Negotiation preparation includes thinking about differences in a different way: Differences are good! They can be traded. They rarely have equal value to both sides. An issue might have less priority to you and a greater priority to the other side. Consider logrolling to exploit your differences.
As lawyers, most of us think of the differing viewpoints of each side as impediments to settlement. After all, if the other side views the case exactly as we do, mediation would be unnecessary. Rather than thinking of differences as obstacles to overcome, try looking at them as opportunities to exploit.
People care about the issues in a mediation. But here’s an important point: their passion is not equal on every issue. If there is an issue that they are passionate about and you are not, conceding that issue to them creates an opportunity for you to gain a concession on an issue you are passionate about.
Prepare for your next negotiation by thinking of the differing points of view you and the other side have. These could be differences in priorities, risk evaluation, time preferences or expectations about the future. The other side might be more risk adverse than you. The timing of settlement payments may be important to one side, but not to the other. What will happen in the future may look different to the parties. Consider questions to ask at the mediation that could ferret out these differences.
If you think about all of the issues ahead of time, you can make an educated guess about the other side’s passions. At a mediation joint session, or in caucus with the mediator, you can test your hypotheses. Logrolling your differences can help you avoid impasse at mediation.
Malhotra and Bazerman in Negotiation Genius have a terrific explanation of this strategy.
We’ve all spent weeks on trial preparation. If mediation (or other ADR) is going to resolve most cases (only 98% to 99.5% of cases go to trial in some studies), we should consider matching the disciplined approach we take to preparing for trial to mediation preparation.
As a first step, take some time to think about your last mediation. Make a list of what worked and what didn’t work. Consider these questions:
1. Did I select the right mediator for the case?
Cases are different. Mediators are different. Decide which mediator attribute is most likely to enhance client satisfaction and settle your case, e.g., subject matter competency v. creativity v. the usefulness of your client’s or the other side’s client’s feeling heard and respected.
2. Did I evaluate my BATNA (Best Alternative to a Negotiated Agreement)?
Did I evaluate the other side’s BATNA?
3. Did I accurately calculate the Zone of Possible Agreement? If not, why not?
4. Did I take full advantage of the joint session?
This is your opportunity to hear directly from and speak directly to the client on the other side.
5. Did I have an effective game plan?
Deciding whether to make the first offer, where to go next, and where you want to end up are as important as trying to analyze where the other side’s ballpark is. Bill Walsh, the legendary 49’ers coach, scripted the first 25 plays. Did you script your negotiation moves ahead of time?
6. Was I surprised by the other side’s posturing, facts or legal arguments, or was I ready for them?
7. Did I work to create value?
8. Given the negotiations and the outcome, was my client adequately prepared? Satisfied?
I recommend starting a file and writing this information down. Keep track of each mediation. What worked? What didn’t? Then review the file prior as part of your mediation preparation for your next mediation.
I had the great pleasure of spending two days earlier this year with Ken Cloke, an internationally acclaimed mediator and author, and a treasured mentor. Ken and Joan Goldsmith wrote Resolving Conflicts at Work some time ago and have recently updated it. There are gems of wisdom in this book that you can use as negotiation strategies or when you are at impasse in mediation.
Their take on conflict is that by moving into it, instead of away from it, you will learn more about yourself and the person you are having the conflict with, by discovering their, and your, needs and interests. This allows you and the other person to:
- Acknowledge what you have in common
- Clarify and resolve the issues dividing you
- Devise creative solutions
- Collaboratively negotiate differences
- Identify and resolve the underlying reasons for the dispute
- Learn from each other and the conflict
- Strengthen and revitalize the relationship
They point out that we spend so much time on our conflicts at work. (I know I do: thinking about them, talking to other people about them, and worrying about them.) Instead, they ask, why not invest that time in working on your own personal and organizational growth, learning, skills and effectiveness?
Here are their ten strategies that can lead you from impasse to resolution:
- Understand the culture and dynamic of conflict
- Listen empathetically and responsively
- Search beneath the surface for hidden meanings
- Acknowledge and reframe emotions
- Separate what matters from what gets in the way
- Solve problems paradoxically and creatively
- Learn from difficult behaviors
- Lead and coach for transformation
- Explore resistance and negotiate collaboratively
- Mediate and design systems for prevention
Add this book to your list. It will help you negotiate life’s ups and downs, at work and everywhere else.
Here’s a proven negotiation tip that most people don’t think of, or at least don’t think of first. I think it’s not used more frequently because it’s a little counter-intuitive.
When we get stuck in conflict, whether in civil litigation mediation or divorce mediation or conflicts in the workplace, we tend to let the conflict make us pessimistic about its eventual resolution, which makes us feel more stuck, and the more we feel stuck the more we feel frustrated, and the more we feel frustrated, the more we come to disrespect, or even demonize, the other side. Once we’ve gotten to that point, about the last thing we want to do is show that we respect the other side.
Stuart Diamond, negotiation professor at The Wharton School, and author of Getting More, has studied irrationality in negotiation. He points out:
“When people are irrational, they are emotional. When they are emotional, they can’t listen. When they can’t listen, they can’t be persuaded. So your words are useless, especially those arguments intended for rational or reasonable people.”
Emotion “reduces people’s information processing ability….[E]motional people, studies show, care less about getting a deal that meets their needs than about hurting the other party.”
Diamond recommends making “emotional payments” to the other side:
“You need to tap into the other person’s emotional psyche with empathy, apologies if necessary, by valuing them and offering other things to get them to think more clearly.”
To cut down on the other side’s acting irrationally, he suggests offering:
- A statement of the other person’s value
The value of emotional payments is that it will calm down the other side, they will be able to think more clearly, and they will be better able to listen to you. Then the stage is set for you to persuade. Of course, the earlier you start showing respect for the other side, the less likely they will become irrational and that you will be facing impasse in mediation or negotation.
Emotion in negotiation is always a factor. The other party’s emotions. The other attorney’s emotions. Your client’s emotions. Your emotions. Planning for emotion should be part of your mediation preparation. We’re all human. Their emotions or our emotions can unintentionally lead to impasse in mediation.
Harvard Business School professor Michael Wheeler has been studying emotion in negotiation. The Harvard Program on Negotiation (PON) has scheduled a webinar with Professor Wheeler for May 10, 2012, entitled Steps to Understanding and Effectively Using Emotions in Negotiations.
Here’s a preview of key points from PON:
"1. Balance. Successful negotiators are calm but alert. Patient and proactive. Creative, yet firmly grounded. Maintaining those feelings and attitudes in proper proportion is just as important as mastering the substance of the negotiation.
2. Attunement. Getting in synch with counterparts is essential. If they are defensive and hostile, everyone is dragged down.
3. Influence. Emotions are contagious. When we bring anxiety to the bargaining table, others sense it. Conveying optimism is in our interest.
4. Resilience. Self-awareness is key: We need to know our own hot buttons and how to recover when others push them.
5. Satisfaction. Knowing what we want to feel at the end of negotiation helps us to get there."
I've had the pleasure of hearing Professor Wheeler speak. You can sign up for the webinar here.
(Emotion, the-elephant-in-the-room. I'm re-using the photograph. Photoshopped it myself!)
A persuasion case study from my trial files.
A young man was diagnosed with Type II juvenile diabetes in his teens. Despite countless admonitions from physicians, dieticians and nurses, he was non-compliant with his diet.
In his twenties, he did something illegal (I can’t remember what) and was jailed. In the jail, a family physician diagnosed diabetic retinopathy for the first time. Plaintiff contended that the physician committed malpractice for not diagnosing it sooner (even though plaintiff had been followed by an ophthalmologist). I represented the company that placed the physician.
The jail kept records of all the snack food that plaintiff bought at the jail’s commissary during the six months he was incarcerated. Plaintiff bought a lot: moon pies, pork rings, top ramen, Kit Kats, Hershey bars, you name it. I put the commissary records into evidence. At the suggestion of a co-defendant, I decided to show, not tell, the jury what plaintiff had bought. The argument went to plaintiff’s contributory negligence.
My closing argument was scheduled for a Monday. I sent my paralegal out to buy every single item on plaintiff’s commissary list. It took him all weekend, as he had to go to multiple stores to purchase everything on the list. The junk food was mounded on my kitchen table. I decided the jury needed to see it in a familiar container. I had an oversized, lattice-worked laundry basket. Perfect. The jury could see the junk food through the plastic lattice work and there was so much food I could mound it on the top.
During closing argument, I put the basket mounded with junk food on a table in front of the jury. (I even staggered, unintentionally, under its weight.) I was watching a young juror in the front row who was studying to be a nutritionist. This marked the first time I actually saw someone’s eyes grow as big as saucers.
I could have reminded the jury in closing to review the commissary records, which had been marked as an exhibit. Instead, I showed them what they represented.
When you negotiate, think of ways to show what you mean. It’s a persuasive way to make your point. Try it at your next mediation.
An important component in preparing your clients for mediation is evaluating the case value for settlement. For your clients to be able to make informed decisions about settlement figures proposed by the other side, they will need to know what to compare them against. Otherwise, they are making decisions in a vacuum.
In my law practice, I used the following simple formula when advising my clients:
Multiply the expected jury award by the percentage chance of losing (for defendants) or winning (for plaintiffs) at trial. For instance, if I represented the defendant and I thought that if the plaintiff prevailed at trial, the jury would award him between $600,000 and $700,000, and that my client had a 20% chance of losing, then the settlement value of that case is between $120,000 and $140,000. If I represented the plaintiff, I would multiply the expected jury award by the chance of success at trial and subtract the additional litigation costs between the mediation and the end of trial. For instance, if the expected jury award were between $600,000 and $700,000, and my client had an 80% chance of winning, then the settlement value of the case is between $480,000 and $560,000, minus the $60,000 in prospective costs and expert fees between the mediation and the end of trial, for a settlement range between $420,000 and $500,000.
Robert Mnookin, the director of the Harvard Negotiation Research Project and a law professor at Harvard, has a more refined analysis in his book, Beyond Winning.
He calculates the expected outcome times the chance of success at trial on each issue that will bear on the outcome. This inevitably creates a more realistic number, and for plaintiffs he includes a calculation of the time value of money.
Every jury trial contains uncertainties: in how the judge applies the law, in how the facts come in, in how well the experts will testify, in how well the other side’s lawyer tries the case, in how the jury will react, etc. Factoring in these risks in an objective, quantifiable way is helpful in understanding the settlement value of a case. Once you have this number, you can plan your negotiation strategy.
Harvard Business School professors Deepak Malhotra and Max Bazerman wrote one of my favorite negotiation books: Negotiation Genius. There are many powerful negotiation strategies in this book. They also point out seven common mistakes that negotiators make:
“1. You made the first offer when you were not in a strong position to do so.
2. You made a first offer that was not sufficiently aggressive.
3. You talked but did not listen.
4. You tried to influence the other party but did not try to learn from them.
5. You did not challenge your assumptions about the other party.
6. You miscalculated the ZOPA (zone of possible agreement) and did not re-evaluate it during the negotiation.
7. You made greater concessions than the other party did.”
Three additional mistakes I’ve seen as a mediator are:
8. You did not prepare sufficiently for the mediation, so you didn’t have all the information you needed to settle the case.
9. You did not prepare a concession strategy.
10. You let your emotions dictate your moves, so that you were reactive instead of proactive.
It’s an interesting list. The mistakes cover every phase of a negotiation, from insufficient preparation, to where to start the negotiation, to information gathering, to inflexibility, to concession strategies, to emotion (the elephant in the room). As a lawyer, I’ve made all of these mistakes at one time or another. You can improve your mediated outcomes and mediation skills by avoiding these mistakes.
What would you add to this list?
J. Anderson Little, a North Carolina mediator with 20 years of experience in civil litigation mediation, has written a terrific book on mediation called Making Money Talk: How to Mediate Insured Claims and Other Monetary Disputes.
Initially Andy introduces the reader to a typical rear-ender case. After 12 rounds of proposals, the parties settled.
“At the end, the participants signed the agreement, wrote their checks, said their good-byes, and went their separate ways. Their interaction was courteous but stiff. Although an agreement had been reached at mediation, no one was particularly happy with the settlement or the difficulty with which it was reached.”
“This was a once-in-a-lifetime experience for [plaintiff]. He would not have an opportunity to see or speak with the people on the defendant’s team again…. “
“The members of the defense team were professionals. For them, this was just one more automobile accident, one more claim, and one more negotiation.”
This captures the essence of personal injury litigation mediations. Andy argues that facilitative mediators can play a productive role in these types of “one-off” cases where it's likely the parties will not see each other again.
“In the position-based bargaining that goes on in a civil trial court mediation, the mediator’s chief aim is to help the parties overcome their reactivity, refrain from stopping prematurely in reaction to the other side’s proposals or in reaction to their own pessimism about the prospects of settlement, make thoughtful rather than reactive proposals, and continue moving through ranges until they reach their best numbers or are sure that their best numbers will not settle the case.”
Andy outlines a method to help hard bargaining lawyers or their clients get out of their own way so their case can settle.
This is not just a book for mediators. It’s a book for every lawyer involved in civil litigation mediation. Gain insights into negotiation strategies that can improve your mediated outcomes. Since less than 2% of cases go to trial, the acquisition of mediation skills can help you shine as a lawyer.
Check out the little boy’s face.
Remember when you were a little kid listening to stories? They can be mesmerizing. Even for adults, for there is a child in each of us. Somewhere.
Lawyers who try cases know that telling stories in opening statements and closing arguments is a compelling and persuasive way to influence juries. As Annette Simons in The Story Factor puts it, when you are trying to influence a group, giving them more facts is just piling on more facts. Jurors likely have more facts than they can process well. She suggests:
“They don’t need more facts. They need help finding their wisdom. . . . A storywill help them figure out what all the facts mean.”
As the best trial lawyers know, when you let jurors access their own wisdom to reach their own conclusions, they are more likely to own that opinion than when you tell them what their opinion should be.
Why not use the same process during mediation? At times, mediations digress into a tug-of-war between the egos of opposing counsel and/or opposing parties. Storytelling has the ability of making a point without setting off an ego war. Ease them out of their point of view.
Again from Simmons:
“You don’t have to convince people that they are wrong to influence them. . . . Letyour listener’s ego sleep. Concentrate instead on providing a visceral experience ofa new story where new choices make more sense. Don’t back someone into a corner. . . .Lead their conscious and subconscious minds on a tour of a different point of view. . . .Intrigue and activate their imagination.”
And finally, she asks, “Which is more important to you—being right or influencing others?”
If you are interested in the power of storytelling, check out The Story Factor. Its subtitle is “Inspiration, Influence and Persuasion through the Art of Storytelling.