Monday, October 13, 2014

Bargaining with the Mediator

     After over a decade of mediation, I sometimes find that after the information has been exchanged and the negotiation is ready to begin with dollars, the parties are stubbornly resistant to discussing numbers that will land them within the likely "trading zone".  In these instances, I find it is sometimes effective for the mediator to propose her own "hypothetical brackets" to break the impasse before it finds it's way from lines in the sand to footprints in concrete.  By making the bracket "hypothetical", the mediator can take the credit or blame for such outlandish values or suggestions and can also narrow the gap and keep the parties moving. 
     For example, where a party has made an initial pre-mediation demand of $1 million to settle a real estate dispute and the other side could not possibly pay that, even if it agreed, but could, if necessary, satisfy a judgment in the "low 6 figures", the mediator may propose an initial bracket of $100,000 to $500,000 to settle (instead of attempting to negotiate between $1 million and a $10,000. offer all day).  The Plaintiff may not agree, but could then "negotiate with the mediator" to propose a bracket of $250,000 to $750,000, instead of sticking at $1 million or $990,000 in response.  The other side, hoping to end up between $100,000-$300,000 would be resistant to that, but might propose to the mediator that they would accept a bracket of $150,000 to $350,000.  This is a classic "negotiation with the mediator" in the execution of the "what if" game.  The likely starting place for entering into the trading zone would then become $200,000 to $550,000, which may jump start the negotiation considerably from the $990,000 to $10,000 starting place.
     By negotiating with the mediator instead of the opposing party, the disputants are able to test the values and get into the trading zone in a hypothetical way without making offers that become floors or ceilings for further negotiation if it becomes apparent that the parties cannot get into the same "trading zone" on the day of mediation.  Do any other mediators or lawyers find this effective as a strategy to save face and gain information?  Are there ethical considerations that I may be missing here?

Wednesday, September 24, 2014

Getting to the ZOPA in Negotiation

Yesterday I heard an employment case where a trial lawyer earnestly believed that he could get an inflamed jury to award his client at least $500,000.00 based upon the wrongful termination of a young, minimum wage worker who had less than $20,000.00 in lost earnings and some challenging facts to overcome.  His former employer came to the mediation prepared to pay his lost earnings (actual damages) if he had to, but not at all prepared to pay something akin to "punitive" damages based upon the spin the trial lawyer intended to put on the case.  Clearly, the two parties were not in the same "playing field" and the old-fashioned distributive bargaining (an initial demand of $650,000 and an initial offer of $2,000) were never going to work to get this case settled.
When the parties or their lawyers arrive at mediation with wildly divergent evaluations of the case, it's worth spending as long as it takes to discuss and agree upon the ZOPA:  Zone of Possible Agreement, however broad it may be.  Just as in baseball, the parties need to work with their lawyers to determine the boundaries for negotiation and what is truly "out of bounds".  In this case, that occurred through my own hypothetical negotiations--each time narrowing the ball field until it became clear to me that the case had a settlement value of something between $10,000 and $100,000, not $2,000 and $650,000.  Once both sides agreed to be in the same "ball park" realistic negotiation could ensue.
How do you communicate to your clients or your adversary counsel about the ZOPA before wasting precious time defining the boundaries of negotiation in mediation?

Thursday, September 18, 2014

The Angel of Optimism: What to do (beyond Prayer) after a Mediation Fails

Mediations happen at all different times in the life of the dispute.  This month, I've mediated two matters that had not yet been filed as lawsuits, one where no discovery had yet been conducted, and another on the eve of trial after a previous mediation failed.  All of the disputants came with the hope and expectation that their conflict would get settled that day.  Unfortunately, it doesn't always work out that way.  But after the formal mediation ends, the hard work begins when phone call and email and private meetings and review of documents takes place in a painfully slower process than the single day in which everyone agrees to set aside their other business and concentrate on just one matter.  Parties and sometimes their lawyers are tempted to give up and proceed to spend the time, money and risk shutting down all negotiation in the name of thorough litigation--as though they were never going to revisit the wisdom of a settlement.  In those cases, I urge the litigants to tap gently on the shoulder of their "Angel of Optimism"/Mediator and allow me to keep them on track and cool as they navigate the tumultuous waters and get to the other side.  In other cases, I will admit that I end up serving as that pesky little dog who just won't let go of your pant leg.  Somehow or other, the parties are ever grateful that somebody sees it as their job to keep working for a resolution--even while they engage lawyers to prepare for the potential that this is the 1 case they will take to trial this year or next.  Which do you prefer:  the angel of optimism or a pesky little dog ever nagging you to tune back in to the conflict your weren't able to resolve last week?  What other ways do you "stay with the conflict" when it fails to settle at the mediation session?

Thursday, September 11, 2014

Non-Monetary Concessions in Mediation: Can they be Effective?

Believe it or not, lawsuits are not always brought merely for money.  Sometimes, a gesture of good faith, a sign of understanding, a non-monetary, symbolic concession can make all of the difference.  It sounds trite, yet many of my colleagues in the International Academy of Mediators have chimed in to a dialogue about the interesting array of non-monetary concessions they have witnessed in settling the highest level of legal disputes.
In my own practice, I had an interesting real estate dispute between neighbors over the rights to use of a parcel of land between them.  The Plaintiffs were seeking hundreds of thousands of dollars as damages, claiming that the value of their property had been substantially diminished.  As an interesting, creative offer, the lawyer for one of the parties offered to purchase the property from the Plaintiffs at a substantial increase from their purchase price.  Although they did not accept his offer, they did recognize that perhaps the property they thought had diminished in value, had in fact appreciated.   Rather than holding a clouded property, they now saw it as the gem they first endeavored to buy.  It was just that minor shift that opened the gates towards a reasonable settlement.
What are some of the creative ways that you've seen settlements occur that work effectively?

Thursday, September 4, 2014

Handling Continuing Continuances of Mediation

The lazy days of summer are behind us and most people return in September with a renewed purpose and determination to take care of business, stop procrastinating and get back to work.  In those cases where a scheduled mediation hearing  is continued more than once, the mediator is well-served to inquire and consider the basis for the continuance.  Is there a hint that the parties can work out their differences without the aid of a neutral third party?  Has one party lost hope that any meaningful settlement can be achieved? Is one party preparing to file bankruptcy, go out of business or abandon the claim? Is there posturing going on about how the fees should be split and who should be at the bargaining table if meaningful negotiations are to take place? Do the parties not wish to invest in the settlement by paying the mediator's fees in advance as is required by their engagement? Does one party not wish to pay their lawyer to pursue this avenue?  Has the Plaintiff or his lawyer lost interest in the case and reached the conclusion that it's not worth pursuing?
As in all facets of mediation, make no assumptions.  Still, I think it's fair to ask the party who requests the continuance why they are seeking it.  Sometimes, it can give valuable clues into the risks and benefits to settlement when they ultimately do show up for mediation.  How do you handle postponements and as lawyers, do you reveal the reasons to your mediator?

Wednesday, August 27, 2014

Balancing Fairness and Justice: When Just Right isn't Enough

As an arbitrator (or a Judge) we have limits--on our outward demonstration of compassion, our creativity in crafting appropriate and fair remedies and our moral indignancy where wrongs occur without remedies.  As poorly as we may feel about how someone was mis-treated, we are constrained to follow the letter of the law (even where it may be at odds with it's "spirit") and dole out remedies only where each element of a given cause of action has been proven by a preponderance of evidence together with actual, credible, available damages.  Yet, life is messy.  Memories fade.  Documentation is not always what we wish it were and hindsight is not always perfect.  At trial, the evidence may not be sufficient to meet those high standards.
This week I was challenged by a multi-day arbitration where I felt personally torn between the dictates of "justice" (technically, the respondent had no legal obligation to keep an unwanted, at-will employee when a new Supervisor came in who disliked him) and the cry for "fairness" which may have dictated he be given some notice, explanation, that the termination be based upon legitimate "cause" or at least that he be given some recognition for the many years of service that the employee had given prior to the termination.
My struggle ended with my own suggestion to the parties that before they finish putting on all of their evidence (and possibly becoming further emboldened in their positions) and before I was forced to apply the law and reach a verdict which would be adverse to one and victorious to the other, perhaps they would like to engage in settlement discussions.  Five hours later, and to my great relief and their great surprise, they had arrived at a very creative and fair settlement--which had less to do with "justice" than my verdict would have, but everything to do with "fairness".  I am confident that 2 days into trial, had I not suggested this approach, the parties would not have recommended settlement discussions to their respective clients.  Both had engaged very competent counsel to win.
Sometimes, a neutral third party is exactly what the parties need to arrive at the delicate balance between "fairness" and "justice" that we try to maintain.  Do other arbitrators dare to recommend settlement discussions during the evidentiary hearing?  (I did not serve as the mediator, by the way, because no one was expecting this would work--so they wanted me to continue the hearing if it failed.)
I offer this experience as hope for a more balanced future outcome on the tough ones!

Thursday, August 21, 2014

Mediating with mental Illness

I am increasingly aware that there is a broad spectrum of frustrated individuals amongst us.  Some turn to their doctors, others to lawyers, still others to clergy members, best friends or family members when problems seem too great to cope with on their own.  What I learned this week from a psychologist who observed a hearing I conducted,  is that many people with mild to moderate mental health disturbances seek out validation for their conduct (or vindication for  the misconduct of others) through repeated legal challenges.  Whether they are truly "vexatious litigants" or merely forever challenging authority in their work place or their communities, there are plenty of instances where my non-professional opinion leads me to conclude that something other than the facts and law are driving the particular dispute before me.  As we often say, even with those not mentally ill, "it's never just about the money".  In those cases, it would appear to me that the best "treatment" that a mediator (or Judge) can offer is to allow the individual to fully vent, demonstrate attentiveness and understanding and then proceed to work to find the best outcome possible based upon that genuine understanding.
Still, I am not a psychologist and frankly have no confidence that what I do as a mediator is adequate to "hear them out" and allow the necessary venting.  Sometimes, in fact, I am tempted to blow up at them and recommend they seek out mental help, not legal help.  Of course, I never have allowed myself to go that far, but I wonder what others do to manage parties who exhibit signs of mental illness in the course of the mediation?  Can it be ignored? Can it be helped or changed? What are the best strategies to manage these challenging disputants?

Thursday, August 14, 2014

Keeping Your Balance in mediation

Mediators are called upon to be chameleons:  we need to take on the stripes of each of the parties, while steadfastly resisting all urges to lean to one side or another, thereby not only compromising our own neutrality, but perhaps tipping the scales of justice.  This week, I found myself less than neutral when a woman younger than I teared up and complained to me that the muscular sprain that she suffered 3 years ago when she slipped in a store that she was suing, has kept her from working, having intimacy with her husband and basically has ruined her life.  She still wears an orthopedic brace and claimed to have severe and disabling pain throughout the 1/2 day hearing.  Despite the good work that I managed to conduct between the parties as to likely outcome of both liability and damages, Plaintiff refused to accept her attorney's recommendation of a respectable settlement/compromise in the disputed claim.
Be reminded that 1 month ago I suffered a fracture of my foot and chipped two bones in my ankle.  I am still wearing a non-weight bearing boot and still managed to conduct no less than 8 hearings since the accident.  Although I am uncomfortable, I am in no real pain and my bones are healing as they are expected to. Still, it was excruciatingly hard for me to summon up genuine sympathy for the Plaintiff--whose injuries, by comparison to mine, were minor and long ago!
At times like these, I need to remind myself that my perspective can never be substituted for the parties in the dispute.  I am engaged to facilitate the analysis--but in the end, the decisions, the risks, the rewards are all in the hands of the disputants.  In Yoga, there is a position of balance that mimics a tree (See inset).  At times of great conflict, it's useful to have such a position to resort to--a kind of momentary "time out" to re-gain that perspective and re-focus on the dispute at hand.  Mediators sometimes call this technique "going to the balcony"--a visual of taking yourself out of the dispute to re-gain that "birds eye view".  I'm not sure I accomplished that in this hearing, but it's a good reminder that even a person with a broken foot needs, occasionally, to balance on one leg.
What techniques do you engage to keep yourself balanced in the negotiation--or is it okay to lean on one side or the other in these circumstances?

Thursday, August 7, 2014

When will this be Over? The Agony of the Drawn Out Mediation Session

After over a decade as a neutral, occasionally I can see where the parties will go and that settlement will be accomplished fairly early in the process.  Last week, I had the pleasure of being "shadowed" by a student of mediation, who asked me quite directly, "Why is it necessary to do this back and forth in these instances?  Why can't the parties just get to their number, since it's clear at the outset there will be an acceptable number in a close range?"
As in everything worthwhile, my response was that if the parties had to work for the resolution, they would also have some ownership in it.  In my hypothetical dispute, the initial demand was $100,000.  The initial offer was $10,000, but confidentially, the defense counsel told me he'd never go beyond $50,000.00.  The case settled at a mid-point of $45,000.00 some 3 hours later, and both sides felt triumphant.  I am confident, as I assured the "mentee" shadowing my hearing that day, that had I made the offer of $45,000 as the first (but final) offer as against a $100,000.00 demand, the Plaintiff and her lawyer would have demanded $90,000 and would not have felt as good about ultimately accepting $45,000. as a compromise.  In fact, they may well have rejected that offer and let slip away a decent compromise.
Although sophisticated parties and their counsel are often impatient and want to begin the negotiating process and conclude it quickly, shortcuts are dangerous when the mediator is attempting to manage expectations, weave in sensible tidbits from the varying versions of the factual history and continually assess the likelihood of success if the matter does not settle on that day, together with the costs attendant to a failure to reach an agreement.
In what ways do you pace your negotiations for maximization of success?

Thursday, July 31, 2014

Using Diplomacy in Negotiation

In my humble opinion, neither missiles nor trials are effective at getting the message across to an unwilling, unreceptive party.  In these troubling times in the Ukraine and the Middle East, I find myself returning to my undergraduate training in International Relations at Pomona College, where we students of diplomacy were advised to choose our negotiating partners wisely by picking the person whom we most trusted to carry the message of our people or our cause with the most respect, tact and reserve, but forcefully and convincingly.

During mediations, at times when the emotions are high and the level of misunderstanding and distrust even higher, I find myself resorting to these old diplomatic lessons.  I straighten my scarf (preferably an expensive one from Paris, France), I turn up the highest polite etiquette (addressing everyone by Mr. or Mrs. and standing when they enter or leave the room).  I breathe deeply before I say anything, carefully considering the way each message is delivered and received.  In short, sometimes mediation calls for the same formality as diplomacy.  Once the parties have selected a trusted third party neutral, they are more apt to receive her message with open-mindedness and even gratitude for leading the way out of conflict.  I wish the Israeli's and Palestinians could agree upon a trusted third party who might be able to speak so each could listen and listen, so each could speak.  Maybe then there would be some acceptable framework for dialogue and creative solutions.

In what ways do you summon diplomacy to achieve better settlement results in litigated cases?

Thursday, July 24, 2014

Dancing on One Foot: The Dynamics of Negotiation

There is a certain rhythm that develops with every negotiation.  Sometimes, for example, I find myself physically "leaning in" towards the party with whom I'm working.  Sometimes, when I think I need a position of authority, I stand as I enter a room, whereas at other times I invite the parties to sit alongside me, suggesting by my position that "this may take awhile".  Even the parlaying of offers and counter-offers can be fast or slow, laced with a lengthy explanation or just conveyed through numbers.
Some of you may know that a couple of weeks ago I stumbled and broke my right foot.  This meant that the last 4 mediations which I have conducted have been completely different than any that have preceded them.  Unable to walk or stand on two legs, I have stayed seated, at the head of a conference table and invited the parties to come back and forth to me for every discussion. I have spent four full days with this new experiment and here are my reflections.
Last week, it was extremely difficult as I felt I had little control over the negotiations.  I was unable to casually enter either room or whisper my ideas in the hallways as I may have in a "normal mediation".   I was dependent upon other mediators to usher folks in and out or, in one case, asked the counsel to advise one another when it was "their turn".  But this week, assisted by a couple of well-trained Southern California Mediation Association's "mentees", my mediations went much more smoothly.  Now, when I stand in place (assisted with the walkers, crutch or mentee), the disputants know that I am "in command",  and when I wheel myself to their room for a final "closing" discussion on my new knee scooter, they are so appreciative of my effort that they listen attentively and are much more deferential than when my two legs dance over under ordinary circumstances.  I have learned to accommodate to the rhythm as necessary, and more importantly to stay in tune with the rhythm of the music in new and interesting ways.
I am sure there are many lessons which I will learn in this summer of non-weight bearing, but in the dance of negotiation, I have learned that it is possible to use the change in dynamics to effectively move the parties towards a resolution, even on one foot.
How do you use the physical movements in your mediation to achieve settlement?

Thursday, July 17, 2014

Staying the Course: Follow Up Care in Mediation

Last week I was on vacation in Lake Tahoe.  While there, I was contacted by one of the lawyers who had come before me in a mediation last Spring.  Now,     some of the pleadings had been amended and new parties had been added.  Not surprisingly, his client had expressed interest in revisiting the negotiations which broke down at a time when the numbers being advanced did not seem 'worth it".  In between my own kayaking and hiking, I made the time to follow up and re-engage both parties in a course leading to settlement and steered them off of their current course towards trial.

In another case, there were numerous decision-makers who had not been present for the full day's mediation session and could not appreciate the effort or logic to the Plaintiff's "last, best and final offer" which came at the day's end.  For them, I spent several hours preparing a written, confidential "mediator's analysis" memo which they could share with the others and use as a basis to discuss their response after they all had a full opportunity to review what I had learned about the facts, the legal liability and the damage claims.  They agreed to consider this and respond to the Plaintiff's demand in a couple of weeks.

For those of us with a busy mediation practice, it's not easy to "stay the course" in this way, but I've been told it is what distinguishes the true professionals from the novices.  Luckily, as I've gained more experience, I find that most cases do settle in a single day, so my portfolio of "open cases" and my risk of being interrupted while on vacation grows smaller!
What do you do to "stay the course" where the mediation doesn't result in a settlement initially?

Thursday, July 10, 2014

The Lawyer-Whisperer

Occasionally, facts come out in a mediation that are entirely irrelevant to the dispute at hand, yet appear to be true obstacles to a successful resolution of it.  Recently, for example, I mediated a pre-litigation employment dispute in which the employer company had been sold after the employee's termination.  That part was well known to both me and the opposing counsel.  What was not known to any of the participants in the mediation is whether the law firm handling the defense of the matter would be able to maintain the Corporation as a client once "NewCo." took over.  This meant that the Defense lawyer wanted to settle the case, but wanted to do so at an attractive enough rate that his work might gain the attention of the potential new client as the transition took place.
In an interview with the CEO of Pepsi on the news last week, Indra Nooyi declared that "women can't have it all", and yet I have also delicately scheduled arbitrations and motions, and settled cases to avoid a trial which would otherwise occur during a still-secretly planned maternity leave by many women lawyers.  As Nooyi suggests, many women professionals still feel the need to keep secret from their opposing counsel or others the plan to take a 3 or 4 month leave of absence, lest they take advantage of their "delicate state" (or absence).  Indeed, many agree with Nooyi that women professionals simply "can't have it all".
Practicing law, for most of us, is both a life-long career and a business.  Both factors play in over the span of life's milestones and business and economic challenges.  When they arise, I summon all of my diplomatic skills to respectfully confide (with permission of course) in the opposing attorney as to the little lawyer-secrets that have presented obstacles to resolution.  Usually, once I take them into my confidence, the other side rises to a respectful and more understanding place and agrees to a settlement that is attainable under whatever circumstances have declared themselves, rather than hold out for something that is only a potential in the future.
How do you handle lawyer-secrets that go beyond the facts of the dispute at hand?

Thursday, July 3, 2014

Preparing for the Unexpected

On this eve of American Independence Day, I am reminded that in mediation, we always need to be prepared for the unexpected.  Yesterday, fireworks nearly erupted after a full day's mediation when, as the Defense lawyer began drafting the settlement agreement, his client raised (for the very first time) that he would be unable to pay any of the negotiated sum until after the Christmas holiday brought much needed revenue back into his business.  While this made for a colorful backdrop to the easy negotiations that had transpired up until that moment, it also threatened to derail the entire process.  At times like these, I find the best approach is to take a few steps away from the "fire" and pivot towards giving some space for creative solutions.  In this case, the lawyer and I were able to analyze that this "debt" would take priority over others if the Plaintiff's counsel went to trial and got an adverse verdict. Periodic payments made to Plaintiff would be roughly equivalent to the monthly invoices that the Defense counsel would be sending in the same period of time.  At the same time, I tipped off the Plaintiff that there was "an issue" about how soon payments could be made--suggesting he may have to wait until year end.  That way, when Defendant figured out how he could make the full payments within 90 days, it didn't seem quite so shocking and the deal was done.  Like fireworks in the night's sky, some big, scary, fiery events will come out with a boom and then fizzle into the air again.
How do you handle the late-day fire works and surprises that come up when clients or lawyers erupt unexpectedly?
Wishing you all a wonderful, safe and sane 4th of July!

Thursday, June 26, 2014

The art of Small Talking

My friend and "She Negotiator", Victoria Pynchon blogged this week about women and small talk.  Essentially, she reminded me that women are sometimes superior at making idle conversation (the social grace in us!) and yet in professional settings have often tried to mask or hide this innate ability, for fear of appearing shallow.
Here is a cute little reminder from none other than Larry David that small talk can be the key to forming the cornerstones of trust, rapport and cooperation at the beginning, middle and end of a negotiation.  It is an art best practiced at dinner parties and while waiting at elevators, but is an art worth developing.  Invariably, if you work at it, you can find some common experience or interest with most everyone you meet.  A genuine curiosity about their interests will also serve you well.  After all, mediation is designed to be a way to open up communication between two sides of a dispute who have shut down.  Small steps towards creating a lifeline between the two will invariably break down the barriers built up to shield them from the discomfort of the dispute.  World Cup Soccer anyone?
What efforts do you make to engage your opposing counsel or mediator in "small talk" in order to create rapport and get beyond polarity?

Thursday, June 12, 2014

Lessons from my Father: The Value of a Hearty Handshake

With more and more mediation hearings occurring before the litigation gets fully underway, many disputants and opposing counsel have never met before the mediation hearing.  For this reason, I'm finding it increasingly vital that every mediation hearing begins with a quick "meet and greet" between the parties and a genuine handshake.  Research backs me up on this.  In a studyhandshake conducted at the Harvard Business School, subjects were asked to negotiate a mock purchase and sale of a piece of real estate.  The control group was requested to begin with a handshake.  The other group were seated across the table from one another and most of them entered into an immediate negotiation without bothering to shake hands beforehand.  Surprisingly, the results for the two groups were different.  After a handshake, both buyers and sellers tended to be "less misleading" according to the study, and both sides reported arriving at a deal that seemed fair and evenly distributed, in contrast to the other group, who reported that the deal was less fair and imbalanced in many instances.
My father was a successful business man for over 30 years.  For him, "his word was his bond" and he would routinely buy merchandise for resale in a face-to-face negotiation which began and ended with a genuine handshake.  Last week, I conducted a pre-litigation mediation.  The defense counsel had flown in from Northern California and had never met the (very compelling) Plaintiff nor her (very well prepared) Counsel.  All interaction up to that point had occurred via email.  There were no depositions and no court appearances to rely upon.  We began with a sincere meet and greet and it really did set the tone for a successful, deliberate, polite and reasonable negotiation for the balance of the day.  (Of course, unlike my father, the ultimate settlement was reduced to a writing signed by all parties at the conclusion).
Even in cases in which the parties or the mediator decides to dispense with an initial joint session, this little gesture of a meet and greet and some human interaction, even touch, may go a long way towards getting even the most contentious matters resolved civilly and efficiently.  Do you insist upon an initial handshake amongst disputants and counsel?

Wednesday, June 11, 2014

Ethics and Legal Bargaining: When the Pre-Mediation Goes Up at the outset

It has happened to me twice in the past two weeks.  The Plaintiff's lawyer has sent a demand letter asking for settlement in a certain amount without the authorization of her client.  The response to the demand letter was a willingness to attend a mediation, which is then scheduled for 1-2 months after the demand was communicated.  Then when they arrive at mediation, the demand doubles or triples--simply so that they can get back to an ultimate settlement at very near that original demand.
While it may be a breach of ethics to make a demand to settle a case without specifically gaining the client's authority, the other challenge is that it creates  some awkward moments as the negotiation begins by going backwards, not forwards at the start of the mediation hearing for both client, mediator and the other side of the dispute.  For a mediator, it is a minefield when this discrepancy or intention is discovered for the first time in an initial session with Plaintiff and his counsel.  Where it occurs, I have had concerns about a breach of fiduciary duty to the client and may first discuss the issue privately with the Attorney and then, if they insist upon opening with a demand that is higher than their pre-mediation demand, unless there are new facts or circumstances, I will ask them to articulate the basis for that move directly to opposing counsel.
In both instances, simply walking gently down the path of understanding why the attorney made the initial demand and why the client insists upon starting at a higher demand may be all it takes to untangle the mess and advance the negotiation instead of jump backwards and head towards an impasse.  One of the best ways to avoid this is to question the lawyers before the mediation hearing as to any pre-mediation settlement dialogues and whether anything has changed to cause them to re-evaluate those numbers as a starting place.  They will likely reveal their issues during that pre-mediation conference call and allow you to break through this ethical minefield with all parties and their counsel in tact.
What do you do when there is this apparent reversal or re-appraisal at the mediation hearing?

Thursday, June 5, 2014

Foreign Exchange: When Eastern Yuan meet Western Dollars

This week I mediated an interesting dispute between a Chinese employer and it's former employee, who was an American citizen working in America for the Company at the time of the termination of his contract.  It was interesting to learn that apparently the remedy in China for the wrongful termination of an employment agreement is a maximum of eight weeks of earnings.  Here, the remedy may include actual lost earnings (back pay), front pay for some reasonable period of time (the reasonable amount of time estimated it will take to find alternative equivalent employment), emotional distress and attorneys fees.  In California, this often results in even higher settlements when issues surrounding wage and hours are factored in.  In this case, it amounted to a (confidential) six figure settlement.  But that is where the real cross-cultural challenge began, not ended.
As a student of International Relations in the 1970's, there simply was no discussion about concepts like "money laundering" and business ventures with the New Republic of China.  At that time, China was a Communist country which was not open to conducting business with U.S. citizens.  As I recall, it was not yet open to American tourists either.  So it was some surprise to learn that the Chinese employer here considered the problem of transferring hundreds of thousands of Chinese Yuan to America in a lump sum completely daunting.  In all likelihood, he believed it would be held up by the Chinese government and may take many months and great efforts to get the money out of the Country.  On the other hand, there was so much distrust between the parties that neither one were comfortable with a protracted payment plan which could be in the maximum of $10,000.00 USD increments. That seemed to be the magic number which could fly under the radar of the government and not be flagged for scrutiny or held up upon transfer.
Ultimately, the creative and cooperative lawyers, once they arrived at a deal on the settlement of the case, agreed to using a Chinese escrow.  Defendant will put all of the money into an account, and the escrow will be charged with sending the funds over a period of months until fully paid directly to the Plaintiff's lawyer.   The use of a trustworthy neutral third party is, of course in my view, brilliant!
I offer this as a lesson in cross-cultural negotiation in an arena that I have never had to delve into before.  What creative ways have you developed to move money from one currency and country to another safely and legally?

Thursday, May 29, 2014

Taking Time Out from the Mediation Hearing

On weekends, you can find me aboard our sailboat, aptly named, "Time Out".  Last week, I had two mediation hearings which could not settle on the day of the hearing.  Rather than declare an impasse, however, I simply called a "Time Out".  In the first case, there was some yet-to-be discovered documentation which Plaintiff's lawyer believed would support his contention that the basis for the termination was pretextual and the true basis was disability discrimination.  In the second, the Defendant Company had been sold and there was limited settlement authority from the old Company, given that they had already sold the case--both costs of defense and damages to a wealthier new Company, who would assume all future risk by mid-summer.
Our boat's name is a metaphor for taking time "out at sea" and the album name for the jazz record by Dave Brubeck, "Take Five" (our previous boat's name).  But in the case of a mediation, there are many compelling reasons to call a "time out" rather than an end to a mediation hearing.  A "time out" assumes it is temporary, as contrasted to a "time in".  Negotiations may be resumed at a time when they are likely to be more fruitful.  Like sailing, it also suggests that at least one, but often both sides need to take a little perspective before proceeding and closing the deal.
The post script is that one of the cases has rescheduled for another full day of hearings after negotiating an acceptable bracket within which to begin and resume negotiations.  The other is parlaying offers and counter-offers by telephone, now fully appreciating that there is limited time to continue negotiations before they will have to start over with new decision-makers in the board room.
In what ways do you communicate a willingness to continue negotiation when you hit what would otherwise appear to be an impasse?

Thursday, May 22, 2014

To the Success of Women Neutrals

I am honored to have attended the reception for the Top Women Lawyers last week (and to have been photographed by the L.A. Daily Journal with honorees, Susan E. Hollander and Diane M. Doolittle in the LADJ 5/16/14).  I also attended the California Women Lawyers 2014 Conference last week, "celebrating 40 years of Advancement".  Although I was struck by the awesome accomplishments of my cohort of women professionals at both events, I was equally troubled by the very current and persistent challenges still facing younger women as they enter the legal profession, and those in the middle of their career, still trying to juggle the demands of practice, family and self.For example, according to keynote speaker, Professor Joan C. Williams, who is Distinguished Professor of Law at Hastings and author of 8 books, most recently, "What Works for Women at Work" (co-written by her daughter, journalist, Rachel Dempsey), 40 years ago, only 15.9% of partners in major American law firms were female.  In 2013, that figure was only 16%. Where are all of the women lawyers hanging their shingles then?
In a fascinating study conducted in 2013 and presented by Patricia Gillette of Orrick, Herrington and Sutcliffe, LLP on "Rainmakers", the Lawyer Metrics group found that the top personality traits and behaviors of rainmakers of both genders were "engagement" (a desire to be highly engaged and place a high priority on work-related activities) and "dominance" (a tendency to exercise power and influence over others).  Part of me was left wondering whether these traits are primarily feminine or masculine and whether, though rainmakers of both genders had similar traits, there were in fact fewer women who naturally had an instinct towards "dominance", for example.
Finally, I attended an intriguing presentation by Kimberly Papillon on Implicit biases in decision-making, which called into play all kinds of brain tricks which we are nearly powerless to overcome as human animals.  For example, it is nearly impossible to resist reading the word "BLUE" when the print is in the color Yellow and asked to identify the color, not the word.
In what ways do you consider your gender affecting your practice--positively or negatively?  What strategies can women adopt to overcome some of these inherit biases or should we just "let it be"?  In what ways may the gender of your neutral affect both process and outcome of your mediation hearings?

Thursday, May 15, 2014

The Value of a Good Faith Gesture in mediation

This week I learned something from a friend and colleague, Steve Rottman, who, more often than I do, mediates at the lawyer's offices.  He sets up the condition that whoever has the convenience of holding the hearing in their office must pay for lunch and parking for all parties.
When I arrived at the Defense counsel's very elegant offices this week, I tried this out.  Though this had not occurred to the young associate before I arrived, he reluctantly agreed to bring in sandwiches and salads at noon for all participant's at his client's expense.
As most mediators know, the negotiation seldom begins significantly before noon, so the timing could not have been better.  Miraculously, the Plaintiff reduced her demand by $25,000. when the lovely, catered salad arrived.  She was hungry and hurting, and this put the first smile on her face that I had seen that day.  Then, when the very difficult moment came when the parties were down to the last $5,000 in the negotiation, the receptionist was leaving the  office for the day,  and (at my suggestion) asked to collect the Plaintiff and her attorney's parking cards, so she could validate the day's parking.
Voila, the case was settled in the very next move.
Sometimes, a very small gesture of good faith (in this case probably a total investment of $100.00) can go a long way towards signaling cooperativeness and indeed, gaining cooperation towards resolving a contentious dispute.
In what ways do you value and encourage these gestures of good faith?

Thursday, May 8, 2014

Apologies in Mediation: Are they Effective or Overstated?

I had the privilege of learning from Professor Peter Robinson of The Straus Institute for Dispute Resolution that a well-articulated apology can go a long distance towards resolving even the most contentious commercial dispute.  Yet, it is such a difficult word to summon when being sued by another person, as it may suggest acceptance of blame, guilt and responsibility for some conduct which has legally been "denied".

In employment mediation, particularly where there has been a longstanding relationship between employer and employee, I find that there are many very solid non-monetary options which can go a long distance towards resolving the dispute.  Beginning with a candid explanation for why the termination occurred, beyond the terse and legalistic "not for cause" severance letter, an employee can begin to see the reason why no early explanation was offered.  Often, the employee is desperately seeking alternative employment and payment of a fair severance plus a letter of reference or even assistance in finding another job can go a long way.

As a mediator, I try to find out the underlying interests of the parties before I begin to work through the financial negotiation.  Though it may be hard to orchestrate, a genuine apology for the conduct that got the parties to the litigation may unlock the doors towards an end to it.  How often do you hear an apology and is it a sign of "backing down" or just human decency?

Friday, May 2, 2014

Start the Music: Dancing through Mediation

I read Ken Cloke's newest book, "The Dance of Opposites" over the last weekend and then yesterday I attended an excellent training by my friends and colleagues at the IAM, Tracy Allen and Eric Galton at the United States District Court.  They reminded me of a concept Tracy calls, "People Moving" as a means to getting the parties out of position that appears to be heading towards impasse or "stuck".  In essence, the concept is simple in both dancing and negotiating:  if you stop moving, the dance is over.  Tracy reminded me that although we mediators are "on the move" throughout the day, shuttling between the two or more rooms in private sessions, the lawyers and their clients are physically "stuck" in a single "position":  a metaphor for the oppositional positions of adversaries in litigation.  Getting them out of their complacent seats, up on their feet, moving them to a different room, with different light and art work can sometimes be all it takes for them to gain additional perspective and to see the conflict from a different point of view.  Simple, elegant and brilliant!  I have reviewed Ken's book for an upcoming article and will publish it for you soon--but for now, I highly recommend getting out of your seat and getting a copy of it.  It is highly readable, ambitious and inspired--just like it's author, Ken Cloke.

Friday, April 25, 2014

Strategies for Staying out of the Dispute when it gets personal

Every once in awhile, a frustrated advocate will take their wrath out on me, their humble mediator.  This happened this week when I sent an email to one of the advocates, who had to leave early from a mediation hearing on Friday, requesting that he and his client return on Monday to complete the unfinished negotiations.  I had the full weekend to consider a new approach:  one that would delve deep into the factual basis for his client's claim for indemnity.  When Monday morning arrived, instead of expressing delight that the former employer had settled the case in chief and agrred to pay all of the damages on behalf of his client, the lawyer for the employee was furious--apparently at me for a failure to call his cell phone and instead leaving a very formal email (sent by my case manager, not me) requesting them to attend the continuance of the hearing set for Monday, but sent after business hours!

Because it was my responsibility to give notice and get everyone as ready as possible to successfully complete the negotiations, I took it quite personally.  At times like these, I find it useful to figuratively "go to the balcony", by which I mean literally to take a walk, chat with colleagues and regain my balance and perspective.  I am engaged to perform a job and if I allow myself to be ensnared in the conflict, I am ineffective.  Still, it was challenging to bring myself out of the conflict so that I could effectively conduct the balance of the negotiations before me with my usual even-handedness.
What strategies do you employ to stay out of other people's disputes as mediator or to avoid pointing fingers as the mediator as a target?

Friday, April 18, 2014

Those Nightmare Stories: Are they Useful in Mediation?

Mediators and attorneys generally discuss the alternatives to a mediated solution in terms of risk analysis, cost analysis, investments of time and likely verdict potential in litigated cases.  But occasionally, a case goes awry in ways that seem unpredictable and aberrant.  Are these stories useful to help get cases settled or is it too easy to discard these as hyperbolic nightmares?

In a recent appeal from a Labor Board Commission ruling, both sides rejected a Mediator's proposal of the amount of the award plus 25% for attorneys fees.  The attorneys fees would only be awarded to the employee if the employer lost it's appeal--as a kind of penalty for appealing a Labor Commission ruling and incentive to simply pay the award.  The shrewd Employer in that case decided rather than to pay the award plus 25% as I had proposed, that he would simply dismiss the appeal and pay the Labor Commission award alone.  The employee's lawyer brought a motion for fees and costs crying unfairness and gamesmanship.  The Judge, however, was constrained by the letter of the law and dismissed the motion. No fees were awarded.

It is a bit of a nightmare, but maybe makes a good story as to the strange tentacles that come with the law.  Useful?

Friday, April 11, 2014

What has Fairness got to do with Mediation?

For those readers that enjoy a bit of game theory, herescaleofjustice is a lesson I learned last week at the ABA Dispute Resolution Conference.  It turns out that human beings have a keen sense of fairness and will reject an offer they think is inherently unfair, even if it is of benefit to them.  The good news is that we are all human, and so behavioral economists predict that most of us will not be ultra-greedy as we expect that our human negotiating counterparts will reject an inherently unfair offer.  Some call this "predictable irrationality".
Here is how the "ultimatum game" is played.  One person is the "proposer" and is handed $100.00 (in singles).  He is asked to offer some amount to the responder.  If the responder accepts, they have a deal.  If the responder rejects, neither proposer nor responder get to keep any of the money.  Typically, 50% of the responders would reject anything less than $30 and about 50% of the time, the proposer would offer about $50.  On the other hand, if it was a computerized offer, the responder would, on average, accept $15, because we don't expect a computer to be fair.  But even monkeys exhibit similar behaviors where, for example, they observe another monkey getting a better treat than theirs.
Mediators can, it seems, harness that inherent "fairness" principle to begin a negotiation that is driven by the parties sense of fairness.  This will trigger a natural reciprocity and bring out the best in the negotiating parties at the outset.

Friday, April 4, 2014

The Chess Game of Mediation

Strategic negotiation is about as straightforward as a good game of chess.  The game doesn't begin until a few 'give away' moves have taken place.  In mediation, these are the outrageous demands, countered by the insulting offers.

The best negotiators are always contemplating the expected reaction of their opponent in response to another move.  That is why it sometimes takes so long to respond to your adversaries offer when it does not fit within your own expectations.  The rules of reciprocity, rewards and incentives all apply as numbers take hold in the negotiation of commercial cases.  In order to get to a reasonable offer, you will need to demonstrate that you are going to get into a reasonable range through your demand.

Like the pieces on a chess board, some moves are lateral, some diagonal and some take two moves into account at once.  The pitter pat of the pawns is only the preliminary phase.  Eventually, you need to be protecting your King and Queen from attack and demise.

How do you apply game theory to negotiation to win your client the best result in mediation?

Friday, March 28, 2014

How do you Get an Honest Evaluation of Liability?

One of the most valuable reasons to have private caucuses before bargaining begins in mediation is to ferret out how strongly each lawyer feels about their client's case.  These are discussions that are rarely included in the legal briefs.  A friend and awesome mediator, Gig Kyriacou, says he asks each side to anticipate the other's strongest points.  In doing that, he is able to learn early on what each side perceives their weakest point to be.
I find that most lawyers have carefully and deliberately evaluated their chances of success at trial, but have never communicated their weak points to their clients and certainly never would concede them to the opposing counsel.  Enter the mediator's world!  How do you get an honest evaluation from the lawyers in mediation or settlement discussions?

Friday, March 21, 2014

Keeping the Mediator from Making Assumptions about the Parties

This Saint Patrick's Day I had a good reminder that a mediator should never make assumptions about matters such as culture, experience or sophistication of the parties before them.  The case was brought by a Japanese man who had sued his former employer, an American company, for wrongful termination.
The Company's representative, a jolly Irish gentleman, was respectful of the process and greeted the Plaintiff warmly at the outset of the hearing.  At the end, I said to the Defendant that I thought it unfortunate, but that the genesis of the conflict appeared to be a breakdown in communications at the workplace, as so many employment matters are.
It was at that point that the Irish Defendant muttered something to me in perfect Japanese!  It turns out he had lived in Japan in his youth and had a great respect and deference for the people there, whom he considered family.  Had we not engaged in that banter, I would never have known that this individual had such a deep understanding of the Plaintiff's culture.  What was more, he had been a party himself to a published lawsuit many years ago, and knew the vagaries of litigation firsthand.
I was reminded of how important it is to enter every negotiation fresh and engage in basic conversation at the outset in an effort to ferret out the keys to helping the parties arrive at a mutually acceptable settlement to their disputes. How do you keep yourself from making assumptions about the parties?

Saturday, March 15, 2014

Friday, March 14, 2014

Is Distributive Bargaining Worthwhile when the Parties to a Negotiation are Hundreds of Thousands of Dollars Apart?

       I find that most of the cases that I mediate need a third party neutral because the two sides are evaluating both liability and damages very differently.  The mediator is the bridge to some better understanding.  But beyond the conceptual, how effective is it to conduct distributive bargaining by way of demand, offer, counter-offer and counter-demand when the parties start out with a demand of something like $1 million and an offer of $5,000.?

     My experience recently tells me that the simple acting of loosening up the parties towards movement, even if it's minimal, is useful to gain some momentum and narrow the chasm between the two sides.  In a hearing this week, the Plaintiff responded to that hypothetical $5000 offer with a drop of $100,000.  The clever defense lawyer moved up another $5000 and was surprised to get another $100,000 drop in exchange.  Though there was an obvious slowing at a certain point, the seemingly futile dance had begun, resulting in a mediator's proposal within a field that had been considerably narrowed against what would otherwise appear to be great odds.

Yes, I'd say showing up to the dance is only the first step.  After that, you actually have to get out onto the dance floor and take those first risky, uncertain steps before the rhythm of the music takes over.

Friday, March 7, 2014

How do you Handle the Self-Represented Litigant in Mediation?

This week, I had two hearings with unrepresented Plaintiffs.  These can be doubly vexing when the Lawyer representing the Defendant attempts to bully the Plaintiff by his/her superior knowledge of the process and the law.  Just as on the playground, I find that bullies do not usually win out in life, though they can certainly inflict some pain at the moment.  When these challenges come, I summon up as much emotional maturity as possible and make sure to be extra-deferential to the Plaintiff.  In other words, without taking the side of the "victim", the mediator or arbitrator can add some extra formalities to the process to ensure that the unrepresented litigant is afforded due process and that all of the rights he has are being fully asserted.
In one case, I was confronted by 48 witnesses who had been subpoenaed for an arbitration by an unrepresented Plaintiff.  The lawyer for the employer cried foul and asked that I exclude all of these witnesses as duplicative and unnecessary.  That was a bully tactic and backfired on her.  Instead, I spent another hour going through each one's proposed testimony before limiting the Plaintiff to one witness per category (for a total of 5).
Beware the Bully Lawyer in an attempt to Mediate a Litigated Dispute
Beware the Bully Lawyer in an attempt to Mediate a Litigated Dispute
Litigators know that some of the most dangerous and challenging cases can be those brought by a self-represented litigant who wants to avenge his wrongdoers in ways that may go well beyond the realm of the law.  But I say "bully beware":  the reason these are so dangerous is because mediators, arbitrators and even Judges will generally be extra deferential to the pro se litigant.
How do you handle negotiation or litigation against someone who is self-represented?

Friday, February 28, 2014

View from the Middle of the Road: It Ain't Over Until it's Over: Keeping Everyone P...

View from the Middle of the Road: It Ain't Over Until it's Over: Keeping Everyone P...: This week, I presided over two hearings where the parties were in a hurry to leave.  In one, the case was settled, but in our collective ...

It Ain't Over Until it's Over: Keeping Everyone Present during Mediation

3-professionals-2This week, I presided over two hearings where the parties were in a hurry to leave.  In one, the case was settled, but in our collective haste, not one of the parties or their lawyers caught the fact that the short-form settlement agreement expressed an agreement to pay $00.00.  This left the Plaintiff's lawyer concerned enough that the following day he sent an email revoking his client's acceptance of the offer!  Of course, all is well and the Defense lawyer agreed that this was an error, not a con, but it still gave me pause for concern about the quick exit made by everyone.
Then the next day, the Plaintiff accepted a mediator's proposal and then left the hearing to pick up her child before the Defendant accepted or rejected.  He did reject, but when I communicated his counter-offer to her lawyer, she was unreachable and I had no choice but to excuse everyone until Plaintiff's lawyer could discuss the counter-offer with his client.  After everyone left, I was unable to reach any one other than the lawyers.  The hard work and close-to, but not yet completed negotiation virtually fell apart because the process had completely changed once all communication was filtered through lawyers and telephones or worse yet (in my opinion) email.
Just like the children's game of "telephone", something is invariably lost in translation when communication is anything other than face to face.  What's more,  the parties lost out on the valuable momentum that was built up during the mediation.  How do you keep the parties physically present until the case is completely resolved?

Friday, February 21, 2014

How do you manage emotions and tempers in mediation?

In mediation, there are often moments when we become coaches through difficult, emotional moments.  At those times, I find it is helpful to take a lesson from addiction counselors.  They call it "SOBER" breathing and it works like this:  Stop, Observe, Breathe, Evaluate and then Respond.
SOBER-smallWhat techniques have you used or observed to be effective when emotions erupt and tempers flare?

Friday, February 14, 2014

Do you Engage Your clients in a True Risk/Benefit Analysis in Mediation?

jan frankel Schau     In the theme of Valentine's Day, I attended a networking meeting of a group of lawyers today who almost  uniformly reported that what they loved about their jobs was bringing solutions to their clients who presented them with a wide array of legal problems, ranging from tax indebtedness to estate planning to white collar crime to divorce.

     In mediation, my experience is that few lawyers take the time to objectively analyze the risks and benefits of proceeding with the lawsuit which they have been engaged to zealously prosecute by clients who are less well equipped to analyze the risks and benefits associated with litigation.  Enter the diplomatic mediator who can help analyze the unspoken risks, the non-monetary benefits to your client.

     A sensitive and professional third party neutral can assist you and your clients in that difficult conversation which you may have fastidiously avoided since the client hired you.  What does success look like and how much is your client willing to sacrifice or risk to get there?
P.S.:  I am now blogging on my own website.  Please look for future entries at:

Friday, February 7, 2014

Is it possible to be Multi-Partial, not Impartial in Mediation?

     Sometimes I feel like I am being torn in two.  My "empathy" quotient goes up so high that I truly feel like I am on each side of the dispute I am mediating for the time I am in each room.  Then when I go into the other room, the other side wins me over completely.  Is this the kind of neutrality that is effective to settle disputes?  How do others keep themselves from being multi-partial, or is it actually a good quality to have when the facts or issues call for it?
     Last week, I mediated a dispute arising out of an allegation of disability discrimination by a long-term employee against a small business.  I empathized with the Plaintiff, because she had loved the job and got no full or legitimate explanation for why she was terminated, leaving her lawyer to conclude the stated reason of insubordination was pretextual and the real reason was her recent diagnosis of an old injury, which now required surgery.  In the other room, I truly empathized with the employer, whose office manager had made a quick decision in reaction to an argument with the employee and who now was looking at paying many multiples of the Plaintiff's salary to avoid a trial on this case.
     I am confident that at the end of the day, both clients and both lawyers saw me as their champion--and the key to a successful negotiation.  I was able to confidently reassure them that the result was fair in the scope of the litigation before them.  But is that what neutrality is supposed to look like? Is a mediator supposed to remain neutral and impartial or is it actually more effective to be "multi-partial"?

Thursday, January 30, 2014

How do you Use a Written Evaluation of Likely Damages Effectively in Mediation of Business Disputes? ?

    Numbers have their own mystical language and I find that sometimes writing out the most likely, least likely and somewhere in between outcome in a business case can be a useful vehicle for further discussion. 
     After I elicit the parties best estimates of those figures, I can project a range of most likely outcomes.  For example, in the lawsuit arising out of an allegation of damage to manufacturing equipment due to a leak at a warehouse, I was able to project that if the property proved to be a total loss, after the salvage value of about $50,000,  the owner would be left with a hypothetical loss of $250,000 (since he claimed the depreciated value of the equipment was $300,000.). 
     On the other hand, if the equipment could be restored, at a cost of $25,000 and resold at a discounted price of $200,000., the loss would be only $75,000.  ($300,000 less $225,000 for costs of repair less purchase price).  The third possibility was that he could use the machinery himself once it was restored, making the loss only $25,000.00 (the cost to restore to it's full value of $300,000.).         
     After assessing these values, the analysis goes further to assess the likelihood that each occurs.  In my example, the lawyer and I believed that there was only about a 10% chance the machinery would be a total loss. The settlement value of 10% of $250,000 turned out to be $25,000.  On the other hand, we agreed that there was a 50/50 chance that he could re-sell the property, making the settlement value approximately 50% of $75,000.  The chance that the only loss would be the cost of repair, or $25,000 was again only 10%, making the settlement value $2,500.00.  By assessing these potentials, and writing them out, the numbers demonstrated that if the case could be settled at something between $25,000 and $75,000, the Plaintiff would have achieved his goal of being compensated for the most likely amount of loss occasioned by the leak at the warehouse.   Whereas he arrived at the mediation assuming his case was worth no less than $250,000., he left feeling fine about a settlement of $60,000. based upon this careful analysis.
     This technique is particularly useful where, as here, there is a language barrier and the concepts are translated but the numbers are too quickly glossed over.  Somehow seeing these numbers throughout a long day's mediation can achieve a magical consensus on the value of settlement in a business dispute.
     Do you find a written number analysis useful in your mediation hearings?

Thursday, January 23, 2014

Do you ever hold a Late Day Joint Session to Save a Dying Deal from Impasse?

Sometimes after a long day of bonding and commiserating, I get a sense that the lawyers are so busy posturing for their own clients that they get stuck in an argument they no longer believe in against "the enemy" in the other room.  Joint sessions at these junctures are risky business.  Still, I find it is worth taking that risk when real signs of an impending impasse seem to be looming. 

Last week, after 9 hours of negotiation on a case that had an initial demand of $500,000 and an initial offer of $15,000, the Defense offered a "last, best and final" offer that was well below the last mid-point of the proposed bracket that was on the negotiating table.  Hypothetically, Plaintiff was hinting that she'd take $200,000 by offering to bracket the negotiation at $100,000 and $300,000. and Defendant instead offered a randomly chosen $127,500.  At that point the lowest actual demand by Plaintiff had been $350,000, though it was apparent that the mid-point of their range would be $200,000.  Rather than present that offer myself, I invited the two defense lawyers to meet with the two Plaintiff lawyers (without their respective clients) and present the offer themselves.

I was not so very surprised, but pleased when the Plaintiff lawyer kindly stated that his team wanted to settle the case, couldn't accept that offer and was willing to stay to see if there was a number which all could live with that evening, rather than risk losing the deal after so much progress in narrowing the chasm between them had been made.  This was a gentlemanly hint that the gap between $200,000 and $127,500 could be bridged if they worked at it.  The defense counsel, to their traveling client's chagrin, agreed to stay for another hour to continue to negotiate, beginning with the terms of a long-form agreement which had heretofore seemed unattainable.

It only took another hour to move the Defendant up ever so slightly to $135,000. but at that point Plaintiff was satisfied that she had really gotten the best deal possible at the mediation.  And most of the non-monetary terms had already been agreed upon by then, too.

It's risky business, but I find that late day joint session between opposing counsel without clients can be worthwhile where the attorneys are urging settlement to their clients and feeling somewhat discouraged that the parties can reach an agreement based upon the negotiation at hand.

Friday, January 17, 2014

How does a Busy Mediator Stay Fully Engaged in each Case?

One of the struggles I have when I am as busy as January has become is to fully attend to each case and essentially be "an empty vessel" so that I can listen deeply to the parties in conflict, without pre-judgment or bias.  Like a good psychotherapist, a mediator's job is largely to listen, empathize and reframe in such a way that the disputants to any given conflict feel genuinely heard and understood.  It is only after that exercise and effort that the mediator can help each side to see the other's perspective and be truly creative in addressing each side's claims and underlying interests.

Last week, I attended a Networking meeting lead by a colleague and friend, Mark Fingerman, who also teaches Yoga and meditation.  He challenged the lawyers present to give meditation a try.  Together, we sat erect in our conference room chairs, eyes closed, attentive only to our own breathing.  After three minutes, chimes sounded and we opened our eyes.  It sounds too easy to have been true:  but somehow I felt a little more genuine in my listening to the life story of the Plaintiff in a wrongful termination case that came before me that day.  I heard (through a translator) about the plight of a man who had experienced an extraordinarily challenging life.  He came to the U.S. on a boat from Viet Nam during the war in the 1970's.  He suffered horrible losses during that trip:  family members drowned and others were too weak to survive the journey.  He struggled to gain U.S. citizenship and employment here--with no English skills when he arrived here.  He was now the sole care taker for a disabled (adult) child and had been out of work for over a year. 

My morning meditation (only 3 minutes!) gave me the calm and legitimate "presence" to listen deeply to a point of view which I cannot personally know, given my own experience as an American born, college educated, empty nester.  Having calmed myself early in the morning, I found I could attend to the difficult facts and truly empathize and engage with this Plaintiff.

I am certain it is not the only way, but for me, so far, meditation has been a simple, but effective tool to empty my mind of my own personal clutter and fully attend to those in conflict before me.  And today I worked my way up to 4 minutes!

Friday, January 10, 2014

How do You Manage Multiple Defendants?

I was up late last night mediating a challenging case where an employee sued her former company after it had been sold to another Company.  Though the first company had sold all of it's assets, there was a contract that specifically stated that the successor company did not purchase or assume any of it's liabilities.  Luckily, there was some insurance coverage for the old company, since it no longer had any assets and was defunct. 

After a full day of negotiation, the Plaintiff and defendants collectively agreed to my mediators proposal.  Then the real drama began.  Although the defendants had spent a full 8 hours together in a single conference room, the dynamic suddenly shifted when the standard terms appeared on the short-form agreement:  "each party to bear its own costs and fees".  Though all of the defendants were delighted to settle the case against Plaintiff, there was an express indemnity agreement which legally gave rights to the new company to look to the selling company, Plaintiff's former employer, for indemnity.  And their costs were huge!

At 9:30 P.M., after Plaintiff had signed the agreement and left the office, I found myself looking at faces like those above.  While I was circling between rooms and mobile phones, discussing the ramifications of holding up the settlement to pursue recovery of costs with out of state clients and senior partners, the mood was getting darker and the other participants angrier.

After a relatively sleepless night, I did get confirmation that it had worked out and there was a full release made.  Still, I clearly could have and should have raised this dark issue as a potentiality long before the final agreement was being signed.  I guess the lesson is not to make any assumptions that standard terms will be agreeable in any settlement agreement.  Everything is subject to negotiation.  I just wish those negotiations could be conducted before sundown.

Friday, January 3, 2014

Lessons Learned from Negotiating to buy a new car

     This week I negotiated to buy a new car.  After over thirty years of marriage, this was the first time I did all of the negotiation and took title on my own.  I was struck by how many techniques the salesmen used to close which are also employed by the astute mediator.  Here's how it went down. 
     First, the salesman offered to let me take the car out for a drive.  He had some confidence that this car would "sell itself".  This was a little rapport building.  Then, he searched his computer for a car that met our wishes in terms of color and features.  This was the information gathering stage.  While he did that, he offered us expressos, pastries and even sandwiches.  He kept us there and kept us happy. (We were at the dealership for over two hours on Monday and about three hours on Tuesday.)
     Next, he offered to take my old car in trade at a certain (low) rate, even though it was in the shop for repair with an unknown problem.  We developed a mutual, collaborative process at this point to figure out how I could get rid of my old car and swap for a new car effortlessly and at the least expense.  There was a nice rapport going and even a bit of distributive bargaining on the terms of the purchase and sale.  This was about 4:00 PM, and as is typical in the negotiations of lawsuits as well, things got a little challenging and I needed a break to discuss the pros and cons with my husband.  We left and promised to be back in touch later in the day.
   Then we hit a snag.  The next morning, my husband took my car over to CarMax and sold it at a 20% higher rate than the salesman was offering. 
     Sometimes a particular new development arises in a negotiation which changes the terms entirely.  In those instances, though the negotiating parties may want to follow their instincts and forge ahead, it is better in fact to take a step backward and re-assess.  I had superior bargaining power at that point because I wasn't asking the dealer to take my old car (with 71,000 miles and out of warranty) in trade.  I was able to negotiate a better rate and higher mileage on the lease.
     Now it was New Year's eve and insurance offices and finance offices were closing every hour all over the Country.  My car had been sold and I wasn't sure we could get the deal done on the new one before the New Year's holiday.  I knew, however, that the salesmen wanted to make it happen to boost their 2013 sales.  Another advantage! 
     We got several levels of Managers involved in order to close the deal by 4:00 PM on New Year's eve, overriding their initial offer on higher financing costs.  Clearly, the collaborative process and information exchange which began the transaction served us well as the final details were completed.  And my negotiating skills were completely transferable.  Triumph in four wheels!