Fail to plan …

Most lawyers at mediation settlement meetings of money claims thoroughly prepare their cases.  They have been dealing with the it for months if not years and know it backwards. However, there is one thing many neglect to prepare and plan for -  how they are going to negotiate. A surprising number of mediation representatives turn up without a negotiation plan.

The content of your negotiation plan.

Your negotiation plan for a money claim needs to answer three simple questions:-

1. What will my starting offer be?
2. What is my walk away point?
3. How will I progress from offer to offer?

The starting offer.

The default starting point for many negotiators is the extreme end of their range of possible results – their best day in court figure. Some even like to start beyond that, at a figure that has no connection to their case analysis. The usual response from the other side is a figure at the extreme end of their range, that’s if they haven’t given the job up as hopeless.

Robert Cialdini’s excellent book Influence : The Psychology of Persuasion has a whole chapter on reciprocation. The basic idea being if you give something to another person their instinctive reaction is to give back. Experienced negotiators know that to encourage the other side to move you need to influence them – making an offer above the bottom end of your range does that. I know it is counter-intuitive and difficult to do. Negotiators feel they are losing out by not starting at their base line. But in reality there is no chance that you are going to settle anywhere near that number so you are not losing anything.

Your walk away point.

It is a rare case indeed that you simply must settle at any price. Assuming you have the fall back option of litigation then you should know where to draw the line, pack your bags and go home. This should be discussed with the client beforehand and may need to be reviewed in light of facts learned during the mediation. But without this compass you are surrendering control of the outcome.

How to progress from offer to offer.

Again, the default position of many negotiators is to react to the last offer from the other side. If they have only moved a little we will only move a little. It is a natural but ineffective response and often leads to the parties giving up without knowing the true extent of any gap between them. I will follow this post up in the next few weeks with a discussion on this topic and what analysis you need to do when making your plan.

I must acknowledge the work of J. Anderson Little and his book Making Money Talk, a book written for mediators but highly recommended for anybody negotiating money claims.

I think Diane Levin, author of the excellent Mediation Channel, has a point when she says “The problem though is that all too often attorneys and mediators view each other as rivals, not partners, in dispute resolution. There’s plenty of mutual distrust and even open hostility to go around.”

Diane poses and answers two questions, what can lawyers do for mediators and what can mediators do for lawyers. They are great posts and well worth a read for both lawyers and mediators. Imagine the potential if the lawyers and the mediator regarded themselves as partners in dispute resolution!

I like this quote “Here’s where a mediator can help. The best mediators are negotiation experts who understand how to turn the parties into more effective negotiators. Mediation is not about holding hands and singing “Kumbaya”. It’s about getting your interests met and maximizing your gain–yours and the other side’s.”

Recommended.

Charon QC is a fictional silk with a fondness for grape based beverages. His recent podcast features Los Angeles  mediator Victoria Pynchon of IP ADR. In an interesting discussion Victoria describes elements of her commercial mediator role as:-

• helping lawyers negotiate settlement of litigation;
• helping lawyers save face with their clients;
• re-translating the legal story back to the actual factual conflict
• getting clients and lawyers back onto the same page – the lawyer typically being focused on the legal cause of action, something the client may not actually understand.
• getting business solutions. Lawyers are often focused on a single remedy (say compensation) when in fact there are many items of differing value which the parties can exchange in settlement.

She describes generating commercial solutions as one of her prime roles in mediation. It often strikes me in a mediation how “the law” frequently makes way for commercial deals. Parties usually want to get on with whatever it is they do, the dispute resolved and out of the way. To do that they are prepared to substitute a commercial approach in place of achieving a strict “legal” resolution of the conflict.

Victoria introduces me to an idea I hadn’t heard of which social psychologists call “autistic hostility“. The idea is that parties to the dispute have feelings towards their opponent that range from “peeved” to “enraged” and as a result they cut off communications. The first thing the lawyer says is don’t talk to the other side (guilty as charged!) which re-enforces the barrier. Any information received from the opponent is then filtered through this state of outrage at the opponent. So the mediator has to recognise this and re-open the communication, a pre-requisite for negotiation.