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Getting Your Opponent to the Bargaining Table without Appearing Weak

Transparency Will Eliminate Unnecessary Wariness Between Parties (.pdf)

from the April 1, 2009 Daily Journal

 
 

FORUM COLUMN

By Victoria Pynchon

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."

Pause.

"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.

For the remainder of the article, click here.

Comments (5)

Read through and enter the discussion by using the form at the end
Deborah Rothman - April 2, 2009 3:41 AM

Superb, as usual. Vickie, your observations and writing are sharp, informative and always entertaining. I don't know where you find the time, energy, inspiration and talent--I'm so jealous!!

Gavin Craig - April 2, 2009 9:45 AM

Another great post. I think there are two common misconceptions in the world of business. The first is that you have a weak position if you are the first to suggest settlement. While some people will think that way - ultimately I have never seen a result differ because one party thought the other side's position was weak because they were the first to initiated settlement talks. In the end people negotiate on the merits, the costs, and the risks. Sometimes obsessively. And in business, the facts many times do not mean as much as the dollars, and the justification for any payment.

The second misconception is that when a company makes a decision on a matter it creates a precedent. I think the fear of creating a precedent is usually an excuse to avoid making a decision. Precedent is a highly overrated concept. Every case settles or is decided or settled on its merits and the economic realities of the case. Settlement means compromise.

I don't hesitate to be the first to suggest a settlement process on behalf of my client - so long as the client agrees. I find some firms want to continue the litigation and discovery process, so we get to a settlement process at a later time. But, we usually get there.

Gavin Craig

Vickie - April 2, 2009 6:03 PM

Deborah and Gavin,

Thanks to both of you for dropping by and leaving comments. It IS true that people negotiate on the merits but I recall having many discussions with the client about their timing: before or after a summary judgment motion for instance -- "because we don't want our opponent to think we don't have the confidence that we'll win." Maybe things have changed significantly since I left practice five years ago. (could it POSSIBLY be that long??) Hopefully, the entire bar is now familiar with interest-based negotiations and understands that litigation is "just a business negotiation being conducted in the courts."

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