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Victoria Pynchon

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She Negotiates

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The Five Most Effective Ways to Break Negotiation Impasse: Part II

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.

Professor Leigh Thompson of the Kellogg School of Management at Northwestern University has written that in controlled experiments, only seven percent of all negotiators ask diagnostic questions when to do so would dramatically improve the outcome of the negotiation.  

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.

Rainer Maria Rilke, Letters to a Young Poet.

Comments (3)

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michael webster - August 22, 2009 12:21 AM

Vickie;

I like this, but I think that you have overemphasized the story telling.

Big fan of diagnostic questions, but for me it is a way of situating where we are on the decision tree.

Settled a motion several days ago when I kept pushing counsel about where we really were on the decision tree.

Gavin Craig - August 22, 2009 8:18 AM

Great article. Thanks. I am in the middle of a very difficult mediation that is continuing. I represent one of the parties. The attorneys get along very well but the parties do not. This type of approach might help.

Vickie - August 22, 2009 11:03 AM

Thanks Gavin and Michael for dropping by.

As always, Michael, your approach to the settlement of litigation is highly rational. As my friend the rocket scientist next door (yes, he's a real rocket scientist, putting satellite systems up into orbit for Boeing) "you're applying logic and reason to a problem others are not."

Aside from the emotional forces that cause people to stray from the decision tree, there are also non-decision tree interests that affect the settlement of litigation for people who are not applying logic and reason as rigorously as you are.

Some of my stories (the mobile home buyer's remorse case, for instance) concern diagnostic questions that reveal the weakness of one's own way of framing the factual issues pertinent to the litigation and hence on the decision tree.

Other stories (the reason why the Plaintiff would not budge from its hard bottom line because of a "most favorable nation" agreement) illustrate cases in which a party was convinced that the last, best and final offer was not a bluff (not an issue on the decision tree but a factor in "at the table" negotiation tactics).

I'm a firm believer in decision trees and their ability to make an uncertain future (what's the probable cost of victory; the probable chances of loss; the probable award) more certain. Alas, we deal with predictably irrational people at every decision point on the tree -- the judge; opposing counsel; the clients; the jury; the arbitrator; and, yes, the mediator.

That's why what we do is as much an art as a science, no?

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