(Please note that the views expressed in this article are written as my own views to provide guidance for defense counsel, and do not in any way, reflect those views of Western World Insurance Company, Validus Specialty, or AIG.)
Whether you are in a face to face negotiation or a negotiation through mediation, you will have one thing in common with your opposition: you both want to do a deal. Even if one party thinks that the negotiation will be a complete waste of time, they want to do a deal, but they believe that the opposing party will not take a realistic view of the case. On the other end of the spectrum, in the rare case of a very easy negotiation, all parties may be very agreeable and have very little to negotiate.
Most negotiations fall in a huge middle ground. Each party has a goal where they want to end up at the end of the negotiation. Some negotiators have a range of where they want to go. The number or the range may be based on similar cases they have handled. It may be based on other factors: the desire of a client to settle, the lack of desire to do battle in a heated and contested litigation, the cost of the litigation, or knowledge of a bad witness or damaging evidence that may later come up in a case.
In many of these negotiations, one side finds out or decides from the initial back and forth that the goal that they had set at the beginning of the negotiation will become impossible to achieve. Because of what has been said in the first go-arounds of the negotiation, the negotiator knows that the goal that he or she had set is completely “out the window.” Yet, the negotiator does not walk away and instead continues to negotiate in a new range – the one that had been set by the other side.
In a majority of negotiations, this shift toward one party’s goal happens because one party took power by the choice of words that were used. One party took power by the mannerisms – the body language, or the tone. One party was more certain. The other party was tentative. One party successfully identified “negotiation shifters” to get the opposing side to give up on their goal for the negotiation.
Arguments Do Not Work
The biggest difference is that while one side negotiating would argue and argue till they are blue in the face and completely frustrated, the other side calmly stated a position. I am reminded of the days when I played raquetball. I was a very bad player. I would play against people way worse in their physical condition. I would get a good workout running all around the court. My opponent would stand still and calmly place the ball where I couldn’t reach it. I got killed in raquetball.
Arguments rarely work in a negotiation. Whatever argument you can come up with, I can come up with a counter-argument. We can volley back and forth with our arguments, and at the end of the day, it may look like an excellent tennis match, but neither side will score many points.
Arguments do not have the same weight as facts. The more you argue a point, the more power you lose in a negotiation. However, the same arguments can be stated factually. You then can take an additional step of identifying the conclusion you reach because of this fact you have presented.
Making argument after argument is what I call the “micro” approach to negotiation. You are just looking at the case in front of you, and the entire discussion revolves solely around the facts of the case.
While having a “micro” approach is necessary (since you need to know the case you are negotiating about), you can be the racquetball player staying in one spot if you also adopt the “macro” approach. The “macro” approach means that you take into consideration the fact that this case is similar to many other cases you have handled, and the position you have in this case is consistent with the position and the result you had in prior cases. “When I have “x”, I do “y”. This is not an argument. You are now stating fact.
Here’s an illustration of how one fact can be made into argument, and the same fact and conclusion method can lead to a different outcome. In one scenario, one party is arguing, and the other side states facts and positions, and then we reverse it:
The negotiation here is over a slip and fall claim. There were no witnesses to the fall. Further, the plaintiff did not seek medical treatment until two weeks after the fall occurred.
Here’s a negotiation that occurs when the defense tries to argue those facts, and the plaintiff’s attorney states facts and positions:
- I will make you an offer of $15,000.
P. Well, that is unacceptable. I have a client with a sever stress fracture and medicals of $50,000. You will need to get into six figures!!
D. That’s crazy. Your client has no witnesses, and didn’t even see a doctor for two weeks after the accident!!
P. Look. I have a client who is a very sweet lady. A jury will love her. I will get my doctor to testify that it is the result of the fall. I will have pictures of the sidewalk that was in disrepair, and I have my medicals. Given what I have, I will need something in the six figures.
D. How about if I offered you $50,000?
Now, we reverse the negotiation. The defense side will state the facts and position:
D. I will make you an offer of $15,000.
P. That’s not even in the ballpark!! My demand to settle is $250,000. I have $50,000 in medicals here!! You have to get me something better than that!!
D. The problem here is that your client did not have any witnesses, and did not seek medical treatment until two weeks after the fall. We have lots of these cases, and the value you have put on this case is probably in the range of cases where we have witnesses, and there was immediate medical treatment. Without those two factors in play the case has a lower value.
P. Well, can you get me $100,000. My lady is a very sweet lady!! She’s in bad financial shape.
D. Unfortunately, you are describing a case I have had many times before. With these facts, it does not have the value you have put on this. The best we can do here is $25,000.
In the first dialogue, the defense side was making valid arguments. However, no matter how valid an argument may appear, it leaves an opening for the other side with facts and conclusions drawn from those facts. The plaintiff’s attorney took power.
With the first situation, the response could have even been: “Quite frankly, I am not worried about that.” “I don’t care.” If you put out your best argument and that does not concern the opposing side one teensy bit, where does that leave you? Stating the facts as an argument gives the opposing side the opportunity to take power in the negotiation.
More importantly, once power is taken in this manner, it is hard to take it back. One side made a very valid argument. But if the other side just dismisses the argument, and provides a reason why it is being dismissed, you can’t just go back and make the same argument. This is where a lot frustration sets in with negotiators.
The frustration is based on the reason why arguments generally do not work. They are anticipated. The opposing side already considered this argument in their own evaluation. If you are simply conveying something that is expected and they already know, how effective can you expect the argument to be?
Threats and Scare Tactics As Opportunities to Take Power
There are numerous pronouncements that can be made in a negotiation that suggest an attempt at taking power. “It will cost you a lot to litigate this matter.” “I have a very emotional client.” “We are not afraid to try this case.” “This is a matter of principle.” “If we do not settle, we will file a motion for summary judgment.” “This is a case with a large punitive damage exposure.” These are all threats to get you to move off of your position. Each statement says “I want to shift the negotiation.”
While these can have an effect on shifting a negotiation, they are statements that merely test the opposing side. They can be, but do not have to be “negotiation shifters.” However, they do have to be recognized as an attempt to take power. Once you recognize the statement as an attempt to take power, you then have to devise a response that sends back a stronger signal that can actually result in you having the ability to take greater power and can become the “negotiation shifter.”
In the examples above, most of these attempts at taking power are threat based. The negotiators picked them because of other weaknesses in their case. In fact, it is rare to have a perfect case. Even with a good case, there may be insecurities involving time, money, control of witnesses. As such, it is rare to have any negotiation without one party and usually both parties partaking in these sorts of attempts to take power and shift the negotiation. But threat based attempts to take power actually result in some giving up of power.
Think of what happens if you can completely douse the fire of a threat-based attempt to take power (or any attempt to take power for that matter). The opposition has made an attempt, and they see that it has provided no value. If you succeed, you have taken power, and made a negotiation shifting move.
Here’s an example of an attempt to take power, and how you can shift the negotiation:
“Unless you make a more substantial offer, I will advise my client to roll the dice at trial (or file a lawsuit).”
Everyone who does what we do has heard someone saying how they will roll the dice.
Here, plaintiff’s counsel is trying to take power. The comment says that “I am not afraid,” or “I’ll make you spend lots of money defending this case,” or “I am challenging you.”
When you see this as an attempt to take power, you can see this comment in a much more interesting and useful way. Just look at the word “dice.” There’s an implication here that, when this comment is made, the attorney is only talking about two dice. If a case is completely frivolous and would not get beyond a summary judgment motion, the case can be a thousand to one shot, so by this reference to the dice, the attorney is trying to take power by knocking it down to eleven possibilities (or a 36-1 shot, I believe).
But there is some giving up of power. The statement says “I concede that I have a weak case.”
We can react in a number of ways here . . . by giving power, by taking power, or both giving and taking.
One way is to give all the power the attorney was trying to take here. We go ahead and make the substantial move or a quasi-substantial move. Issues are dropped, and it is all about the fear of rolling those dice.
Alternatively, we may give a little power by making a nominal move. But we do want to take full advantage of the power that has been handed to us. “I have a weak case.” We literally can have a conversation on what “rolling the dice” means in this context. We can again go through the hoops that the attorney on the other side will have to jump through. The reference to “rolling the dice” may not be a reference to two, but rather 8, or 12, or 20 dice.
In the 1000-1 shot, identify both the attempt to obtain power, as well as the attempt to obtain what may be undeserved power. The attempt at taking “undeserved power” is your opportunity here to take power of your own.
Using Surprise to Take Power
We previously talked about one party showing up at the mediation, and for the first time, they advise the opposing side that they have new damages that they did not previously disclose.
Even more suspect, there is the announcement that they have now obtained an expert who will provide the necessary testimony to make the case look a lot different than either side had previously thought. There was no mention of this expert in the mediation brief, but the party shows up with the expert report at the mediation.
The first natural reaction of a lawyer is to indicate that the new evidence has to be evaluated. This may end the mediation quickly, and the parties go off to another round of depositions.
They then reconvene two months later at a new mediation, and there are three possibilities here: One, discovery determines that there is no merit to the new evidence; two, discovery shows that there is some merit to the new evidence and new settlement position; or three, discovery confirms the new evidence and that there is merit to a new settlement position.
It is rare that the new discovery will establish that there is a complete lack of merit to the surprise evidence. Even if it is questionable, it ends up as another question of fact, or swearing contest for a jury to decide. There is going to be value allotted to the surprise “new evidence.”
So, the best way to take power here may be counterintuitive for the lawyer. Attack the “newness” of the evidence. Why did they not have the evidence earlier? Do they believe that it is even a good faith negotiation to show up at the last minute? They may have not even fully evaluated the new evidence. Take an opportunity in the private caucus session to determine the weaknesses in the new evidence. If this is in fact “new,” you will have a better opportunity to make arguments that stick than you may later have when a number of depositions are taken.
Looking at the three possibilities that you will face in agreeing to an impasse, try the 10-15% rule. Is it worth it to give the other party 10-15% additional value based on the new evidence? In most cases, if you consider the cost of a wasted day with a mediator, the cost of the additional discovery, and the risk that you may face an additional 25-100% change in the value on this new evidence presented, it is a bargain!!
Also, realize that you maintain control of the negotiation. Two months later, the opposing party will likely be on the offensive. They have now taken power. Use this “surprise” as an opportunity to take the power in the negotiation.
Using Experience to Take Power
The word “experience” brings up a lot of different implications that can be explored for a negotiator’s benefit. The analogy I draw on is looking at a battlefield between an invading force and natives to the land. The invader goes into foreign territory. They are not familiar with the terrain. The natives are. The natives know where to hide, where to attack, how to exploit the weakness of the invader not being familiar with the land. The natives are confident and calm. The invaders are nervous. The invader’s morale is low. The supplies that have to be sent across many miles are running out.
If you were choosing sides in a negotiation, and you can pick between “invader” and “native,” as described above, which side would you pick, assuming of course that the resources are equal. Most likely, you would pick the side of the native.
The reason that you picked “native” is that you probably believed that the native had the best chance of winning, and you just would like to be on the winning side. But, think what attributes the natives have here. They are familiar. They have experience with the land. They are prepared. They are confident. They are calm.
Bring all of these attributes to a negotiation. I am presenting my position backed with a lot of experience with this kind of case. I am prepared to discuss this case. I can draw on other cases that I have handled to support my position. My voice is calm. I am not rattled. My body language is relaxed. I also can show that I can walk away from the table if I do not get the deal I desire.
Here, I have the power in the negotiation. Ask yourself, if you can have all of these attributes, would you even be arguing with the other side? Is there any doubt that you will be negotiating in the range yu determined as the correct settlement range? Now, stick a mediator into the situation, and you have to use the mediator to your benefit, and the other side is taking on the role of “invader.” Who do you think will be able to sway a third party as to the correctness of their position?
Experience can be used effectively as a “negotiation shifter” even when you do not have the experience. An illustration of this is a mediation I handled a number of months ago.
It was a “whistleblower” claim brought by these fired volunteer firefighters who blew the whistle of “ghost payrollers”…people who did not show up for a fire but got paid.
Now, I have handled dozens of employment matters over the years, but never had a whistleblower case. Unfortunately for me, neither did defense counsel. So, when we got together the night before, I said to them that if I walked into the mediation, and I said that I had tons experience with these cases, what would m/y experience be. I surmised that whistle blowing cases that involved public health and safety issues would have a greater value,and if the whistleblower was a woman, that would engender more sympathy and have a greater value. \\
Here, we were dealing with whistleblowers who complained about firefighters who were stealing beer and pizza money. It did not have the same value.
The next day, that became our theme. I talked about all the whistleblower cases we had seen, and where exactly this particular case fit in. It quickly became the mediator’s theme, and the case settled in my desired range.
We did not present arguments here. All we did was to present some facts, came up with a conclusion related to these facts, and tied in our collective supposed experience. This became the “negotiation shifter”.
Using Concessions To Take Power
I am facing a negotiation in a case in which my client has a number of problems. As a negotiator, I have two choices. I can make bad arguments or deny the problem altogether. Or, I can concede those issues that I will not be winning for my client.
I never want to pick the first choice. If I make bad arguments on the bad parts of my case, I also make the negotiation about the bad parts of the case. I lose that negotiation. I also lose credibility when I try to discuss the positive aspects of my client’s case. Not only will I have no credibility, I have given up a chance to have the other side even listen and consider what I have to say. Even worse, I have created animosity with my negotiating partner, and now, the negotiation takes on a personal tone, and it’s about me, and not the client’s case.
If I concede on the weak points, I gain credibility and confidence as a negotiating partner with the opposing party. I show that I heard what they have to say, and this allows me to gain some traction on my issues.
It is also reflective of someone who is experienced and in control. I am a voice of reason. Since this is how I am viewed, I am more likely to be handed over power in the negotiation. I get to make my points. I get to be heard. I get to be trusted.
Looking at Every Negotiation Through the Power Telescope
Write down five negotiation situations that you have had recently. Identify statements or actions that were taken that can be perceived as an attempt to take power. We may phrase positions in a certain way to take control over the negotiation. Our body language and our tone are very intentional and serve a purpose. We give power and take power intentionally. Putting a statement, a phrase or any situation in the context of a “power move,” ask yourself the following questions: “Was there an attempt to take power? Is there a way to make that into a positive? Can we turn this attempt around and shift the negotiation completely? Do we give them something in return so we maintain control?
Ask yourself what are the choices that you have in each situation. Think about the choices in terms of taking and giving power. Think about the different outcomes depending on the choices made. Think about the huge difference this can make for your client.
