dispute resolution rest on the same principles: collaboration and reciprocity," Pynchon said.
Sharp nodded his agreement.
"I don't do this profit," he said with a smile. "I do it for ego."
Just in case you're out on the beach, in the mountains, or spending a lazy July 4th week-end around your best friends' swimming pool, here are the ADR-worthy articles you've likely missed in today's Sunday New York Times.
When a distinguished American military commander accuses the United States of committing war crimes in its handling of detainees, you know that we need a new way forward.
“There is no longer any doubt as to whether the current administration has committed war crimes,” Antonio Taguba, the retired major general who investigated abuses in Iraq, declares in a powerful new report on American torture from Physicians for Human Rights. “The only question that remains to be answered is whether those who ordered the use of torture will be held to account.”
The first step of accountability isn’t prosecutions. Rather, we need a national Truth Commission to lead a process of soul searching and national cleansing.
That was what South Africa did after apartheid, with its Truth and Reconciliation Commission, and it is what the United States did with the Kerner Commission on race and the 1980s commission that examined the internment of Japanese-Americans during World War II.
Today, we need a similar Truth Commission, with subpoena power, to investigate the abuses in the aftermath of 9/11.
We already know that the United States government has kept Nelson Mandela on a terrorism watch list and that the U.S. military taught interrogation techniques borrowed verbatim from records of Chinese methods used to break American prisoners in the Korean War — even though we knew that these torture techniques produced false confessions.
It’s a national disgrace that more than 100 inmates have died in American custody in Afghanistan, Iraq and Guantánamo. After two Afghan inmates were beaten to death by American soldiers, the American military investigator found that one of the men’s legs had been “pulpified.”
[T]he reality is that more times than not, American presidents sweep into office proclaiming black-and-white absolutes about their foes, and end up leaving office having used everything from secret talks and back-channel negotiations to full-fledged summit meetings.
This just in from the Met News for California practitioners.
Where minor entered a settlement agreement with a third party tortfeasor by and through a guardian ad litem, and court made an allocation of the medical expenses portion of the settlement in the order approving plaintiff’s compromise, trial court did not err in rejecting plaintiff's later motion to reduce the amount of Medi-Cal lien against settlement proceeds by the same percentage that the settlement bore to the overall value of plaintiff’s case.
Question: how do you determine the "overall value" of the plaintiff's case in order to reduce the lien by the same percentage that the settlement bears to that value? Declaration by the Plaintiff's attorney? Anyone who's actually read this case, do let my readers know!
In a down American economy, litigation tends to increase. More suits are filed. And in my view clients and their plaintiff's lawyers file more questionable suits, i.e., ranging from Rule 11 violations and frivolous to iffy and wasteful. Employee and business nuisance cases are a big chunk of those filings.
A good arbitration panel or mediator will cut to the quality of the suit and its likelihood of success quicker than even the best American judges, who often feel obligated to give bad and iffy cases a wide berth. And good judges understand the problems of the business community and the utility of arbitration and mediation.
Get jurists on your side in your attempt to drive iffy cases into ADR.
Happens all the time; the parties come together to mediate their dispute and find that they haven't really understood their differences or the areas of agreement .
"Your client didn't care about the first shipment of goods?"
"No, it was the second that was the problem."
"What was wrong with the second?"
"They were plaster of Paris."
"What are you claiming as damages .. .. . "
Forget ADR. Pick up the telephone and talk to opposing counsel.
Let's say you meet up with an alien race and you need to bargain with them by radio or some other method of signaling. You don't have any other information other than your knowledge of human beings. What traits should you think are overrepresented in humans, relative to what a rerun of evolution can be expected to produce in an intelligent being? Would you expect them to be more or less benevolent than humans? Should it matter if they have demonstrated superior technology? Should such achievement make you think they are more or less cooperative toward "outsiders"?
I suspect that all of these questions are meant to lead to the conclusion that "people" from more advanced civiliations would naturally be more peaceful, less aggressive and more cooperative with one another than we are.
Even though [our primate forbears the] ustralopiths walked upright on the ground, they retained short legs for 2 million years for the same reason squatness helped out other great apes—for male-male combat. With the advantage in combat, short-legged primates would likely be victorious and gain access to females. That meant passing their genetic traits, like shortness, to offspring.
Could intelligent human beings have evolved without aggression? Certainly.
researchers Male and female [chimpanzees] do not associate in families but in separate hierarchies. Males make females defer to them, with violence whenever necessary, and every female is subordinate to every male.
A female chimp advertises her fertile period with a visible swelling and is then so pestered by males that she may get to eat only at night. . . .
Though bonobos are almost as aggressive as chimps, they have developed a potent reconciliation technique -- the use of sex on any and all occasions, between all ages and sexes, to abate tension and make nice.
Assuming the common ancestor of people and chimps had social behavior that was essentially chimplike, how much of that behavior has been inherited by people? The unusual behavioral suite of male kin bonding and lethal territorial aggression may look as if it has been inherited with little change. Among the Yanomamo, a South American tribe, the number of males who die from aggression is about 30 percent, the identical rate found among Gombe chimps.
Dr. Wrangham said the consistent pattern of aggression seen at all the chimp sites suggests that male chimps have ''a strong emotional disposition'' to be aroused by the sight of strange males, to form coalitions against enemies, to be sensitive to balances of power and to be attracted to hunting. The same disposition could have been inherited down the human lineage.
Turns out Freud was right. Aggression is all about sex. But it's also about tool-making (i.e., weaponry). So we have evolved to be competitive and collaborative. Tool making to ease our work-load and to kill our "enemies." So far, our advances continue to outpace our many attempts to destroy ourselves.
What might have worked for the advancement of other civiliations? If all possible worlds exist, as physicists claim, other worlds may well have developed life in some way other than evolutionarily. Maybe by intelligent design! There's simply no telling. I would, however, speculate that a species taste for its members blood must be balanced by affiliative instincts and activities or its development would be cut short by species-cide.
The take-away for negotiators who are strangers in a strange land?
Learn how to communicate with the aliens. Ask them questions concerning their needs, interests and desires. Tell them about your own. Put down your weapons and back slowly away.
Anyone who is as fascinated by these questions as I am, read this post from Such is Life about whether or not we'd "see" aliens if they arrived on our shores. Answer? Not likely.
our best reasons for some choices we make are understood only by our cells. The findings lend credence to researchers who argue that many important decisions may be best made by going with our gut -- not by thinking about them too much.
Mom always said I thought too much. And Dutch researchers are proving her right (another one for you, mom!)
Dutch researchers . . . recently found that people struggling to make relatively complicated consumer choices -- which car to buy, apartment to rent or vacation to take -- appeared to make sounder decisions when they were distracted and unable to focus consciously on the problem.
Moreover, the more factors to be considered in a decision, the more likely the unconscious brain handled it all better, they reported in the peer-reviewed journal Science in 2006. "The idea that conscious deliberation before making a decision is always good is simply one of those illusions consciousness creates for us," Dr. Dijksterhuis said.
Here's another lesson I learned nearly thirty years ago in law school that the researchers are only now proving -- you just have to feed your brain the information and then, literally or figuratively go to sleep. Start writing and you will write your way into the solution that your brain already knew.
(I also used this technique preparing the depositions of technical expert witnesses -- petrochemical engineers, statisticians and the like)
The Take Away for Negotiators?
Prepare. Ask questions. Have a firm bottom line (or, better yet, fool yourself into believing your bottom line is less or more than it already is).
Then rock and roll!
The more you negotiate (try it at your local retail store) the better your mind will become at improvising the moves necessary -- in the commpletely unpredictable present -- to get what your brain already knows you really want.
According to writer and surgeon Atul Gawande's recent article The Itch, the way the pepper tree in my back yard appears from my bedroom window may be as much as ninety percent memory and only ten percent "data." As Gawande writes:
Given simply the transmissions along the optic nerve from the light entering the eye one would not be able to reconstruct the three-dimensionality, or the distance, or the detail of the bark -- attributes that we perceive instantly.
In other words, perception is not merely reception. "Objective reality" is just the brain's "best guess" about what the eyes observe, the ears hear and the fingers touch.
"The images in our mind," Gawande explains, "are extraordinarily rich."
We can tell if something is liquid or solid, heavy or light, dead or alive. But the information we work from is poor -- a distorted, two-dimensional transmission with entire spots missing. So the mind fills in most of the picture. You can get a sense of this from brain-anatomy studies. If visual sensations were primarily received rather than constructed by the brain, you'd expect that most of the fibres going to the brain's primary visual cortex would come from the retina. Instead, scientists have found that only twenty per cent do; eighty per cent come downward from regions of the brain governing functions like memory. Richard Gregory, a prominent British neuropsychologist, estimates that visual perception is more than ninety per cent memory and less than ten per cent sensory nerve signals.
Gawande doesn't explain how we manage to agree on anything with such impoverished perceptual abilities and richly imagined constructs of "objective reality." I suspect that our insatiable urge to tell one another stories is the primary way we create the collective memories that allow us to agree upon such simple "facts" as "the apple is red and somewhat round," if not necessarily that "the blue Kia entered the intersection after the traffic light turned red."
What strikes me about Gawande's article is not so much the pure science described there, but the way in which opposing parties in litigation resemble "phantom limbs" and joint sessions the mirrors used by physicians to treat the pain "felt" in them.
Recent research demonstrates that amputees' phantom limb pain can be reduced or eliminated by "fooling" the brain into believing that the missing limb is "well." When researchers asked amputees to put their surviving arm through a hole in the side of a box with a mirror inside and to then move "both" arms,
[t]he patients had the sense that they had two arms again. Even though they knew it was an illusion, it provided immediate relief. People who for years had been unable to unclench their phantom fist suddenly felt their hand open; phantom arms in painfully contorted positions could relax. With daily use of the mirror box over weeks, patients sensed their phantom limbs actually shrink into their stumps and, in several instances, completely vanish. . . .
. . . here’s what the new theory suggests is going on: when your arm is amputated, nerve transmissions are shut off, and the brain’s best guess often seems to be that the arm is still there, but paralyzed, or clenched, or beginning to cramp up. Things can stay like this for years. The mirror box, however, provides the brain with new visual input—however illusory—suggesting motion in the absent arm. The brain has to incorporate the new information into its sensory map of what’s happening. Therefore, it guesses again, and the pain goes away.
Litigation separates the parties from one another as radically as an amputation, often under circumstances where the law suit is all they have in common. Like amputees, the parties cannot massage the missing muscle, scratch the irritating itch, or ease the frustrating pain.
When physicians give their patients mirrors and instruct them to move their one remaining arm in concert with its physically re-imagined partner, they conduct a silent concert of healing. With "new" information (hey! there's my other arm and it's not all cramped up!) the brain readjusts and stops sending false signals. The muscle relaxes. The itch is scratched. The pain is relieved.
Joint sessions can be used as mirrors to make missing disputants appear again./* The mediator -- who is trained in this art -- creates an environment (the "box") in which the parties are able to adjust the mis-impressions and correct the mis-communications that make the conflict so difficult to resolve. After a brief period of discomfort and incoordination, the disputants begin to tell their stories of injustice in concert, spontaneously harmonizing the points on which there is little disagreement and resolving those parts of the tale where the greatest differences lie.
Those parts of the story that have grown wildly distorted in the absence of any corrective influence, are shrunk back to their appropriate size. Freed from the tyranny of their phantom "others," the parties begin to work collaboratively to solve the problem that they now understand is mutual.
Though this is surely metaphor, the process is not just theory. When parties consent to a joint session orchestrated by the mediator in collaboration with their attorneys, this type of reconciliation happens more often than not.
Don't, however, confuse this joint session with those in which attorneys give one another presentations proving their entitlement to victory as if there were a phantom "decider" -- a missing arbitrator or judge -- somewhere behind a curtain. These are the type of "joint sessions" that have given joint sessions a bad name because counsel well know their opponents' "positions"and the parties tend to become less rather than more amenable to settlement when their opponents' point of view is once again argued to them -- this time in quarters that are far too close for most lawyers, let alone their clients.
We'll keep exploring this issue. For now, more of the Gawande article below.
A new scientific understanding of perception has emerged in the past few decades, and it has overturned classical, centuries-long beliefs about how our brains work—though it has apparently not penetrated the medical world yet. The old understanding of perception is what neuroscientists call “the naïve view,” and it is the view that most people, in or out of medicine, still have. We’re inclined to think that people normally perceive things in the world directly. We believe that the hardness of a rock, the coldness of an ice cube, the itchiness of a sweater are picked up by our nerve endings, transmitted through the spinal cord like a message through a wire, and decoded by the brain. . . .
[There are] some serious flaws in the direct-perception theory—in the notion that when we see, hear, or feel we are just taking in the sights, sounds, and textures of the world. For one thing, it cannot explain how we experience things that seem physically real but aren’t: sensations of itching that arise from nothing more than itchy thoughts; dreams that can seem indistinguishable from reality; phantom sensations that amputees have in their missing limbs. And, the more we examine the actual nerve transmissions we receive from the world outside, the more inadequate they seem.
Our assumption had been that the sensory data we receive from our eyes, ears, nose, fingers, and so on contain all the information that we need for perception, and that perception must work something like a radio. It’s hard to conceive that a Boston Symphony Orchestra concert is in a radio wave. But it is. So you might think that it’s the same with the signals we receive—that if you hooked up someone’s nerves to a monitor you could watch what the person is experiencing as if it were a television show.
Yet, as scientists set about analyzing the signals, they found them to be radically impoverished . . .
Before you run over to Gini's site to read Lande's excellent post or his great article, I'd like to simply bullet-point some observations based upon my four-years of full-time mediation and arbitration practice.
when I co-arbitrate with some of the best commercial arbitrators in the business -- these are Ivy League lawyers with many decades of experience representing Fortune 50 Companies in AmLaw 100 Law Firms, the ultimate decision changes many times during the course of deliberations and almost always could go either way.
having spent a considerable time in the Los Angeles Complex Court as an experienced commercial litigator "externing" for credit to earn my LL.M in '06, I can tell you that the deliberations in chambers of these highly respected jurists is not much different that those in which I have engaged when sitting on an arbitration panel
The take away? No matter who is hearing your case, your chances of winning are 50-50. Flip a coin. Think this doesn't apply to you? I have arbitrated cases being handled by the top ten law firms in the country. I have seen those same type of firms litigate and try cases in the Complex Court. It's 50-50 friends.
Below -- observations on how you and your mediator can be "happy together." (And the Turtles from 1967 so that you can have a little musical accompaniment to this post)
Observations of End-Game Litigation from a Mediator's and Settlement Consultant's Perspective.
Despite years of inquiry and the review of millions of documents, sophisticated parties (Fortune 50) represented by dynamite law firms (AmLaw 50) haven't yet learned the most fundamental information about the following matters -- most of which are more important to the settlement of the case than the cost-detriment-benefit-position-driven-chance-of-victory settlement posture:
what are the hidden interests that your opponent must satisfy before accepting a settlement that is below the number he once told his client should never under any circumstances be accepted?
what are the hidden constraints upon your opponent's authority that must be removed before he can pay more money than he once told his client should never under any circumstances be paid?
why was this litigation initiated in the first instance?
who gave the litigation the "green light"?
what are the probable consequences to the continued financial security of the person who gave the litigation the "green light" in the first place or who has authorized the defense bills for the last 5, 10, or 15 years?
is the person who green-lighted the litigation in the first place still employed by your client?
what are the probable consequences to the financial well-being of the corporation who must pay more than it wishes to pay or accept less than it wishes to recover?
Who is the most frightened person in the room, i.e., whose hide might be sacrificed if the litigation settles for more/less than predicted, or, often worse, actually goes to trial.
There are so many of these settlement-driving and -inhibiting questions that only my own personal time contraints -- I must start my day's work -- make me stop listing them.
Let me conclude with this however. Never underestimate your client's reluctance to settle the case on terms that seem unjust to it. This is the most important function a mediator can play on the day of settlement -- explaining justice issues to the clients and helping the clients de-demonize their opponent -- which occurs most easily in JOINT SESSION yet which most litigators would rather have their teeth drilled than attend.
O.K. I can't conclude without saying this. If you have the courage to try a case, you possess the cajones to participate in at least one joint session to help the parties come to terms with the justice issues -- which are often driven by the conclusion, affirmed over and over again in the course of the litigation, that their opponent is an evil, mendacious, grasping, greedy, malicious, duplicious lying liar with his pants on fire.
This is almost never true. The parties on both sides almost always possess equal parts of good and bad, just like the rest of us.
Let your parties re-adjust their perception of "the enemy" in joint session. I can almost guarantee you that a conversation will ensue in which the parties spontaneously tell each other what interests they really need to satisfy to settle and what constraints they are really working under. And I don't guarantee a lot of things.
Why can't I do this for the parties?
Because often neither side will disclose these matters to me because they don't trust that I won't use that information to help settle the case and because the parties won't believe what I say about their opposition in the first place (obviously, they've pulled the wool over my eyes).
"How do you know he's not lying?" is a question mediators are asked on a regular basis. My answer is "I have no idea." But if you let your client talk to the opposition -- with any constraints, restrictions and control you wish to retain -- which I can orchestrate for you -- your client will be able to elicit the details that give any story a ring of truth (or falsity) while at the same time watching the body language that constitutes between 60 and 80% of all communication.
Would you try a case without 80% of the information you need? Of course not! And yet you're content to avoid a joint session when that session could provide you with between 60 and 80% more information than you had when you arrived on the morning of the mediation or settlement conference?
Suspend your disbelief in the mediator ("who-will-do-anything-to-settle-the-case") for just a couple of minutes. Remember that we're in possession of confidential information we cannot divulge to you.
Take our lead. And if you don't trust us to do so, for heaven's sake find a mediator you can trust!
Collaboration may be most amenable in areas where there is a need for ongoing relationships, like dissolving marriages that produced children, said Pauline Noe of Cambridge, a past president of the Massachusetts Collaborative Law Council. Noe suggested that discovery is often more fruitful in collaborations than in litigation, since collaboration requires full, prompt, honest and open disclosure of all relevant information, and vigorous good faith negotiation with full participation of all parties in an open forum.
Taking the long view as I'm now prone to do (by virtue of age and the fact that I generally only see litigation's end game) I continue to say that we're all involved in on-going relationships -- not just those people whose disputes are more personal than commercial.
Schopenhauer, in his splendid essay called "On an Apparent Intention in the Fate of the Individual," points out that when you reach an advanced age and look back over your lifetime, it can seem to have had a consistent order and plan, as though composed by some novelist. Events that when they occurred had seemed accidental and of little moment turn out to have been indispensable factors in the composition of a consistent plot. So who composed that plot? Schopenhauer suggests that just as your dreams are composed by an aspect of yourself of which your consciousness is unaware, so, too, your whole life is composed by the will within you. And just as people whom you will have met apparently by mere chance became leading agents in the structuring of your life, so, too, will you have served unknowingly as an agent, giving meaning to the lives of others, The whole thing gears together like one big symphony, with everything unconsciously structuring everything else. And Schopenhauer concludes that it is as though our lives were the features of the one great dream of a single dreamer in which all the dream characters dream, too; so that everything links to everything else, moved by the one will to life which is the universal will in nature.
It’s a magnificent idea – an idea that appears in India in the mythic image of the Net of Indra, which is a net of gems, where at every crossing of one thread over another there is a gem reflecting all the other reflective gems. Everything arises in mutual relation to everything else, so you can’t blame anybody for anything. It is even as though there were a single intention behind it all, which always makes some kind of sense, though none of us knows what the sense might be, or has lived the life that he quite intended.
A classic example of combative litigation -- YOU ARE NOT THE BOSS OF ME!
I take these criticisms very very seriously, repeating throughout any mediation session my opening assertion that my role is to present the parties with choices and to faciliate a settlement if they believe it may be better alternative to continued litigation, not to hustle them away from their right to a jury trial.
I would be far more successful in being "neutral" about proceeding to a jury trial if there were an easier, less costly, and speedier way to bring a dispute before a jury. We have, lamentably, permitted our cherished rule of law to become so procedurally encrusted that it sometimes seems like no option at all -- at least not an option available to all but the wealthy or those represented by lawyers willing to accept a contingent fee.
All of this troubles me. I invite comment at the same time that I provide the thoughts of some of our greatest statesmen and jurists about the right to trial by jury.
"There was not a member of the Constitutional Convention who had the least objection to what is contended for by the advocates for a Bill of Rights and trial by jury." (1788)
"Representative government and trial by jury are the heart and lungs of liberty. Without them we have no other fortification against being ridden like horses, fleeced like sheep, worked like cattle and fed and clothed like swine and hounds." (1774)
"I consider trial by jury as the only anchor ever yet imagined by man, by which a government can be held to the principles of its constitution." (1788)
"Trial by jury is part of that bright constellation which has gone before us and guided our steps through an age of revolution and reformation." (1801)
"The wisdom of our sages and the blood of our heroes has been devoted to the attainment of trial by jury. It should be the creed of our political faith." (1801)
"Trial by jury in civil cases is as essential to secure the liberty of the people as any one of the pre-existent rights of nature." (1789)
John Quincy Adams
"The struggle for American independence was for chartered rights, for English liberties, for trial by jury, habeas corpus and Magna Carta." (1839)
Patrick Henry of Virginia [Patriot who said "Give me liberty or give me death!"]
"Trial by jury is the best appendage of freedom by which our ancestors have secured their lives and property. I hope we shall never be induced to part with that excellent mode of trial." (1788)
"The friends and adversaries of the plan of the convention, if they agree in nothing else, concur at least in the value they set upon the trial by jury; the former regard it as a valuable safeguard to liberty; the latter represent it as the very palladium of free government." (1788)
"The protection of life and property, habeas corpus, trial by jury, the right of an open trial, these are principles of public liberty existing in the best form in the republican institutions of this country." (1848)
Judge Stephen Reinhardt
"Our constitutional right to trial by jury does not turn on the political mood of the moment, the outcome of cost/benefit analyses or the results of economic or fiscal calculations. There is no price tag on the continued existence of the civil jury system, or any other constitutionally-provided right." (1986)
"Trial by jury is the best institution calculated for the preservation of liberty and the administration of justice that was ever devised by the wit of man." (1762)
Judge William Bryant [First African-American federal district court judge in D.C]
"If it weren't for lawyers, I'd still be three-fifths of a man." (2004)
Justice William O. Douglas
"The Massachusetts Body of Liberties was a new Magna Carta. It contained many of the seeds of the civil liberties which today distinguish us from the totalitarian systems, including the right to trial by jury." (1954)
Justice Hugo Black
"Our duty to preserve the Seventh Amendment is a matter of high Constitutional importance. The founders of our country thought that trial by civil jury was an essential bulwark of civil liberty and it must be scrupulously safeguarded." (1939, 1943)
Justice Ward Hunt
"Twelve jurors know more of the common affairs of life than does one man, and they can draw wiser and safer conclusions than a single judge." (1873)
The cost of a thing is the amount of life that you must exchange for it -- now or in the long run (Thoreau)
if you have an on-going relationship -- even as limited as a note payable -- squeezing the last nickel out of the deal may impair your bargaining partner's ability to perform
what goes up, must come down, i.e., squeezing out the last nickel creates enemies who none of us can afford when times are good, let alone when times are bad
taking advantage of another's weaknesses tears at the social fabric
it makes us all more watchful and less productive
it doesn't actually feel good to line your pockets with the misery of others
sometimes the downtrodden rise up -- every couple of centuries or so, creating an entirely new order -- the generous man and woman will not be on the wrong side of that revolution
global warming -- think about it -- the order will change as will the countries who will be asking for favors
you reap what you sow (I'm pretty sure I learned this in Sunday School)
social relations do not exist "out there" -- they are co-created by one person's relationship with every other person -- the society you inhabit is the one you create -- if you don't want your neighbor taking your last dime, don't take his
collaborative effort results in greater progress than individual activity -- if you decrease trust, you impede advancement in business, the arts and science
Readers! Can I count on you to give us all more reasons?
I'm tempted to just import Geoff Sharp's entire post on joint session vs. separate caucus mediation or, as Joe McMahon positions the split in current mediation practice in Moving Mediation Back to Its Historic Roots, "dialogue-based" v. "separation-based" practice.
I will give you a few excerpts, though, both Geoff's own thoughts and those of McMahon quoted by him (thanks to our mutual friend Stephanie West Allen at Idealawg).
If denial and avoidance are thought to be the most universal responses to conflict, it is important to consider whether separation-based mediation merely plays into and enables such a response to conflict. If so, it is time to evaluate whether mediation and facilitation were really intended to provide support for such denial...
Support for the market model of mediation ("the market knows what it needs and what it needs is the settlement conference") is claimed in the high settlement rates in commercial settlement conferences. However, a high percentage of civil cases always have settled, even long before mediation was in vogue...
McMahon asks of mediators; 'are you fully satisfied with the quality of dialogue among conflicting parties in the mediations in which you participate?'
What a wonderful question! In my case however, only occasionally.
As McMahon says, 'By broadly considering conflict and mediation, it may be possible... to move these processes back toward their historic roots—that being processes based on parties telling their stories in face-to-face dialogue aided by a mediator who can guide them to more effective communications.'
And though it is, as Geoff says, about the "timbre and tone of resolution," it is also about obtaining more satisfactory resolutions -- resolutions that not only satisfy more party needs, interests and desires but which invariably leave less value lying unused on the table when all parties leave the room.
I'll grill Geoff about this over dinner tomorrow night and get back to you on all of this.
Here, then, is the weakness of shuttle negotiation. The parties' attention is fixated on money. A fixation that neuroscientists tell us makes us ungenerous and anti-social -- the worst possible context for a successful settlement.
The next time you're facing a difficult negotiation or mediation, remember the salutary effect of small talk in helping yourself and your opponent focus on the commercial and human situation that has brought you to the table so that you can more easily resolve the business and the people problem at the heart of the litigation.
Whether justice and fairness are, at some level, hard-wired into us (see Brain reacts to fairness as it does to money and chocolate) or culturally controlled, it seems that Rawls' conception of "justice and fairness" based upon reasonableness and enlightened self-interest might flow more or less naturally from a mediated dispute resolution forum where the parties, rather than the mediator, are in control.
Emotions in litigation -- and at the negotiation table -- often run extremely high. It is for this reason that so many lawyers want to avoid joint sessions altogether and conduct their entire bargaining session in separate caucus with a "shuttle" mediator.
What I can tell you from three years of full-time mediation practice, however, is this -- when business people -- properly coached -- are finally willing to sit down and speak to one another, to explain their circumstances rather than their legal and factual position -- cases get settled rather quickly. (See Geoff Sharp's In Praise of Joint Sessions here)
Because they have more in common with one another -- including most particularly the dispute -- than with anyone else.
If you serve a 998 offer on the Plaintiff, say $5,000, and Plaintiff's judgment is reduced to zero after set-off for settlements, is the Defendant entitled to recover the costs permitted by 998 if the judgment against it is reduced to zero after the court deducts from the jury verdict the amount of pre-trial settlements paid by others?
Well, yes and no.
If the Plaintiff's recovery at trial would have netted it more at the time of the 998 offer than the 998 offer itself, 998 does not shift post-998 fees to the Plaintiff. If the 998 offer was $5,000, the jury verdict is $10,000, and no settlements had been paid to Plaintiff at the time the 998 was served, Plaintiff's failure to accept the 998 does not shift post-998 costs to it. If, however, the Plaintiff had already received $10,000 in settlement at the time the $5,000 998 was made and the jury renders a $10,000 verdict that is reduced to zero, 998 will shift the post-998 costs to the Plaintiff.
I get stuck in position-based negotiations as well. It remains a challenge for me, after 25 years of litigation practice, not to be sucked into the attorneys' arguments about why they are right. To help all of us in the mediation room . . .
[h]ere is a list of 8 questions you can ask yourself when you suddenly realize that you have to prepare for a negotiation. Use these to generate quick preparation for any negotiation.
1. What are my intended outcomes and interests?
This is about having your goal in mind but also about thinking about the bigger picture at the same time - if you're goal is to get to work on time, speeding to get there might seem like the right choice until the cop pulls you over.
2. What are their possible interests and outcomes?
Look at the negotiaion from their point of view. What do they really want from this?
3. What are some of the options of agreement?
Where are the points of agreement? Focusing on this beforehand will set a tone of reaching agreement rather than a tone of conflict.
4. What is my Plan B?
Once you've thought through the first three questions, what's your fall back position? Having your Plan B in mind gives you a feeling of options so if the deal goes to far against you, you are comfortable with your option B.
5. What is my worst case scenario?
Answering this question sets your "don't cross" line. You've predetermined what you're willing to give up and more than that is a deal breaker… that means you can negotiate confidently, since you know your direction.
6. What are some possible external standards?
External standard are outside measures that can move the negotiation away from personal stakes to measures from an outside authority. Examples might be interest rates, rate of exchange or time frame.
7. What is or are my reserve price / terms / limits?
Knowing what your limits are and then not not going past them results in more useful and enjoyable negotiation.
8. What is my game plan?
Map it out. What do you want and how are you going to get there?
It happened at a settlement conference again just last week. Defense counsel said there was "no insurance" for the defense orindemnity of a professional malpractice claim.
This naturally surprises me. Some professionals are required to have coverage or disclose its non-existence to their clients. No such disclosure had been made in this case.
"No insurance policy?"
"She has an insurance policy; there's just no coverage."
"Why did the carrier deny coverage?"
"The carrier said there was no coverage."
"I don't know. I'm not coverage counsel."
"Is there coverage counsel?"
"No. I told you there's no coverage. Let's get back to negotiating the settlement."
After obtaining (via fax) the policy, the demand and the denial, it turned out that there was a good reason for the carrier to deny coverage for the plaintiff's claim. But the denial letter expressly withheld comment on the existence of coverage for the defendant's principal, who had not failed to make a timely claim for coverage, and who had not yet been sued.
Call me an activist or a "fund raising" mediator if you will, but when there's not enough money to settle a case and the parties continue to wish it could be settled, I start asking questions about sources of available funds.
And, listen. Every litigator must be enough of a "coverage lawyer" to evaluate the likelihood that any existing insurance policy might provide defense or indemnity for the law suit you are defending.
So, if you are a commercial litigator -- or any type of litigator who defends your clients against claims -- you must
ask your clients for all of their insurance policies, even those that seem unlikely to provide coverage;
carefully review the precise wording of the policy's insuring agreements, paying particular attention to the language concerning the defense of claims and the deadlines for submitting those claims to the carrier;
research the case law in the relevant jurisdiction(s) to determine how the courts have interpreted the insuring agreements and other pertinent policy provisions contained in your clients' policies under facts similar to those alleged in the lawsuit you've been asked to defend;
except for some narrow additional protections provided to insureds, be aware that there is no such thing as "the law" of coverage under any particular type of policy -- all coverage flows directly from the precise language of the insuring agreement;
remember that in most jurisdictions, that language -- if ambiguous -- will be interpreted in favor of the insured's objectively reasonable expectations -- that means the law of coverage always favors your client's claim for coverage;
understand that in most jurisdictions the rule of contra proferendum will require a court to construe any ambiguity in an insurance policy against the insurance carrier, once again meaning that the law of coverage will favor your client's claim for coverage;
never accept the carrier's refusal to provide a defense without asking yourself -- or a coverage specialist -- why in the heck you should accept the carrier's word for it when you were born to contradict everything from "good morning" to "let's have lunch";
never conclude your client doesn't have coverage before tendering the claim; the response to the tender will outline the pertinent policy provisions in stark enough detail -- not to mention 12-point type -- and the denial in sufficiently weasley words to activate your B.S. meter;
if you finally accept the fact that your client's policy won't cover the defense of the litigation or indemnify your client in the event of a judgment, continue to keep the carrier informed of the litigation's progress in any event, inviting the carrier to attend all mediations and settlement conferences and to respond to all settlement demands;
remember that the law of coverage changes on a daily basis; read those coverage decisions sent down by your local appellate courts and subscribe to Mealey's on coverage remembering that a really good reason for a client to sue a lawyer for malpractice is your failure to give it reasonably informed legal advice about the availability of insurance coverage; and,
retain coverage counsel If the cost of the lawsuit is beyond your client's means or will deprive it of capital necessary to meet its business goals for the next few years.
The Defendants filed a motion to enforce the mediated settlement agreement [Guess why! Good guess!]. The Plaintiff argued that a “mutual mistake” allowed him to avoid the parties’ mediated settlement agreement.
Not so fast . . . .
Continue reading here. There are two solutions to this problem in any jurisdiction: (1) know your policy limits; or, (2) make your agreement to settle contingent on verifying them.
"Inordinancy" is not, I think, a matter of time but of focus. One's sexual interests might be classfied as prurient if they are stirred by a single act, item or physical characteristic and disregard the humanity of the object of one's desire. In feminist terms, pornography objectifies people, elevating their parts above the sum of their parts and using them to satisfy our own -- but not their -- desires.
And how is pornography like litigation, Ms. Pynchon?
After more than 10 years as a judge of this [Ninth Circuit Court of Appeal] I find that the flow of cases begins to resemble a moving train, with each window revealing a still life of an individual human drama. The sheer volume of cases, and the fact that we rarely see the faces of the participants--just written words on paper and, sometimes, the arguments of lawyers--makes it difficult to remember that there are human beings somewhere looking to us with hope and yearning for a decision in their favor. The law, too, is quite complex. Cases often turn on legal technicalities that bear only a tangential relationship to concepts such as fairness and equity. Justice, we tell ourselves--and I do believe this--is done if the law is applied without regard to the outcome in a particular case.
The artifacts of litigation -- usually called "briefs" and sometimes sprung into life as depositions or trial testimony -- make a fetish of one or more aspects of a complex human drama. Litigation sucks the people out of the play, requiring both litigants and attorneys to objectify and demonize one another. By the time the "case" is ready to be "mediated" or "settled," the people with the problem often feel as if they long ago watched the litigation train leave with someone else's story in it -- that the "still-life" Kozinski observes at a glance through the moving window has little to do with the people and a lot to do with process.
Are we interested in knowing one another? Would a genuine interest in the man Kozinski be more satisfying, finally, than the briefly titillating party joke we might wish to make of him? Do we privilege the prurient or the personal?
If you do this, you will no longer be capable of reducing Kozinski to a ribald joke or reveling in his public embarassment. You will recognize the humanity in him, which is the necessary pre-requisite to recognizing and forgiving the fallible humanity in all of us.
And litigation? Here's my unsolicited advice: Let your clients tell their stories to one another in a joint mediation session. Neither you nor they will thereafter be capable of reducing the "opposition" to a single demonic character trait.
I will say it again. Litigation is not about money. It is about justice.
The defense balks at paying Plaintiff at the point of a gun. The Plaintiff resists releasing the defendant from liability until satisfied that a wrong has been righted or never really existed in the first place.
You can accomplish justice with money. But you can accomplish it far more easily, and with far greater satisfaction for your clients, if you allow them to once again share the depth and dimensionality of their dispute with one another; harmonizing their mutual stories of injustice and betrayal.
In the meantime, I suggest we let Kozinski -- and ourselves -- off the hook by recognizing that the sum of the parts is greater -- and in the end far more interesting -- than the temporary public revelation of the smallest part of any man.
Cyberspace is weird and obscure to many people. So let's translate all this a bit: Imagine the Kozinski's have a den in their house. In the den is a bunch of stuff deposited by anyone in the family -- pictures, books, videos, whatever. And imagine the den has a window, with a lock. But imagine finally the lock is badly installed, so anyone with 30 seconds of jiggling could open the window, climb into the den, and see what the judge keeps in his house. Now imagine finally some disgruntled litigant jiggers the lock, climbs into the window, and starts going through the family's stuff. He finds some stuff that he knows the local puritans won't like. He takes it, and then starts shopping it around to newspapers and the like: "Hey look," he says, "look at the sort of stuff the judge keeps in his house."
Susan Estrich's 'take" in her post Good Humor, excerpt below:
If everyone who ever viewed or shared pornography were disqualified from judging the line between protected speech and criminal obscenity, we all would be in trouble. The problem facing Judge Kozinski illustrates what's wrong with the prosecution, not with the judge.
Which brings us to the broader point. Judge Kozinski's actions affect the reputation of the judiciary, on which rest foundations of the state, like public respect for the rule of law. To the extent that this public disclosure undermines public confidence in the judiciary or the rule of law, it's a very bad thing. There's a reason for the outrage that's expressed when the public hears about judges' bad behavior. As Stephen Gillers told the LAT, "The phrase 'sober as a judge' resonates with the American public."
The National Law Journal's compilation of Expert Opinionon the matter including legal ethics professor Ronald Rotunda's opinion that the material on Kosinzki's site was "demeaning, infantile, pornographic, [and] offensive," which just makes me want to see what type of internet porn the good Professor prefers.
Take a page from theBarbie- Bratz litigation which the AmLaw Daily reports was partially settled with the assistance of Pierre-Richard Prosper, a former ambassador-at-large for war crimes issues in the Bush administration.
The AmLaw Daily reports that Prosper was "brought into the case by federal district court Judge Stephen Larson to oversee settlement negotiations among all three parties because (according to Prosper) the "judge and the parties thought [his] international experience mediating and negotiating armed conflicts would translate here." See Barbie and Bratz Head to Trial here (emphasis mine).
That "sometimes there is good reason to fear to negotiate."
Agreed. But only if we add the word "badly."
The Op-Ed piece itself describes JFK's ill-fated negotiations as follows:
Although Kennedy was keenly aware of some of the risks of . . . . meetings [with one's adversaries] . . . he embarked on a summit meeting with Khrushchev in Vienna in June 1961, a move that would be recorded as one of the more self-destructive American actions of the cold war, and one that contributed to the most dangerous crisis of the nuclear age.
Senior American statesmen like George Kennan advised Kennedy not to rush into a high-level meeting, arguing that Khrushchev had engaged in anti-American propaganda and that the issues at hand could as well be addressed by lower-level diplomats. Kennedy’s own secretary of state, Dean Rusk, had argued much the same in a Foreign Affairs article the previous year: “Is it wise to gamble so heavily? Are not these two men who should be kept apart until others have found a sure meeting ground of accommodation between them?”
But Kennedy went ahead, and for two days he was pummeled by the Soviet leader. Despite his eloquence, Kennedy was no match as a sparring partner, and offered only token resistance as Khrushchev lectured him on the hypocrisy of American foreign policy . . . Khrushchev used the opportunity of a face-to-face meeting to warn Kennedy that his country could not be intimidated and that it was “very unwise” for the United States to surround the Soviet Union with military bases.
. . . American diplomats in attendance, including the ambassador to the Soviet Union, later said they were shocked that Kennedy had taken so much abuse. Paul Nitze, the assistant secretary of defense, said the meeting was “just a disaster.” Khrushchev’s aide, after the first day, said the American president seemed “very inexperienced, even immature.” Khrushchev agreed, noting that the youthful Kennedy was “too intelligent and too weak.” The Soviet leader left Vienna elated — and with a very low opinion of the leader of the free world.
Kennedy’s assessment of his own performance was no less severe. Only a few minutes after parting with Khrushchev, Kennedy, a World War II veteran, told James Reston of The New York Times that the summit meeting had been the “roughest thing in my life.” Kennedy went on: “He just beat the hell out of me. I’ve got a terrible problem if he thinks I’m inexperienced and have no guts. Until we remove those ideas we won’t get anywhere with him.”
Flawed Setups Make Negotiation Tactics at the Table Irrelevant or Dangerous
As the Times article states, at least one seasoned diplomat expressly opined that the issues Khrushchev was raising at the time of Kennedy's first diplomatic mission could as well (or better) be addressed by lower-level diplomats as by the President. Kennedy's own Secretary of State suggested that ground work needed to be laid before the leaders of the "free" and the Communist worlds met for the first time. Kennedy ignored this sage advice and learned one of the most important lessons of his presidency -- to seem weak was as bad as being weak.
means acting to ensure that the right parties have been involved, in the right sequence to deal with the right issues that engage the right set of interests at the right table or tables at the right time under the right expectations and facing the right consequences of walking away if there is no deal. Before worrying too much about tactics, the 3-D setup architect works hard to optimize these elements -- the scope, sequence, and choices about the process itself -- in which interpersonal dealing will play out.
If the setup at the table isn't promising, the 3-D negotiator doesn't merely resort to bullying . . . or turning up the empathy and personal charm . . . Instead, he or she takes action away from the table to reset the table more favorably. The 3-D Negotiator understands that a bad setup makes tactics at the table more or less irrelevant -- and that a great setup, conversely, makes good tactics all the more effective. In fact, it can help the tactician achieve otherwise impossible results.
This is the sentiment -- from JFK's inaugural address -- that Thrall and Wilkins suggest we question in light of Kennedy's ill-fated initial encounter with the far more experienced and cannier Nikita Khrushchev. This caution, however, would unnecessarily throw out diplomacy's baby with negotiation's bath water. If these wise words need any amending whatsoever, let them be: Let us never negotiate out of fear. But let us fear to negotiate badly.
announced Monday a bipartisan agreement on the broad elements of a plan to avoid foreclosures and speed the refinancing of mortgages for roughly 500,000 troubled homeowners without taxpayers footing the bill.
Political deal making showcases high-level bargaining skills at the intersection of interest- value- and rights-based negotiation paradigms. No one files lawsuits against their Senators (well, no sane person). But in the midst of an economic crisis, political representatives might just as well be defendants. As Reynolds explains, the forclosure legislation "deal" reached in the U.S. Senate reflects the election-year pressure that lawmakers feel to find common ground on one of the most pressing issues facing the country.
Some theorists define conflict as a "crisis in human interaction" which the parties need help to overcome for the purpose of restoring constructive interaction.
A stakeholder in a conflict is anyone who might be positively or negatively impacted by the crisis and its potential resolution. In this case, the L.A. Times identifies the entire economy as a "stakeholder." As Ms. Reynolds explains, the "housing collapse"
has inflicted pain on thousands of families, dealt the economy a major blow and ignited a fierce controversy over what -- if anything -- the government should do about it.
The stakeholders to whom elected representatives must answer are, of course, those who elect them -- voters and taxpayers -- as well as those corporate and individual contributors who fill their election coffers. When selling a public good, however, it is best to acknowledge your allegiance to "the people." As one Senator explained:
My primary consideration during negotiations on this package has been to protect the American taxpayer, and I believe we've made significant progress toward that goal.
National Resolution to Public Problems Must Reflect the Voters' Interests and Values
Unlike a lawsuit, where the parties are fighting over existing (or hoped for) rights and obligations, in economic, social or political crises the "fight" is not about "rights" but interests and values. The right to declare bankruptcy aside, no one has a legal right to be "bailed out" of a financial crisis. Nevertheless, a bail out may be necessary if elected officials are to serve the "interests" of their constituents according to those voters' "values."
As Reynolds explains, the lead Republican on the Senate Banking Committee, Sen. Richard C. Shelby, suggested that consensus among law makers could not be achieved if the proposed solution to the foreclosure crisis were seen as a "bail out" of "speculators" or of "borrowers and lenders who made bad decisions out of carelessness or greed." These are the "value" concerns that are part and parcel of any potential resolution of a community-wide conflict.
Because we perceive money to be a scarce resource, we presume that its delivery to Interest Group A will deprive Interest Group B of funds necessary to serve Group B's needs or desires. This is a "zero sum" view of economics. For individuals and many businesses, however, this is often not only perceived reality, but the actual fact of the matter.
If mom and dad bail Billy out of jail for drunk driving, they may not have sufficient resources to pay his brother's room and board at Ivy League U. Not wishing to "reward" bad behavior (a "value" metric) may be only part of the calculus, however. If the family is capable of satisfying both brothers' interests, they may or may not decide to be guided by their "values." They could act out of helpless parental love or simply compassion. If the parents do not have sufficient resources to satisfy both brothers' needs at the same time, their decision about who to benefit will almost always reflect family values (little "F" little "V").
How national problems should be solved within federal budgetary constraints is not so different from the family drama hypothesized above.
The foreclosure crisis is not only about American values such as independence, thriftiness, caution, and hard work. It is also about stakeholder interests. As Reynolds reports:
Some Republicans have supported other versions of the legislation, citing the severity of the housing crisis and the escalating number of foreclosures in some regions of the country, including parts of California. They argued that the foreclosure crisis would damage entire communities and pull the economy toward recession.
If larger societal interests -- like the economy itself /** -- are at risk, a "bail out" plan that "rewards" even the careless and greedy may be palatable to voters, particularly when, as Reynolds reports, "at the luxury end, home prices are falling." In other words -- if this crisis is not addressed by our elected representatives (who are also stakeholders in this crisis) not only voters, but contributors to political campaigns might retaliate against them.
In acknowledging the need for action, Senator Shelby positively "frames" the crisis as one affecting "struggling homeowners" who "should" be assisted so long as "American tax payers" don't have to foot the bill. Others appeal to market and voter fears that the foreclosure crisis might "pull the economy toward recession" (if it has not already arrived there). In all events, a majority of stakeholders in any democracy must feel satisfied that legislation addresses both their needs and their fears.
The Proposed "Deal"
The proposed Senate "deal" to aid borrowers, lenders, and "the economy" is described by the Times as follows:
The Senate plan announced by Shelby and Banking Committee Chairman Sen. Christopher J. Dodd (D-Conn.) is similar to the House-passed bill in that the centerpiece of each is an expansion of government mortgage insurance. Under both proposals, a borrower facing foreclosure could refinance into a government-guaranteed mortgage under certain conditions, including that the home is the owner's primary residence and that the holder of the existing mortgage accepts 85% of the home's current appraised value as payment in full.
The House bill calls for using about $1.7 billion from the federal budget to set up the program, which would be administered by the Federal Housing Administration.
Under the Senate deal, the start-up funds would come instead from an affordable-housing fund capitalized by mortgage giants Fannie Mae and Freddie Mac, which were created by the government but are owned by public stockholders.
This plan satisfies American "self-help" values by requiring borrowers to refinance. It attempts to exclude "speculators" from the benefit created by requiring recipients of the government-guaranteed mortgages to affirm that the home is their primary residence. And it "punishes" imprudent lenders by requiring them to accept 85% of the home's current appraised value as payment in full. Finally, whereas the House would spend $1.7 billion in federal funds, the Senate hopes to tap the resources of Fannie Mae and Freddie-Mac, government created but privately owned lenders.
Selling the Deal
Whatever deal is crafted to address a national financial crisis or to settle a piece of commercial litigation, it must be sold to all stakeholders. Here's a classic "win-win" pitch based on interests and values.
"This legislation is good news for both the markets and homeowners," [Senator] Dodd said. "The bill addresses the root of our current economic problems -- the foreclosure crisis -- by creating a voluntary initiative at no estimated cost to taxpayers, which will help Americans keep their homes." Dodd told reporters the measure would speed the correction of housing prices to return stability to the market as soon as possible and prevent further damage to the broader economy. "Obviously, we want to keep as many people as possible in their homes. But the second goal, as important as the first, is to get to the floor" of the housing correction, Dodd said in a conference call. "Until we get to the floor, none of this is going to get better." "We have a lot of confidence that this is what the market is waiting for," Dodd said.
Deconstructing consensus-building in the political arena should help anyone who is making an effort to settle commercial litigation -- or simply a family dispute over the deployment of family resources.
We thank Times staff writer Maura Reynolds for the depth and breadth of her reporting on this issue.
Nearly every condominium complex harbors an outlaw -- the man, woman, couple or family who refuse to follow the rules. The young couple who blasts the woofers off their stereo system at 3 a.m. The elderly woman who doesn't clean up after her dog. The raucous family that plays "Marco Polo" in the community pool after midnight.
Offended and outraged, other homeowners make demands on their volunteer board who contact the (often unresponsive) management company. The HOA board does its best. It issues warnings to procure compliance. To no avail. Eventually, someone reads the CC&R's. They learn that the Board has enforceable legal duties and the homeoweners actionable legal rights.
Welcome to community mediation -- the non-zero sum, value-based, rights-seeking, joint session transformative dispute resolution process. We're well trained and we're free.
But can we deliver justice?
Attorneys, the Law, Mediation and Justice
Maybe it was just my G-g-g-generation, but I went to law school primarily because I was interested in the delivery of justice. Although my primary involvement in the 20th Century 's civil rights movements was as a Vista volunteer at an activist women's center in San Diego in the early 1970's, I wasn't simply pursuing my own narrow self-interests when I applied to law school.
As early as I can recall -- long before I'd conclude that 1950's and '60s women were oppressed -- I'd already developed a deep longing for the reconstruction of adult relationships along the lines of fairness. This must be atypical childhood longing premised upon our predicament of being physically small and powerless. An "unjust" world that rewards only power would not ensure our survival while a world in which everyone is valued and treated fairly would.
Couple a child's sense of justice with televised images of "the law" aiming fire-hoses at peacefully demonstrating "Negroes" and you get a life-long commitment not simply to the "rule of law" but to the necessity for that "rule" to be premised upon justice.
Are Negotiated and Mediated Resolutions Trumping Justice?
These are just a few of the reasons it troubles me so when scholars suggest that mediated and negotiated resolutions to litigated disputes are unjust. Seeyesterday's post here and the article that prompted it, Justice Trumps Peace (etc.) here. If mediation is truly what its critics contend it to be -- a full-frontal assault upon the rights gained by marginalized citizens during the Civil Rights era -- I'm in serious moral trouble here.
Consider this contention in Justice Trumps Peace:
“ADR rhetoric” reinforce[s] a conservative challenge to “the law and reform discourse of the 1960s, a discourse concerned with justice and root causes, and with debates over right and wrong.” “The rights theme, consistent throughout earlier debates over legal resources,” was conspicuous by its absence in “the policy discussion on alternative dispute resolution.” . . . .
Laura Nader . . . not[ed] that ADR’s “process of communication” ethos took necessary rough, ideological edges off claims, and fostered what she called “coercive harmony.” Nader argued that ADR was permeated with “conformist ideology,” which was employed to “suppress the realities of class, gender, and racial antagonism” endemic to American society, and as such, it comprised an “unreal law movement.” Nader contended that ADR’s emphasis on conciliation meant that critical considerations of “blame or rights” were “avoided and replaced by the rhetoric of compromise and relationship.” She concluded that “cultural notions of justice are factored out.”
This tendency to screen-out unpleasant, divisive, but nonetheless vital social concerns supports Fiss’s characterization of ADR as a “sociologically impoverished universe,” in which critical issues of class, race and gender are subsumed to construct “a world composed exclusively of individuals.”
Rawls asked us to think of justice as a matter of agreement. He suggested that we think of the principles guiding a just society as the ones that individuals would agree to -- with the crucial proviso that they do not know where they themselves would end up in society, on the top or the bottom. They would thus act from behind a "veil of ignorance . . . Given this constraint, no individual could tailor the principles of justice to his or her special talents or circumstances, which is why Rawls called this approach "justice as fairness." Rawls suggested that the principles that would be agreed to would be ones that were deeply committed ot basic human rights and had a strong presumption in favor of economic equality. Inequalities would only be tolerated if they most greatly benefited the least well off.
According to Ryan, Rawls concluded in his later writings that the reciprocity inherent in bargained-for resolutions and negotiation's search for mutual advantage were insufficient to ensure justice. Rawls therefore shifted the basis of his theory from the search for rational resolutions to the implementation of reasonable ones. "The question to ask of principles of justice," posited Rawls, was,
what were the most reasonable ones for people to agree to given the nature of our society and the nature of who we are? Justice, thus reconceived, lost the harsh individualism that Rawls' earlier theory seemed to possess. The stress on reasonableness meant that people taking others into account was an essential part of what justice was all about. His theory also moved away from his earlier hyper-abstraction, insofar as we talk of what is "reasonable" invariably refers not to some hypotheitcal persons with hypotheical aims but to real people -- in this case, us, here and now.
John Jones had practically memorized the CC&R's governing the Board's duties and the homeowner's rights. His wife repeatedly broke into tears as she described sleepless nights spent on the living room couch where the upstairs neighbor's early morning antics were the least disturbing. The volunteer Board member was sympathetic but at a loss for solutions. She'd contacted "management" and sent warnings to the miscreants, all to no avail.
Only punitive measures would do at this point, said Jones. The CC&R's called for sanctions to be imposed on rule-breakers but lacked a means of implementation and enforcement. The HOA representative indicated that she not only had the Board's authority to settle the matter, but to impose any necessary and reasonable rules to flesh out the CC&R's inadequate policies.
"We want monetary sanctions imposed," Jones was saying, "sanctions that can be made liens against the property just as HOA dues can be."
"What about notice?" I asked. "And a hearing? There's nothing in the rules about the procedure for imposing sanctions."
"24 hours!" shouted John. "If they don't comply, a $500 sanction to be made a lien against their property. And another $500 for every day they continue to violate the noise restrictions contained in the CCR's."
Not knowing about Rawls' veil-of-ignorance-just-rule-making principle, I nevertheless wondered aloud whether Mr. and Mrs. Jones understood that the bylaws they were suggesting could be used by their scofflaw neighbors as easily as they could be pursued by the Jones.
"What set of rules do you think would be fair?" I asked.
Two hours later, we had achieved what my Con Law professor would have called "procedural due process" -- a set of rules that would likely pass Constitutional muster that camefrom the parties -- not from the mediator.
Whether justice and fairness are, at some level, hard-wired into us (see Brain reacts to fairness as it does to money and chocolate) or culturally controlled, it seems that Rawls' conception of "justice and fairness" based upon reasonableness and enlightened self-interest might flow more or less naturally from a mediated dispute resolution forum where the parties, rather than the mediator, are in control.
Agree with Fiss, Ellinghausen, Laura Nader and Carrie Menkel-Meadow or not, there shouldn't be a mediator practicing who is unaware of these serious criticisms of the mediation process. If we're not aware of them, we can't avoid the potential for "muscle" mediation to prevent even the aspirational goal of delivering justice without regard to gender, color, power, social status, wealth and all the rest of the social markers the law has been so careful to avoid paying obeisance to.
My readers will recognize many of the tips included in this article published last week in the Los Angeles Daily Journal -- Bullying, Rigidity Are Surefire Negotiation Deal Breakers. Read it by clicking on the link above or below -- to enlarge page on the document embedded below, click on right-hand arrow and scroll down to
Malhotra and colleagues suggest that an adrenaline-fueled emotional state [which they] call competitive arousal, often leads to bad decisions.
Negotiating litigators may want to note that all of the conditions giving rise to "competitive arousal" are the day-to-day conditions in which litigation is conducted, i.e., intense rivalry, especially in the form of one-on-one competitions; time pressure . . . ; and being in the spotlight—that is, working in the presence of an audience.
Sound familiar? Take a look at the consequences and the potential solutions below.
Individually, these factors can seriously impair managerial decision making; together, their consequences can be dire, as evidenced by many high-profile business disasters. It's not possible to avoid destructive competitions and bidding wars completely.
But managers can help prevent competitive arousal by anticipating potentially harmful competitive dynamics and then restructuring the deal-making process. They can also stop irrational competitive behavior from escalating by addressing the causes of competitive arousal.
When rivalry is intense, for instance, managers can
limit the roles of those who feel it most
reduce time pressure by extending or eliminating arbitrary deadlines
deflect the spotlight by spreading the responsibility for critical competitive decisions among team members.
Decision makers will be most successful when they focus on winning contests in which they have a real advantage—and take a step back from those in which winning exacts too high a cost.
Recently, I excerpted the expressed concerns of in-house counsel about ineffective mediators. Among the complaints was some mediators' refusal to see or acknowledge the other side's "irrationality" As Where's the Magic from the U.K. online Mediator Magazine noted:
It can be frustrating where they [the mediator] can see the irrationality of the other party, how their claims and positions are unsubstantiated, and choose to ignore it,' says Frank Aghovia, legal adviser at Exel Plc. He continues, 'It's like saying, "I know he's talking out of his backside, but can you give him what he wants anyway." He concludes that 'steadfast neutrality is irritating and wastes time.'
Helping litigants and their attorneys reassess their case is one of the mediator's greatest challenges. The mediator intervenes only after the parties' dispute has reached stalemate. Each party to a stalemate has negative attitudes about his adversary that are maintained and prolonged by three psychological mechanisms: selective perception, self-fulfilling prophecy, and autistic hostility.
Selective perception: people tend to select those perceptions that tend to confirm their existing attitudes, and ignore or discount information that would disconfirm their existing attitudes.
Self-fulfilling prophecies: people with negative attitudes about their adversary engage in conduct that provokes the adversary's "expected" response, which confirms the party's original expectation, and a vicious cycle ensues.
Autistic hostility: Parties in litigation have stopped talking with one another about their dispute, communicating only through their attorneys. The social scientists would say that such people are "stuck in autistic hostility, that is, their hostility is perpetuated by their refusal to communicate."
Robinson answers his own rhetorical question in this fashion:
When talking to the UFO-guy, I am totally with him. Listening, asking questions, trying to understand whether his delusion actually has some hidden meaningthat might suggest a way to resolve the dispute without asking the other party to "buy in" to the UFO story.
After giving Mr. UFO an opportunity to have his say and to experience -- perhaps for the first time ever -- another human being's willingness to temporarily suspend his disbelief -- I begin to gently "reality test." To do so, I do not have to doubt Mr. UFO's story. I can suggest, however, that not everyone is as understanding as I am.
"Have you told this story to many people?" I might ask. "And what has their response been?" Do you have any reason to believe that a judge or jury might be more likely to believe this narrative of events more than, say, your mother, sister, cousin, wife, best friend, etc. were?
Robinson's suggested action between the rock of understanding and the hard place of consensual reality is shrewd and effective. It neatly avoids the problem recently raised by my friend and colleague Jeff Kichaven who has likened piling rationales atop one another for the purpose of changing another's mind to raising your voice for the purpose of communicating with a deaf man.
Harvard Business School professors Deepak Malhotra and Max H. Bazerman address the irrationality problem in another fashion in their tremendously useful book Negotiation Genius.
"Whenever our students or clients tell us about their 'irrational' or 'crazy' counterparts," they write, "we work with them to carefully consider whether the other side is truly irrational. Almost always, the answer is no."
Malhotra and Bazerman list the mistakes that lead us to call our negotiating partners "nuts," "delusional" or "evil" as follows:
Mistake No. 1: They are Not Delusional, They are Uninformed.
If you can educate or inform your bargaining partner, say Malhotra and Bazerman
about their true interests, the consequences of their actions, the strength of your BATNA, and so on - there is a strong likelihood they will make better decisions . . . [I]f someone says "no" to an offer that you know is in her best interest, do not assume she is irrational. Instead, work to ensure that she understands why the offer is in her best interest. She may simply have misunderstood or ignored a crucial piece of information.
Mistake No. 2: They are Not Irrational; They Have Hidden Constraints
In negotiation, a wide variety of possible constraints exist. The other side may be constrained by advice from her lawyers, by the fear of setting a dangerous precedent, by promises she has made to other parties [this is a particularly common constraint in IP infringement actions] by time pressure and so on. [D]iscover these constraints . . . and . . help other parties overcome them . . . rather than dismissing others as irrational.
Mistake No. 3: They are Not Irrational; They Have Hidden Interests
[P]eople will sometimes reject your offer because they think it is unfair, because they don't like you [or are tired of feeling as if you don't like them] or for other reasons that have nothing to do with the obvious merits of your proposal. These people are not irrational; they are simply fulfilling needs and interests that you may not fully appreciate. . . [I]nvestigate: "What might be motivating her to act this way? What are all of her interests?"
But What if They Really Are Irrational
If your counterpart truly is irrational -- in other words, he is determined to work against what is in his best interest -- then your options will be fewer. You can try to push through an agreement despite his irrationality, you can try to "go around him" by negotiating with someone else with authority who seems more willing to listen to reasons . . . or you may decide to pursue your BATNA because his irrationality has eliminated all hope of creating value.
I have a friend who is, literally, a rocket scientist. He says that there are no problems which cannot be solved -- only problems that we don't yet understand. This is as true in negotiation as it is in rocket science. In both cases, the wisest course is to assume you know nothing and begin asking the type of questions that would help learn something.
Thanks to Geoff Sharp at mediator blah blah for directing us to this great U.K. Mediation resource, The Mediator Magazine which is great to poke around in a little when you're home for mother's day and mom's gone off to bed. Here, for instance, are some well taken criticisms of mediation practice by in-house counsel from the article Where's the Magic?
Top of the list of issues which invite scorn is perceived weakness on the part of the mediator. Giving palpable nonsense and well documented fact equal air-time in the interests of appearing open-minded has backfired for a number of mediators. 'It can be frustrating where they [the mediator] can see the irrationality of the other party, how their claims and positions are unsubstantiated, and choose to ignore it,' says Frank Aghovia, legal adviser at Exel Plc. He continues, 'It's like saying, "I know he's talking out of his backside, but can you give him what he wants anyway." He concludes that 'steadfast neutrality is irritating and wastes time.'
One public sector lawyer, though generally more favourably disposed towards mediation, shares a sense of frustration with the purely facilitative model: 'If a mediator is too passive,' he says, 'there isn't going to be any realignment of expectations, there isn't going to be the refocusing of the parties on the strengths and weaknesses of their own and the other party's case. It's simply not going to happen. You're not going to facilitate the movement.'
Naturally it is all a question of degree, but frustration with a style perceived to be 'slow', 'wet', 'namby-pamby', or worse, 'like therapy' is real, and stands in the way of mediation increasing its meagre market share.
It is also evident that some mediators have failed to manage the process with sufficient vigour, fuelling comments like 'I've been at quite a few [mediations] and question what the mediator actually does.' No doubt they've had to spend all their time working with the other side, but if so, this needs to be communicated.
This lack of robustness which for many is synonymous with mediation has bred the widespread belief that mediation only works when both sides want to mediate. And where that's the case, without prejudice discussions will do the job. Until mediation's image hardens to the point where people realise that great mediators can deal with the shirty, dismissive and gratuitously rude types, mediation will remain in the shadows. . . .
These criticisms are real and require attention. I'm uncertain of the state of "professional" mediation in the U.K., but here in California, its all over the board. For the mediation advocate and his client, finding the right mediator for the right case at the right time is not only more art than science, it's often more guesswork than art.
I'll be dealing with the issues raised by this U.K. article in the coming weeks. For the full article, click on the link above.
The BFNetwork has not only introduced me to many business blogs that otherwise wouldn't have come to my attention, my narcissistic perusal of my own posts listed there have drawn me into abundant Forbes.com resources that benefit my readers.
I urge my fellow Forbes BFN Bloggers to poke around Forbe's pages to unearth riches that can benefit their readers there.
(right: Forbes.com staff writer Tara Weiss)
That ridiculously lengthy introduction out of the way, here's a great article on how to negotiate a higher salary during a recession from Forbes.com staff writer Tara Weiss -- How to Ask For A Raise When Times Are Hard. Summary below:
find out what people in your market and your position are making.
once you know your market value, request a conversation with your manager about salary
remind your manager of the strong contributions you've made.
during an economic downturn, highlight new clients you've brought to the firm and cost-saving measures you've enacted. Include the key projects you've completed and goals you've met.
prove you're vital to getting the company through a recession
present your manager with the research you collected on what others in your market are making.
consider perks outside of salary such as vacation time, health benefits, or reimbursement for commuting and professional training in a job-related skill.
if you're rejected, ask what you can do in the next six months to make this conversation successful the next time.
I'm asked this morning by an ADR colleague whether we can criticize diversity without sounding like racists. The question itself is problematic because it not only assumes a racial divide, it places "us" on the "white" side of it.
introducing supplier diversity to the ADR profession [by] extend[ing] business opportunities to certified minority and women ADR neutrals. These efforts, coined as "second tier," allow Shell to influence prime or majority ADR firms, with whom they do business, to also contract with minority and women owned ADR firms within the business community.
In the upcoming months Shell will be targeting . . . ADR services to participate in second tier efforts. Shell astutely recognizes that by embracing the concept of inclusion, the company will rise to a higher level, reflecting its belief that it "will benefit from diversity through better relationships with customers, suppliers, partners, employees, government and other stakeholders, with positive impact on the bottom line."
I'm assuming that my questioner does not agree with the "affirmative action" aspect of this program. Having debated the affirmative action issue since I began law school at U.C. Davis where the Supreme Court Bakke decision originated, I know well how divisive this issue can be. But it is an important issue -- an issue critical to a nation not only "conceived in liberty" but "dedicated to the proposition that all men (sic) are created equal."
So Let's Take a Look at ADR and Diversity
I'll ask the academics over at the ADR Prof Blog to correct me if I'm wrong.
I understand the academic criticism of mediation to be this: in the immediate post-civil rights era while greater legal protections have been afforded to women and under-represented minorities, the "people" have been channeled into a system -- mediation -- that lacks the prejudice-flattening constraints of the rule of law. More disturbing, say critics, is the fact that this "lawless" system is largely presided over by -- excuse me if this offends anyone -- OLD WHITE MEN.
I've learned more about racial bias talking to my liberal (white) "unprejudiced" friends this election season than I have since I participated in the "second wave" women's movement in the early nineteen seventies (remember consciousness raising?) I do not judge them, nor myself, for our necessarily limited view which just happens to be that of the dominant culture.
I know we still have a serious racial divide because when I talk to my educated and liberal African American friends they say things that shock me. Things like -- the U.S. may have started the AIDS epidemic to rid the world of Africans. OK. I get it. There's something about their experience of America that is so radically different from mine that I think their point of view is, frankly, just a little nuts. This is what I do know -- I will never truly be able to see the world from their point of view.
That said, I do think we can criticize people for taking advantage of "diversity" issues to forward an agenda -- or their own personal advancement -- other than forwarding diversity itself. We can criticize those who would deepen the divide to profit from it.
If I could write a sentence in a circle at this point, instead of linearly as the language requires me to do, I would do so. Here is what I understood Obama's response to the question of the racial divide in America to be.
Acknowledge it Heal it Move on Heal it Move on Acknowledge itMove On Heal it Acknowledge it
There are no periods in this sentence because this activity needs to be constant and on-going. Because we will always be stuck in our own point of view. Because in-group and out-group prejudice will always be with us. And because the more visible markers there are for "otherness" in others, the more prey we are to the error of dividing the world into "us" and 'them."
The answer? Diversity. Vigilance. Education.
Toward that end, here are some ADR Diversity resources:
Center for Dispute Resolution, whose mission is to "to promote and provide education and comprehensive approaches to dispute resolution that constructively serve the needs of our culturally diverse society."
A friend and former legal partner was fond of saying that the biggest lie in the business was I don't take it personally. After four years of full-time mediation, I have another "Big Lie" to add – it’s only about money.
The social scientists who sutdy these things say that the way in which we respond to adversity "often reflects the fact that [our] prestige or status has been threatened more than the fact that [our] purchasing power has been diminished." Miller, Disrespect and the Experience of Injustice, Annual Review of Psychology (2002). In other words, the corporate C.E.O., like any other kid on the block, will retaliate when he feels he has been disrespected.
Conversely, research shows that business people are reluctant to recommend legal action if they believe that they and their company have been treated respectfully. Although this is particularly true of fiduciary and special relationships such as lawyer-client and business partnerships of all kinds, it also applies to arm's length business transactions.
Every commercial interaction, we are told, "represents a social exchange and every form of social behavior represents a resource." Id. People's satisfaction with the outcome of a commercial transaction therefore "depends highly, and often primarily, on their perception of the fairness of those outcomes." Id.
When we, as litigators and counsellors, actively listen to what our clients and our adversaries are saying about the rights and responsibilities of all participants in an ethical business community, we stand the best chance of engendering mutual trust and respect among the parties. In that atmosphere, the probability of becoming embroiled in litigation decreases precipitously. When the parties believe that their concerns are being heard and respected, losses that might otherwise become lawsuits, are far more likely to be addressed as the understandable consequence of the inevitable mistakes and miscommunications that attend all human enterprises.
As much as we'd like to believe that we don't take it personally or that it's only about money, the good news for all of us is that we do and it's not.
As Alley reports, David Eun, VP in charge of Google content partnerships told Dow Jones Newswires ``we're going all the way to the Supreme Court. We're very clear about it.''
In the law biz we call this "posturing," and that "all the way to the Supreme Court" comment we call laughable posturing. Alley says:
Call us dreamers, but we still think both sides could kiss and make up before this gets to the Supremes. After all, the two sides were negotiating for months before going hostile. And Sumner Redstone's other media company -- CBS -- seems quite happy with YouTube. So while both sides can argue that there are important principles at play here, we're pretty sure they can get resolved with an appropriately sized check.
Of course it might well not be the size of a check but some other set of commercial exchanges, concessions, or synergies that will eventually settle the thing.
These are business people for goodness sakes. And never was a business person born who wants to establish Supreme Court precedent. Talk about giving away your power and control.
We welcome comments from more knowledgeable readers!
Here's a teaser to get you to the Business Growth post:
Remember that classic scene in "Erin Brokovich" where the high powered, electric utility law team shows up in force to negotiate with the small town law firm? Ed Masry sees them coming in and gets all his staff to file into the board room so they have more "lawyers" on their side of the table… and overpowers the power brokers.
Would you like to have a system that helps you think on your feet like that?
Here is a list of 8 questions you can ask yourself when you suddenly realize that you have to prepare for a negotiation. Use these to generate quick preparation for any negotiation.
Life is one negotiation after another, though too few of us are equipped for battle. Formidable dealmakers like Warren Buffett, Bill Clinton and sports agent Scott Boras tend to be born, not made.
Yet talk to negotiating pros from the worlds of government, finance and media and they'll admit there is at least some science to this art. Winning every point is rarely an option, of course, but if you keep a few principles in mind, you can tilt things in your favor--whether you're signing a peace treaty or just angling for a raise.
If you remember one thing about negotiating, it should be this: It's not the maneuvering once you're in the trenches, but rather the preparation before sitting down at the table that counts.
That means taking the time to define what you want, what you are willing to accept and at what point you will walk away. It also means doing enough research to know what the other side wants--and how far they are willing to go to get it.
My first day of mediation training progressed in somewhat the same fashion as my first few weeks in Civil Procedure. I remember struggling with the theoretical bases of jurisdiction in Pennoyer v. Neff one day only to be told the following week that Pennoyer was no longer the law. “Why,” I remember thinking, “did we even bother with Pennoyer when this Buckeye case about an exploding boiler now seems to be the law? Or would it be replaced next week as well?”
Law school, which taught me to “think like a lawyer,” was the precise opposite of my new mediation studies. Now, it seemed, I was being trained to stop “thinking like a lawyer.” Still, mediation, like the law, was full of conflicting ideologies from which it appeared I was required to choose.
It was easy for me to be evaluative: I had 25 years of legal practice in my backpack. I learned Dr. Cialdini’s “Principles of Ethical Influence”—Reciprocation, Scarcity (the rule of the rare), Authority, Commitment, Empathy, and, Consensus. These power principles helped the mediator to “make the other side see reason” when called upon to do so.
But the evaluative style was not the only prescribed route to mediation mastery. There were many who favored facilitation. The facilitative mediator first creates an atmosphere of hope and safety before helping the parties locate areas of agreement and mutual benefit. Here, the mediator is a follower or helper on the path to resolution, like the protective figures who appear early in a hero’s journey to enlightenment.
You can’t immerse yourself in mediation for long before you hear the clamor of the transformative crowd. Facilitative mediators, say the transformative folks, too often present themselves as wizards who intrude upon the parties’ conflict with their own agenda—usually “resolution be damned, let’s settle this darn thing!” The transformative mediator lets the session wheel out of control if that is where it is eager to go. Conflict is not seen as a state to be avoided or suppressed. Like a loving mother following the course of her child’s flu, the transformative mediator provides the parties with encouragement, opportunities to rest, lots of fluids and a metaphoric place to lay their heads as the conflict runs its natural course.
When I first brought this tangle of methodologies to the few master mediators I know, they all made short work of it with the scalpel of experience. “You are the technique,” they instructed. “Just stay in the process. Don’t guess. Ask questions. Listen. Don’t give up before the miracle of mediation happens.”
Now, four years into a full-time ADR practice, I am still struggling to embrace the entire dispute—the business or people problem that found its way to an attorney because of the justice issues with which it was burdened. I often feel that I’m walking a razor’s edge. I will never stop “thinking like a lawyer.” Nor will I stop pursuing this new way of thinking—one that looks for the opportunity to finesse the legal impasse by using the problem itself as an opportunity to broker a deal.
Why mediation? For me, it’s simply a broader canvass on which to paint a new picture. How mediation? In baby steps, one after the other, in just the same way I learned to be a litigator and trial attorney. How can the Human Factor help with your own life and legal practice? Stick around. Miracles are common here. We think you’ll enjoy the ride.
I could write an entire book on why law students should study negotiation as well as an entire chapter on why they should study texts written for MBA students rather than law students. The latter topic I will cover in a future post. The former has already been written succinctly as an article -- link and excerpts below.
Cathy Cronin-Harrisis Co-Chair of the Advocacy Committee of the ABA Section of Dispute Resolution. She's a Senior Consultant to the International Institute for Conflict Prevention & Resolution (CPR) and teaches Negotiation at Columbia Law School. She has taught at Georgetown and Fordham Law Schools, and has been an Administrative Law Judge and litigator. She can be reached at firstname.lastname@example.org.
Familiarity with Negotiation Approaches
[N]egotiation is a . . . . complicated process and demands a . . . . mind set that recognizes the inherent tension in negotiation: you must engage the other side in order to get to agreement while both sides are in a seeming struggle to achieve apparently conflicting objectives. That tension demands more subtlety than pushing [your opponent] into submission.
[E]xposure to negotiation theory and practice will help you understand "when to hold 'em," "when to fold 'em" and when and how to develop other feasible options and approaches beyond just holding out or giving in.
[Negotiation] courses stress the collaborative mode of negotiation or mutual gains bargaining popularized by Fisher and Ury in Getting to Yes. Its fundamental concepts stress objective standards, creativity, option development, respect for opponents and satisfying parties - genuine underlying interests rather than their positions.
Such exposure will expand your repertoire and allow you to negotiate with agility. You'll appreciate varying approaches people take to negotiation, discover ways to lessen competitive tendencies, become more conscious of options you can use rather than relying on raw intuition, appreciate the significant human elements impacting negotiation success, and learn the value of planning. As you become familiar with the broad brush approaches, you'll be enhancing the key skills below.
a. Expanded Communication Skills
In adversarial settings, assertion skills dominate: lawyers use logic, well-developed statement and presentation skills, tightly orchestrated cross-examination questions, and tools to connect with the trier-of-fact, such as compelling language, analogies and themes, to win the day. But when you negotiate, an additional set of communication tools comes into play along with asserting. Those skills focus on enhancing dialogue to solve the problem.
It's usually a challenge for lawyers to move from assertive statements to a wider band of communication skills. So negotiators learn to use better listening skills which includes confirming understanding of the other side's statements. They use open-ended questioning rather than restricted cross-examination formats to understand and dig out relevant information. They focus on body language and other signals embedded in communications that can provide information indirectly. They also refine assertion skills by ratcheting down the tone and format of statements to express needs compellingly without rancor. So negotiation will complement any communication skills learned in adversarial settings.
But beyond improving your negotiating ability in disputes, these skills will assist you in conducting your daily practice interactions including interviewing clients, unearthing their real needs and interests, advising them of your evaluations, enlarging their view of solution potential, calming them down, and in a host of other ways both professionally and personally.
b. Enhanced Persuasive Skills
The persuasion studied in most courses emphasizes logical rational analysis. Appellate judges apply it in every case based on the lawyers' logical presentations. Needed in negotiation? By all means. But persuasion to induce another to make a deal requires more. It includes your credibility, command of the subject, astute use of reasonable demands, varied questioning, and relationship building with the other side. We also persuade by showing our willingness to be persuaded: by meeting the other's needs and concerns and exploring a variety of options that might satisfy both entities rather than only pushing our agenda. And some psychological insights come into play about framing our requirements and anticipating likely reactions so we can make our offers more acceptable. While adversarial persuasion involves many of these tools, they are used to convince an outsider that you're right. Negotiation persuasion seeks to embrace your opponent, from whom you want something for yourself, and requires persuasive approaches we ordinarily don't consider. c. Appreciation of the Role of Perceptions
Every trial lawyer knows that perception plays a role in the court room: it's not just about facts. Trial advocacy aims, in part, to shift the judge or juries' perceptions in your favor. In negotiation, we also deal with perception change efforts since negotiators, like everyone else, bring misperceptions to the negotiation table. They make assumptions, they suffer from partial or selective perception, and they tend to view the opposing side with suspicion. So, we seek to amplify those perceptions to remove the negative conclusions the other side draws from their misperceptions which impede willingness to find solutions. We clarify our intent that may have been misperceived; we demonstrate we're not just competing which they might have assumed; and, we suggest solutions to demonstrate regard for their concerns as well as our own. We explore hypothetical outcomes to induce a broader view of settlement potential. Even in making offers, we account for perception barriers in the way we state offers and use rationales to caste new light on their justifiability. We recognize that the way we use actual leverage or power can alter the other's perceptions toward or against us. Exploring these concepts underscores the important role that perceptual awareness plays in negotiation success.
d. Appreciation of the Human Dynamic
One can't effectively negotiate or help orchestrate it as a mediator without recognizing the human emotions at play in disputes. Emotions greatly affect receptivity to settlement proposals. Anger at past events, negative reactions to offers deemed insulting, absence of control over a situation or perceived lack of respect, attention or appreciation can derail deals. On the other hand, creating a positive emotional environment by building trust, building relationships across the table, and acknowledging the other's emotional state can alleviate some of the negative feelings in negotiation. These courses will highlight the need to consider the human element whenever you deal with clients or others in conflict.
e. Expanded Problem Solving Ability
Many lawyers went to law school to help people solve problems. Then, the adversarial adjudicatory system gets ingrained in their blood. That system and the rule of law it's built upon are still the best route to justice I know, when you can't settle matters. But, to function well as a twenty-first century lawyer, you need to complement your adversarial skills with problem solving abilities that support the mutual search for solutions when conflict exists. The negotiation skills you'll garner in the consensual ADR courses will prepare you to engage in collaborative problem-solving whenever possible and apply many of its tenets and skills even in extremely competitive situations.
While I've only touched on the key benefits of gaining negotiation training by enrolling in one of the consensual ADR courses, I hope I've helped you appreciate the need to treat those elective courses as part of your personnel core curriculum. Rounding out adversarial advocacy courses with vital settlement skills will pay vast dividends in every area of law practice despite your chosen field. You'll be more confident and prepared for the challenges ahead and more successful as you join us in the near future.
In this part of the new series on getting the parties to the bargaining table, I interview former in-house Chrysler counsel and former Hogan & Hartson partner, Lew Goldfarb, who now has his own full-time outside settlement counsel firm.
what's the difference between outside settlement counsel and a mediator?
Settlement counsel is an advocate for one side, in my case, that's usually the defense. While the mediator is a neutral who tries to facilitate a compromise, settlement counsel attempts to achieve better outcomes for his clients for two reasons: (a) I have a complete understanding of the full range of my clients' interests, many of which are often not communicated to litigation counsel; and, (b) it is easier for me to learn the true motivations (if not the bottom line) of plaintiffs' counsel than it is for litigation counsel to do so.
In class actions, which are my specialty, I strive to craft a solution that responds to plaintiffs' counsel's needs while imposing minimal costs on my client. There are numerous, creative ways to settle class actions that accomplish both objectives effectively.
I sometimes find that the parties for whom I mediate have not confided in the litigation team all of the corporate interests that are propelling the client toward settlement. I found this to be true in litigation practice and as a mediator. Do you encounter this as outside settlement counsel and, if so, how do you serve the client's interests without stepping on the toes of litigation counsel and vice verse.
There's always a bit of a communication gap between litigation counsel and the client. When clients hire me as settlement counsel it's in their interest to provide me with complete information in order to get them the best possible outcome, so they rarely withhold any important information fro me. In a recent case, I was not only invited to speak at several client board meetings, I was also asked to spend several days in the field on sales trucks to observe the client's franchisees that were the subject of the lawsuit. As a mediator, I usually only see the information that the litigation counsel provides as part of his client's submission, which is probably much more selective.
Now that I've been mediating full time for four years, I find I'm much more prone to ask the parties interest-based questions than I was as a litigator. When I say "interest based," I mean corporate realities such as chain of command; upcoming mergers or acquisitions; a new management team; quarter- or year-end financial planning; divisional loss history; and, the like. If you find that to be true as outside settlement counsel, what do you think accounts for corporate counsel keeping their litigation team largely in the dark about issues that might have a substantial impact on the ultimate resolution of the matter?
Since I have always approached litigation with a view toward early resolution, either as in house counsel, outside litigator or mediator, I would usually make the same inquiries regarding the client interests that you do as a mediator. My only explanation as to why corporate counsel may withhold such information from their litigators may be that they are not seeking a negotiated outcome. In that case, they may believe that their litigators will be more effective and focused without being encumbered with "interest-based" information.
My peers in the mediation world are fond of saying that litigators have to "churn" cases before settling them. I find that a shockingly cynical attitude. I often found that clients were more settlement averse than their litigation counsel. What is your experience in that regard?
I have to admit that I am more on the side of the cynics. I've had this longstanding belief that the legal profession imposes enormous economic costs on society without a commensurate benefit to the public, all in the name of providing access to the legal process. (See Goldfarb v. Virginia State Bar, 423 U.S.886 ) I believe that litigators tell themselves that they were hired to litigate not settle the case. I think it's less a matter of "churning" than it is the litigators' belief believe that "early" resolution means winning a dispositive motion, even if it takes a year or more to get an outcome. (See my article "Litigate it or End it" which discusses this issue.)
While there are always legitimate corporate reasons for not settling a case, litigators are reluctant to discuss early settlement with their clients for two reasons: (1) loss of fees; and, (2) fear of showing any lack of resolve to win the case. My experience is not that clients are settlement averse, rather that litigation counsel convince their clients to hold off on settlement for one more dispositive motion.
How did you come to champion the use of settlement counsel?
I honed my skills as settlement counsel while serving for 16 years in house at Chrysler. When I arrived at Chrysler in 1985, the company was engaged in costly litigation with GM over a GM/Toyota joint manufacturing venture in Calif. The General Counsel asked me to look for alternatives to the litigation, which is when I found an article by Roger Fisher of Harvard promoting the use of separate settlement counsel. Chrysler did so and settled the case within a few months. I was then placed in the role of overseeing all class action litigation and serving as settlement counsel as well. Most in house counsel are not sufficiently immersed in the litigation, however, to serve as settlement counsel or simply do not have the time.
As a former litigation partner in an AmLaw 100 law firm, do you wish you'd had inside settlement attorneys working side by side the litigation team?
Because of my experience as in house counsel settling cases, I was always the partner urging my fellow litigators to evaluate settlement possibilities. For all the reasons set forth in my answers above, most large law firms do not embrace the idea of institutionalizing an in-firm settlement section. One exception was Wilmer Cutler in DC which did set up an ADR group within the firm with the idea that clients would make use of it. I don't know whether it still exists. I still think it is a great idea, although not as effective as the hiring of a completely separate firm or individual to explore settlement.
Doesn't it take outside settlement counsel an unnecessarily long time to "get up to speed" on a major piece of litigation -- thereby making it less cost effective than simply hiring a mediator to help the litigators settle their own cases?
Not at all. When I take on an assignment as settlement counsel I provide the client with a budget that includes a separate breakdown for "up to speed" time. While I need to understand the merits of the client's defense I do not need to read all the briefs since I generally am not called on to argue the merits of the case. Most importantly, I must fully understand what the client's interests are and what it is willing to offer up in settlement. For better or worse, what I offer is a very low cost, low risk means of exploring and settling complex litigation.
Thanks Lew! I can think of a couple of complex anti-trust, securities and IP cases I could have used your services for. I hope this interview gets the word out to attorneys feeling pressured to settle a difficult case but unable to get the other side to the bargaining table.
If you aren't using writs of attachment in contract cases where the amount due is certain, you aren't using the most powerful means of increasing your bargaining power in litigation.
Attend LACBA's Brown Bag Lunch with Judge James Chalfant at the Stanley Mosk Courthouse 111 N. Hill Street, Los Angeles on May 15, 2008. Program Description:
Writs and Receivers: Practice tips for those who are rarely there. Judge James Chalfant will host a brown bag lunch highlighting tips and tricks for those who may not have much experience in this area. There is no cost to attend, but participation is limited to the first 12 attorneys who register. The program will be held in the judge's chambers at Stanley Mosk Courthouse, Dept 85. Please note, there is no CLE credit for this program.
When you have a problem, when there's something you engage in with Wal-Mart that requires agreement so that it becomes a negotiation, the first advice is to think in partnership terms, really focus on a common goal, of getting costs out, for example, and ask questions. Don't make demands or statements ... you know, can we do this better and so forth. If the relationship with Wal-Mart is truly a partnership, negotiating to resolve differences should not endanger the tenor of the partnership.
Don't spend time griping. Be problem solvers instead. Approach Wal-Mart by saying, "Let's work together and drive costs down and produce it so much cheaper you don't have to replace me, because if you work with me I could do it better."
Learn from and lobby with people and their partners who have credibility, and with people having problems in the field.
Don't ignore small issues or let things fester.
Do not let Wal-Mart become more than 20 percent of your company's business. It's hard to negotiate with a company that controls yours.
Never go into a meeting without a clear agenda. Make good use of the buyers' face time. Leave with answers. Don't make small talk. Get to the point; their time is valuable. Bring underlying issues to the surface. Attack them head on and find resolution face to face.
Trying to bluff Wal-Mart is never a good idea. There is always someone willing to do it cheaper to gain the business. You have to treat the relationship as a marriage.
ommunication and compromise is key.
Don't take for granted that just because the buyer is young they don't know what they are talking about or that it will be an easy sell. Most young buyers are very ambitious to move up within the company and can be some of the toughest, most educated buyers you will encounter. Know your product all the way from the production standpoint to the end use.
Chances are your buyer does, and will expect you to be even more knowledgeable.
On North Korea: "We should negotiate with the North Koreans. We should be tough. We should require that they stop their nuclear development program. We should have the absolute ability to verify that that has occurred."
On the Middle East: Has said that he believes "a two-state solution is ultimately the answer" but would not negotiate with Yasir Arafat. (before Arafat's death, obviously) Would send an envoy to the region.
Sixty-four percent of Israelis say the government must hold direct talks with the Hamas government in Gaza toward a cease-fire and the release of captive soldier Gilad Shalit. Less than one-third (28 percent) still opposes such talks.
I could go on but you get the point. The first decision any negotiator must make is whether he's willing to negotiate with the "opposition." And the second is on what terms.
That decision -- and the many ways in which you can bring your opponent to the bargaining table any time you wish -- with the expectation that your negotiations will either successfully resolve your dispute or drastically limit the amount of time you spend litigating it before settlement will be the subject of this week's posts.
Along the way, we'll talk about the many ways in which the masters of international diplomacy manage to take advantage of favorable negotiation conditions and to finesse unfavorable political climates for the purpose of getting warring parties to meet in an attempt to reach accord..
Any good negotiator knows that you have to practice. Plan what you want to say and how you want to say it. Have mock negotiations with your friends or your career advisor. Practice negotiating at the drycleaner, with your cable company and with any other service you purchase. Eventually negotiating will feel natural, and you’ll appear more comfortable while you’re doing it. This is important, because you don’t want to come off as nervous or aggressive.
Penelope suggests the weakest strategy available -- exchange power for sympathy. "If one person has a great BATNA," writes Penelope, "and the other has a terrible one, it’s not really negotiations; it’s trying to get a little something extra. It’s asking for a favor. If you approach negotiations from this perspective then you are much more likely to get a little bit of what you want."
Two of the savviest negotiators around Deepak Malhotra and Max Bazerman in their tremendously practical book Negotiation Genius have devoted an entire chapter to Penelope's problem called, not surprisingly, Negotiating from a Position of Weakness. Their recommended strategies include the following:
Don't Reveal that You Are Weak
[H]aving a weak BATNA is not terribly problematic if the other side does not know that your BATNA is weak. If you have a weak BATNA, don't advertise it!
Overcome Your Weakness by Leveraging Their Weakness
[W]hen both parties have a weak BATNA, it means that the [Zone of Potential Agreement] is large. In other words, a lot of value is created when the two sides reach an agreement. Who claims more of this value? . . . [T]he one who fares better is the one who makes the other side's weakness more salient throughout the negotiation.
Identify and Leverage Your Distinct Value Proposition
[V]ery often, you do bring something to the table that distinguishes you from your competitors. This is your distinct value proposition (DVP), and it need not be a lower price. You may have a better product,, a higher-quality service, a good reputation, a strong brand, or a host of other assets that your [bargaining partner] values and that you can provide more effectively or cheaply than your competitors.
If Your Position is Very Weak, Consider Relinquishing What Little Power You Do Have (This was Penelope's strategyin the Yahoo negotiation subject of her post).
[I]f you can't out muscle the other side in a negotiation, you may want to stop flexing our muscles and, instead, simply ask them to help you. When negotiators try to leverage their power, others reciprocate. This pattern can be disastrous when you are the weaker party. But when you make it clear that you have no intention of fighting or negotiating aggressively, others also may soften their stance.
Strategize on the Basis of Your Entire Negotiation Portfolio
[A]udit the implicit assumptions you make when formulating your negotiation strategy. You may perceive yourself as being "weak" if you only measure strength as the ability to push hard in any given negotiation without losing the deal. But you may discover that you are actually quite "strong" once you begin to think about your ability to withstand losing some deals because you are maximizing the value of your entire negotiation portfolio.
Increase Your Strength by Building Coalitions with Other Weak Parties
In the realm of international relations, a vivid example of the power of coalitions surfaced during the 2003 World Trade Organization negotiations in Cancun, Mexico. Disgruntled by the continued lack of attention paid to the issues of concern to developing nations . . . twenty-one "weak" countries banded together to create the Group of 21. This group is now in a much stronger position to negotiate for the interests of its members than any member nation would have been on its own.
Leverage the Power of Your Extreme Weakness-They May Need You to Survive
[I]t is often useful to tell the negotiation "bully" that an overly strong show of force can be counterproductive: "If you push me too hard, you'll destroy me -- and lose a value-creating partner."
Understand -- and Attack -- the Source of Their Power
A number of Planned Parenthood clinics around the country have adopted a particularly creative strategy for fighting back [against protesters], usually referred to as the "Pledge-a-Picket" Program. Here's how it works: The clinic asks its supporters to pledge donations to the clinic on a per protester basis. The more protesters that show up to picket the clinic, the more money the clinic raises in donations! . . . The Planned Parenthood of Central Texas in Waco has even posted a sign outside its clinic that read: "Even Our Protesters Support Planned Parenthood."
Once the Planned Parenthood clinics understood that the source of their opponents' power was the ability to draw large numbers of protesters outside the clinic, they were able to think of a novel way of diminishing the benefits of doing so.
Malhotra and Bazerman conclude their chapter on Negotiating from a Position of Weakness by noting that
while being in a position of weakness is sometimes unavoidable, you will negotiate most effectively when you leverage the fundamentals -- systematic preparation and careful strategy formulation.
The provocative comment we're following is Jay Welsh's remark that to settle most cases the Plaintiff has to accept a lot less than he wanted to recover and the defendant has to pay a lot more than he ever imagined paying. And the response we're replying to is Canadian lawyer Michael Webster's:
When the issues have been crystallized into legal ones so well, you are in a lose/lose situation. The manager's dilemma then becomes counsel's dilemma: how do I manage to convince my client to lose more than I ever predicted and still maintain my own credibility.
The reason litigators settle law suits is because the outcome of litigation is uncertain and its pursuit expensive. But that just states the problem. How do you "tell" a client in the midst of expensive litigation that he's going to have to pay way more or accept way less than his attorney predicted (with appropriate disclaimers) long, long ago?
First, let me provide a checklist for success in commercial mediation:
Bring the real deal-makers to the mediation or settlement conference for it is they -- not their attorneys -- who will make the decision to pay way more or to accept way less than they had previously imagined.
Bring the parties back into the conflict as participants in its resolution again. Businesses have commercial problems that have business solutions. Litigation is often just the stick to force the continuation of commercial negotiations that broke down in so spectacular a way that the parties stopped talking to one another, hired lawyers, and began to fight over legal issues the parties neither care about nor understand. The parties have now experienced how surreal their negotiation becomes when it's conducted in the courts. They're probably ready to deal again. Let them.
Permit the parties to discuss all aspects of the conflict whether they are relevant to the legal issues or not. The reason one party initiated litigation against the other party is not because he wanted to create precedent. And if precedent is what a party wants, money might but often cannot settle the matter.
Bring the experts along and let them talk to one another about the ways in which the matter might be resolved or even why their expert opinions are diametrically opposed.
Address the parties' justice issues. People seek out lawyers for one reason and one reason only. Because they believe themselves to be the victims of an injustice. And if its the defendant you represent, the injustice visited upon it is the litigation itself. I spend a significant amount of time during a mediation discussing justice issues with the parties.
they're being extorted
they're being low-balled
they were defrauded
their trust and confidence was betrayed
their competitor's market tactics have been unfair and violative of any number of state or federal laws
their intellectual property was stolen
etc., etc., etc.
Let the mediator talk with the parties about what the justice system can do, what it should do, what it most likely cannot or will not do. Most parties will not be happy with their attorneys if their justice issues are not addressed at the time of settlement. And its my job to make clients happy with their attorneys.
Let the mediator help the parties understand that their case has -- with no one's fault -- gotten worse rather than better over time and why.
When all else fails, blame the "system."
Why Parties Pay More or Accept Less than They Want To
Jay Welsh is right. If the parties have hired a mediator to settle complex commercial or mass tort litigation, they have done so because they need to pay more and accept less than they are prepared to do. Otherwise, they'd settle without the assistance of a mediator.
This does not mean that the mediator bangs heads or twists arms. There are hundreds of reasons why parties do not continue to trial and thousands of good excuses for corporate counsel to stop the bleeding. They include:
the witnesses on the other side performed better in pre-trial testimony than expected
the Judge made pre-trial rulings that cut the heart out of your case
the Supreme Court (state or federal) just over-turned a hundred years of precedent making one party's legal case far worse and the other's far better than expected
it's the economy, stupid
the client realizes during the course of the mediation that there's more than one way to organize the facts and apply the law -- something lawyers are trained to do and even sophisticated clients find hard to swallow. Having had an "aha" experience during the mediation, the client realizes there's more (or less) at risk than he's been thinking and the offer/demand now on the table looks pretty darn good after all
the other side becomes un-demonized during the course of the mediation, making it easier to part with money for the purpose of resolving the one thing both sides have in common -- a difficult, uncertain, expensive, dangerous lawsuit.
one side simply out-negotiates the other (it happens)
one or both sides lose heart for the battle when they see that the delta between the their bottom lines is not as great as they expected it to be
the parties manage to "expand the pie" (more about this later) such that the plaintiff does not have to accept that much less nor the defendant pay all that much more than each anticipated (it happens)
one party genuinely develops an understanding of and empathy for the other side's position and changes a hard line attitude against settlement as a result (it happens)
Canadian Lawyer Michael Webster asks about Jay Welsh's comment (see videos) that "in a mediation the plaintiff has to settle for far less than they thought and the the defendant has to pay far more than they ever thought."
"So," asks Webster, "this would be the lose/lose theory of mediation?"
I know when Michael's being sarcastic but decided to respond seriously by noting that Jay himself used the phrase "lose-lose."
I went on to say that the most valuable service I can often perform is to "break through confirmation and other biases/ ** that have interfered with case analysis and caused impasse."
Michael's reply was important:
When the issues have been crystallized into legal ones so well, you are in a lose/lose situation. The manager's dilemma then becomes counsel's dilemma: how do I manage to convince my client to lose more than I ever predicted and still maintain my own credibility.
Though I'm a little tempted to be flip ("this is why they pay me the big bucks") Michael's question nails one of the most difficult issue attorneys must deal with in settlement negotiations. It is certainly one of the most delicate tasks a mediator is called upon to perform.
First Let's Re-Visit Interest-Based vs. Distributive Settlement Negotiations, Asking Ourselves Whether There's Really Such a Thing as a "Pure" Money Case
My husband, with 35-years of complex commercial litigation practice under his belt is my attorney-mediator-communication weather-vane. So I asked him over pancakes this morning, "Honey, do you think there's any such thing as a 'pure' money case?"
Two months ago, he would have said "yes," and given me that "you've changed too much" look. I don't know why he said "no" this morning. But here was the gist of his response.
"Every case involves someone's interests, whether it's the GC or a company executive, or even a 'little guy' down the management chain who made a decision that impacted the course of the dispute four or five years ago. So of course there are innumerable non-monetary concerns that impact why the case is settled and when and for how much. Then again, maybe I've just been living with you for too long."
So let me first say that there is no such thing as a non-interest based negotiation. There are only negotiations in which we ignore the fact that party interests are at play.
This is one of those nature/nurture mind/body duality questions. Yes, it's "just" about money. And yes, the money represents party interests. It's nature and nurture, mind and body, budgetary constraints and party goals and relationships.
Here's another thing. Although the disputing parties may never again be in relationship with one another, the people on each side of the conflict-fence are not only in daily contact, their well-being, livelihoods, self-respect, reputation, promotions, demotions, and salaries depend upon their on-going relationships with one another, which are all in play in every negotiation of every commercial dispute.
And one more thing. Conflict cannot arise in the absence of a relationship. Even though the disputing parties may never again be in relationship, they're sure the heck in relationship now. And the relationship of the disputing parties from the moment conflict arises to the minute it settles has everything to do with its resolution.
There is no "zero-sum" game outside the realm of the virtual or the hypothetical. There is no "rational" man. People -- messy, conflicted, emotion- and interest-driven people -- are the necessary pre-requisite to conflict. How we deal with apparent lose-lose conflicts, "manage" party expectations and deliver bad news in a way our clients can hear it in the next post. Immediately hereafter.
It is a truism that litigation tends to get worse rather than better over time. This is as true in the law as it is in physics -- things fall apart. Your client's clean and righteous narrative tarnishes over time; grows more complex and filled with contradictions. It's a little like a political campaign. Barack's ground-breaking race relations speech and Hillary's single tear aside, Clinton and Obama tend to look worse, not better, over time. We all do.
Whether the value of your legal "case" is up today or down tomorrow turns not only upon the most recent documents produced, pre-trial motion won or witness deposed, it also turns on those things that fall apart over time -- including currency exchange rates.
The micro-economics of settlement timing include corporate events such as quarterly and year-end financial reporting requirements; potential mergers and acquisitions; and, how much financial bleeding your client's divisional president can take this year before worrying about demotion.
In international disputes, currency exchange rates loom large in the macro-economics of settlement timing. My own last really "big" case before I left practice was potentially worth a quarter billion dollars in "hard" damages -- the total projected clean-up costs for 500 toxic waste sites in every Canadian province.
The Canadian dollar was not only weak at the time, it was weakening. Though the question of whose currency would control was contested, my client was confident that Canadian dollars would eventually govern since clean-up costs by the American plaintiff would be paid in Canadian dollars. I remember a time when the Canadian dollar was tumbling in value so rapidly that every time I saw opposing counsel in court I'd remind him of the day's exchange rate with a warning that "your case isn't getting any better over time."
Settlement timing in that case was motion-driven, however, and the matter did not settle until after the entry of a pre-trial judgment in my client's favor pending appeal.
Though I was (and would continue to be) driven by pre-trial losses and victories, savvy settlement counsel would be keeping an eye on macro-economics -- which would, in any international litigation, require someone to be tracking currency exchange rates.
I promised you a series of posts on mediating complex and sophisticated commercial mediation.
Here's what I'm really most interested in doing -- starting a high level conversation among commercial litigators and commercial mediators about the best way in which we can help one another help your clients to achieve the best resolution possible to their commercial dispute and the legal problem/solution associated with it.
I'm always looking for the smartest guy or gal in the room because. I'm just a geek who really enjoys spending time with people who are savvy, astute, original well-read, and, well-spoken. These people tend to see things more clearly than I do and that clarity of vision often results in a way of approaching problems that generates better results in a shorter amount of time than is the norm.
One of the smartest guys in any room is AAA arbitrator and Judicate West mediator, Jay McCauley. O.K., he's Harvard Law and I'm just a state university girl. But pedigree doesn't matter to me. Brilliance and creativity does. Jay and I have recently spent a lot of time talking about the way we feel that we're sometimes talking past our attorney clients and they us. So we have plans to write some really interesting articles that we hope will help both mediators and attorneys achieve better results more consistently when they decide to settle, rather than to try, a case.
Jay's written a lot already. And because I'm now getting around 11,000 hits/month (!!yay!!) I've decided to simply pull up his existing articles on mediating particular commercial disputes before launching our jointly written posts. If any of those 11,000 monthly "hits" come from commercial litigators, we'd LOVE to hear back from you on this series.
That said, here's Jay's article on Wage and Hour Class Action Mediation.
There is no such thing as a "cookie cutter" mediation. Nonetheless, most mediations have, among other things, the following general characteristics:
At least four participants whose interests are not naturally aligned - Plaintiff, Plaintiff's counsel, Defendant and Defendant's counsel.
Little or no genuine concern that a settlement will foster future claims.
Some prospect of integrative, or "value adding," resolutions.
A rich body of applicable case law to serve as the empirical basis for risk-based claims valuation analysis.
A virtually unrestricted free market where almost any resolution agreeable to the parties can be turned into a contract fully enforceable by the courts.
Wage & hour class action mediation, by contrast, has none of these characteristics.
Mediating with Only Three Participants
All fictions aside, there are three, not four, interested participants in a wage & hour mediation. They are the defendant, its counsel, and the counsel for the class. Plaintiffs themselves (including the named representatives) are literally absent from the negotiation altogether, and are typically absent physically from the mediation sessions.
Any imbalance resulting from the absence of plaintiffs themselves is, in theory, "corrected" by an institutional device unique to class actions: the fairness hearing, in which a court imposes outside boundaries on the settlement for the protection of the plaintiffs.
Nonetheless, the absence of the plaintiffs themselves is significant. The court is not, in any sense, a substitute negotiator for the plaintiffs. It simply either approves or rejects the settlement agreement, in accordance with reasonably well-established standards, after the settlement has been negotiated by plaintiffs' counsel and the defense team.
The actual negotiators have a common interest in avoiding agreements so extreme that they will be either rejected by the court, or undermined by excessive "opt-outs" from the plaintiffs themselves. But subject to these outside limits, the three players at the negotiating table have an interest in maximizing two things: the portion of the settlement funds that goes to plaintiffs' counsel as approved fees; and the portion of the settlement funds available to be returned or otherwise used by the defendants.
The upshot is this: Plaintiff's counsel seek, and usually get, one third of the settlement funds as fees; amounts unclaimed by class members revert to the defendant to the extent the court permits ; and the stated settlement amounts include the resulting social security and FICA charges the company will have to bear as a consequence of the settlement - an amount that turns out to be 13.85% of the total paid to the class members. These terms are easily arrived at because those at the negotiating table can "give" each other these benefits, without cost to themselves.
The absence of the plaintiff also eliminates one of the most common challenges a mediator has to face in "ordinary" litigation - the challenge of plaintiffs resisting economically advantageous proposals because of a desire to use the courts to obtain perceived benefits that go beyond economics: retribution for perceived wrongs; public vindication; and principled refuge in the Rule of Law.
This not to say that the issues addressed in wage & hour class action mediations are entirely economic. But the non-economic issues characteristically arise from the defense side, and tend to break down into two categories. The first category is the common "principled" resistance to a fairly rigid statutory scheme that typically strikes defendants as entirely inconsistent with the statutory purpose and with common sense. Specifically, those rationally thought to be managers cannot be treated as exempt in California if the time they spend in identified categories of non-exempt functions (e.g. sales) happens to take up more than half their time. The "player-manager" may be thought of as a manager, but there will be exposure if he is paid like a manager, and that fact is a hard-to-swallow surprise for many companies.
The Defendant's Need to Deter Future Claims
Then there is the second form of defendant resistance to otherwise attractive settlement opportunities. This one is born of a genuine dilemma: the company concludes it cannot "turn managers into foremen" without losing the critical work incentives or esprit-de-corps or "company culture" that it concludes comes with classifying class members as exempt; but to "buy off" the class action claim through settlement without also turning class members into non-exempt workers for the future would be to inspire, by that act, endless waves, every three or four years, of new wage and hour claims.
These claims would come from new employees who are not collaterally estopped or otherwise bound by the class action judgment supporting the settlement. It would also come from its current employees, class members, who have a basis to argue their release can only apply to past "wrongs," but cannot release the continuing "wrongs" that take place after the release is entered into. Such companies are sorely tested take their chances at trial to escape the dilemma. The prominence of that question is an unusual hallmark of wage & hour mediations. And much of the focus of mediations I have handled has involved finding creative solutions to this very dilemma.
The Absence of Integrative Bargaining Opportunities
While there is a need to find creative techniques to subdue extraordinary needs for deterrence that wage & hour defendants will often have, there is a curious absence of opportunity to employ another form of creativity - that of finding integrative (rather than purely distributive) resolutions to the dispute. With one obvious exception , the "Jack Sprat" non-monetary exchanges that are the special joy of mediators - where parties give what's cheap to get what's dear, and thereby optimize the likelihood, as well as the quality, of the resolution - are not to be found in this arena.
The reason is not that negotiators in this specialty are not creative, but simply that the inherent nature of class actions virtually eliminates any prospect that the form of any exchange will be anything other than money. Specifically, one stricture of class actions is that similarly situated class members be treated uniformly, and the only uniform needs the members will have is the presumptively universal need for money. As a result, the nature of class action bargaining is heavily distributive, not integrative.
The Absence of a Rich Body of Case Law to Support Risk-Based Claims Valuation Analysis
It is a bit of an irony that a field which is so tilted toward distributive bargaining is also one in which mediators are essentially deprived of a major tool used to facilitate such bargaining - a substantial body of actual outcomes at trial in analogous cases to provide a realistic assessment of the actual risk of trial, and therefore the reasonable settlement value of a release. Because the large volume of wage & hour class actions is historically new, and because so few that do exist go to trial, little such evidence of likely outcomes in fact exists.
What girds the negotiation in the absence of that evidence? It is four things. First, the statutory scheme in this area is fairly administrable, and results are arguably more predictable for this reason even in the absence of extensive actual results.
Second, there is an extensive and ever increasing body of evidence of actual class certification decisions, and the factors relevant to class certification decisions in wage & hour actions are more closely related to the ultimate issues at trial than they are in other actions (compare, for example, securities fraud class actions, where the class certification issues have almost nothing to do with the significant issues at trial).
Third, some narrowing of the range of potential settlement is achieved by the fact that extreme low ball offers typically are not made, even preliminarily, because both sides know (or can be reminded) that there is a certain threshold that will not survive a fairness hearing, nor sustain the plaintiff's counsels basic need to preserve reputation in the context of a settlement record that (unlike the settlement of individual claims) is always public.
Finally, and perhaps most importantly, parties tend to be guided by a kind of "market price" for these claims - settlements tend to fall within a fairly well defined band established by publicly available information of what other cases have settled for relative to the total potential exposure in the case.
What is notable is that, given the fairly strict and administrable standards of liability set forth in the statutes, the market price of the claims is probably materially below the amounts that a standard risk-based discounted claims valuation analysis would yield. This probably makes sense in light of the various incentives of the participants. Defendants need attractive offers (relative to exposure) to overcome both non-economic resistance factors as well as the lack of extensive palpable evidence of trial results. Defense counsel, paid hourly, have, if anything, an economic advantage to honor the client's resistance, as well as reputational and self-fulfillment benefits to keeping at least some quota of cases to try.
Plaintiffs' counsel, particularly specialists in demand, reach a certain threshold where the economically optimal course is to declare the offered amount to be enough and free up their time to fry another fish. And that threshold, in turn, need be no greater than a respectable outcome as compared only to the settlement market price itself. The Court, for its part, is institutionally loath to second-guess the norm, and institutionally dependant on most large cases settling in any event. Finally plaintiffs, themselves, are, for all practical purposes, absent from the process. They can opt out, and thereby preserve the right to bring claims on an individual basis, but the value of individual claims is rarely enough to warrant the transaction costs.
Role of the Mediator
It helps immensely for the mediator to have substantive familiarity with the rhythms and restrictions of class actions generally, and specific familiarity with the rights and duties of employers regarding wage and hour matters. That is the environment in which the mediator is applying his or her skills. But the mediator's primary contributions come from the use of more general "process skills" to anticipate, analyze and avert impasse in the negotiation process. Those skills are not unique to wage & hour mediations.
Some taste of the actual process of analyzing and averting impasse may be provided by an actual example of an email I sent to defendant's counsel to overcome an impasse in a wage & hour class action I was mediating. The text - attached as "Attachment 1" - has been left in its raw form, with one exception: all names appearing in the original have been made generic so as to fully protect confidentiality. The case settled shortly after the email was sent.
John (Jay) McCauley is a mediator who also serves as an arbitrator on the Complex Commercial Panel of the American Arbitration Association and an Adjunct Professor at the Straus Institute for Dispute Resolution at Pepperdine University School of Law. He is also a hearing officer for the ADR firm Judicate West.
It Pays refers to recent work done by Kellogg School of Management Professor Adam Galinsky, who has demonstrated (with colleagues William Maddux -- (INSEAD -- Debra Gilin -- St. Mary's U. -- and Judith White -- Dartmouth) that success in negotiations depends on focusing on the head and not the heart. In other words, it is better to take the perspective of negotiation opponents rather than to empathize with them. (You may remember Galinsky as the academic responsible for demonstrating that the person who makes the first offer will (nearly) always get the larger share of the delta between the two parties' "bottom lines." See Making the First Offer here).
Now Galinksy and friends inform us that we are far more likely to reach a negotiated resolution to a conflict if we use our heads rather than our hearts. As It Pays reports:
Perspective-taking, according to the study published in the April 2008 issue of Psychological Science, a publication of the Association for Psychological Science, involves understanding and anticipating an opponent's interests, thoughts, and likely behaviors, whereas empathy focuses mostly on sympathy and compassion for another.
"Perspective takers are able to step outside the constraints of their own immediate, biased frames of reference," wrote the authors. "Empathy, however, leads individuals to violate norms of equity and equality and to provide preferential treatments."
The researchers performed a total of three studies designed to assess the relationship between successful negotiations and perspective-taking and empathy tendencies. In two of the studies, the participants negotiated the sale of a gas station where a deal based solely on price was impossible: the seller's asking price was higher than the buyer's limit. However, both parties' underlying interests were compatible, and so creative deals were possible. In the first study, those participants who scored highly on the perspective-taking portion of a personality inventory were more likely to successfully reach a deal. In contrast, higher scores on empathy led dyads to be less successful at reaching a creative deal.
Why Enlightened Self-Interest Trumps Sympathy
Just when you were about to stereotype "negotiated resolutions" as commie-pinko limp-wristed new age aquarian left-of-liberal kum-by-ya marshmellow toaster solutions to the problems of (excuse me fellas) real men -- along comes new research once again demonstrating that negotiation requires hard heads rather than soft hearts.
Because our competitive natures ("I need my stuff to survive") will almost always trump our collaborative inclinations ("we need each other to survive"). If this weren't so, the world wouldn't be divided into its current "pie pieces" -- the first, second and third worlds for instance.
More particularly, because distributive non-interest based bargaining is all about getting "our share" of a fixed pie while interest-based or integrative negotiations require the parties to: (1) learn about and attempt to satisfy their bargaining partners' often non-apparent needs and desires; and, (2) to collaborate in an effort to find ways to satisfy those needs and desires in novel and creative ways, reaching an integrative agreement becomes much more likely than reaching a purely distributive one.