dougnoll’s posthaven

Segment 1: Friedman Mediation. Our guest on this edition of The Doug Noll Show is Bruce Friedman. Bruce is a former partner at Bingham McCutchen, LLP, has more than 37 years of complex litigation experience in the insurance, financial services and products, and class action areas. He is also the founder of Friedman Mediation (http://friedmanmediation.com/). Bruce has been a practicing trial lawyer for many years, but found that his greatest satisfaction was in evaluating cases and trying to resolve them as quickly as possible for his clients. Mediation allows him to exhibit his natural ability to analyze legal issues as well as resolve matters in a timely manner.

Segment 2: Legal Negotiation. Doug and Bruce are both amazed by how little trial lawyers – even sophisticated and very experienced lawyers – actually know about legal negotiation. Generally speaking, they usually don’t understand the process and do not come to the session with a written concession agreement. Bruce has found the initial offer is often a shock, and it takes a long time for the parties to “get real” about what needs to happen in a mediation session.

Segment 3: Constructive Conversation and Creative Thinking. If a young lawyer came to Bruce and said he or she wanted to learn about working with a mediator, Bruce would first tell them to take classes to learn about the process. He would also stress that they should know their case, be prepared to discuss the case in a reasonable manner with the mediator, and be creative to find solutions to the case.  

Bruce reminds us that clients can win in mediation. They can win in the sense that they can sometimes get a better settlement in mediation then they would in a trial. Additionally, it’s an opportunity for the lawyers to engage in a much more constructive conversation than they generally get to do in the context of litigation, and to offer some very creative and out-of-the box thinking that is not allowed in court.

Segment 4: Take Advantage of the Mediation. Bruce is seeing a trend these days to cut expenses by settling cases and not incurring additional expenses by furthering the case and taking it to trial. There is an effort to cut legal budgets within corporations as well. He is also finding people are willing to mediate earlier rather than later. He doesn’t think experienced lawyers appreciate how important it is to try to get closure at mediation. They need to really take advantage of the mediation process. Having all parties present and available to speak with each other is not likely to happen in court, or ever again.

To listen to the entire interview:

Segment 1

Segment 2

Segment 3

Segment 4

The job of the lawyer is to not only manage the negotiation so that the best possible outcome can be obtained, but also to help the client overcome the inherent distortions of the human brain so that decisional error is minimized. This is what I mean by cognitive counseling.
Some lawyers shy away from this idea saying that they are not therapists. I think it is important to understand that were not talking about therapy. Therapy involves diagnosis, prescription, and prognosis with the goal of healing injury. Cognitive counseling is more like coaching to help clients make good decisions.

The first step in cognitive counseling is to recognize decisional errors. This will take some practice, but armed with the information he received from you so far, you can see that any type of emotional reaction is potentially the cause of decisional error.

In addition to calling out decisional errors, you can slow the process down. Sometimes getting outside and walking around for a while is a useful way of getting some cognitive rest. Do not allow the process to accelerate so quickly that your client becomes overwhelmed emotionally or cognitively. Frequently, clients will leap ahead to find objections why a certain decision should not be made. As a cognitive counselor, try to maintain the decision-making one step at a time and bring your client back when he or she leaps forward.

In these situations, you will have to make an empathic connection with your client by listening, reading his or her emotional data field, summarizing the essence of what your client is saying, and labeling his or her emotional experience. When your client seems overwhelmed, have your client focus on what is really important. Most lawsuits are not life-changing. Therefore, you can ask questions about what life will look like five and 10 years ahead. Helping your client gain perspective on what is really important can be of crucial importance during the heat of a negotiation.

As I have repeatedly said, take good notes and be sure to memorialize your conversations with your client in a follow-up letter. The problem of the under settled case is growing as negotiation and mediation becomes more of a mainline practice. You will need to keep your client in line by making a written history of what happened.

Cognitive counseling is an iterative process, which means that you will repeat the same things over and over again. Sometimes it will seem like you are spinning your wheels. However, it is your repetition, patience, compassion, and understanding that will be the greatest service to your client. Your client will not remember your brilliant legal analysis. She will remember how you treated her and a very difficult and extreme moment of her life.

Remember, the best way to win the game is to call it yourself.

Spouses and business partners can easily be forgotten about. It is your job to make sure that they are fully informed, consistent with protecting attorney-client privilege. At the very least, you must inform your client to keep influencers up-to-date on case developments and the negotiation strategy. Again, a letter outlining all of this can be an important protection for you.

Who will be present during the negotiation? Generally speaking, you want all of the decision-makers at the negotiation if the negotiation is in the form of mediation or some other group conference. Sometimes, for strategic or tactical reasons, certain decision-makers might not be physically present. They should be available close by or available by telephone or Skype for consultation as a negotiation unfolds.

Who will have to be present to make a settlement agreement binding? Settlement agreements made during mediation are not binding unless all of the parties have signed the settlement agreement. Therefore, you must take great care to make sure that you know who will have to be present to bind everyone to a deal.

What will be the role of the client during the negotiation? This one is overlooked all the time. Most of the time, you want your client to be an active participant in the negotiation. Sometimes your client will take the lead; sometimes you will take the lead. This should be discussed ahead of time so that there is no confusion over roles during negotiations.

Another related problem has to do with personal accountability. Very few people have the courage to take personal responsibility for their actions. Many times, people will come to lawyers, hoping to shift responsibility for their actions away from themselves. In negotiation, clients are often confronted with the need to take personal responsibility for their actions for the first time. This can be a difficult pill to swallow. A conversation about personal accountability well before negotiation begins is therefore a good idea.

Some clients can become very emotional, often with ample justification. I will give you more information about emotions in the context of decision-making later on. However, recognize that all human beings are 98% emotional and 2% rational. Conflict and stress tend to shut down the prefrontal cortex and activate the emotional centers of the brain. Be prepared to deal with your client’s emotions.

Remember, the best way to win the game is to call it yourself.

Remember, the best way to win the game is to call it yourself.

In this post, we are going to look at the two fundamental forms of negotiation.

The first form of negotiation, and the one that is most familiar to lawyers, is called distributive negotiation. In distributive negotiation, the parties are negotiating how to divide or redistribute things. Thus, in a lawsuit, negotiation is often about how much money the defendant will pay the plaintiff for the case to go away. This type of negotiation is called distributive because value is being distributed from one party to another.

The second form of negotiation is called integrative negotiation. In integrative negotiation, the parties are looking for ways to expand their options and create value. In contrast to distributive negotiation, integrative bargaining involves problem-solving and value enhancement. An example of integrative negotiation might occur in a lawsuit involving two businesses over breach of contract. While the parties might negotiate for a fixed payment to settle the claim, they might also find a way to expand, and renew, their business relationship so that both sides benefit from the negotiation.

Sometimes you hear the terms zero-sum and win-win. These are important terms to understand in negotiation and are often misused because they are misunderstood.

In a zero-sum situation, the only way that I can gain is if you lose. In other words, there is no way for both of us to come out ahead or be winners. This is the pure definition of competition because in competition, there can only be one winner.

Distributive negotiation is often viewed as a solution to a zero-sum problem. But a zero-sum problem confronts us with a fundamental strategic problem in negotiation. You might have already come across this and wondered about it.

The dilemma is “Do I compete and play hardball?”or “Do I cooperate?”

The problem is this:

If I am too competitive, I will blow a chance for settlement.
But if I am too cooperative, I might give up too much.

This is the fundamental dilemma facing every negotiator.
 
How do I avoid impasse, but not give up everything to get a deal?

Sometimes, a highly cooperative approach, such as integrative negotiation can foster a deal. Other times, a more competitive approach, such as distributive negotiation, is more effective.

The takeaway is that the nature of the problem dictates the negotiation process to be used. As long as the conflict remains centered on things and is not too emotional, distributive negotiation and evaluative mediation will tend to work. However, distributive negotiation is not efficient or effective at high levels of conflict or when emotions are in play. In these kinds of disputes, either traditional or facilitative mediation is often needed to de-escalate the emotions before there can be distributive bargaining. It is important for you to remember these two principles:

•    As long as the conflict remains emotional, integrative negotiation processes are effective and efficient.
•    Integrative negotiation is not efficient or effective at low levels of escalation or when things are solely in play.

You should not be surprised to know that most negotiations involve emotions and most negotiations involve things. Therefore, you must be skilled at both integrative and distributive negotiation. You must also be comfortable with evaluative, traditional, and facilitative mediation processes because a good mediator will use all three in a given process.

Remember, the best way to win the game is to call it yourself.
Better still, change the game completely.

Douglas E. Noll
Mediator, Author, and
California Lawyer 2012 Attorney of the Year
for Pro Bono Service
Creator of Negotiation Mastery for the Legal Pro –
A new online course in cutting-edge legal negotiation
legalpronegotiator.com

 

After a year of development, I have finally launched my new on-line course, Negotiation Mastery for the Legal Pro. This course, designed primarily for young lawyers, but suitable for anyone wanting to learn the subtleties and nuances of distributive negotiation, is 9 hours long. It consists of an e-Book 45 video lectures, and downloadable templates and files. For California attorneys, it is MCLE-approved for 9 hours, including 2 hours of ethics and 1 hour of elimination of bias.

I built this course because, as a mediator and peacemaker, I saw a need for stronger negotiation skills. The mind-set of the negotiator is very different from the mind-set of a trial lawyer. Shifting from from one mode to the other is difficult for most attorneys. The need for comprehensive training, with the convenience of the Internet, led me to create the course.

I answer the age-old question of, How do I balance my need to get the most out of this negotiation with the need to cooperate to get a deal? If I am too competitive, I will blow the negotiation. But, if I am too cooperative, I might give up too much, or worse, be exploited.

Negotiation is a strategic communication designed to settle disputes and make deals. Zealous adovcacy won't work very well in this environment because there are no rules, no referees, and no boundaries constraining the negotiators. If lawyers take off on the hard-core trial lawyer approach, they might find themselves out of a good deal because they have been overly-competitive.

I shatter the myth that the anchoring effect dictates an unreasonably high or low opening move. Total rubbish, and I explain why.

Negotiation is not an exercise in rationality. It is deeply influenced by our emotional states moment to moment. Careful preparation, however, can reduce the stress, anxiety, and frustration of any negotiation. Calm execution will almost always lead to superior outcomes.

So, if you want to know how a young lawyer settled his first big case for $5.5 million using these skills, check out Negotiation Mastery for the Legal Pro.