As I prepared to discuss the mediator’s proposal with our executive team and the COO the next day I realized my client might have painted himself into a corner — after a good night’s sleep I was confident he would want to change his mind, but sometimes it’s not that easy.

Only Two Ways to Get the Case Settled

I debated how to settle the case that day, and there were only two ways to get it done: with my COO or without him. I could gather the facts and work to persuade the executive team over his objection, or I could get the COO to revisit his decision before the call began. The fact that I recommended the deal would carry a lot of weight with the team, but my client’s COO was his boss’s right hand for a reason. And even if I “won” this one, we had an ongoing relationship to preserve. The choice was easy.

The COO wasn’t irrational and he wasn’t a stranger to big disputes, but he had said “no” rather emphatically. While I suspected he’d want to change his mind, clear, public statements are hard to retract. I have written about the decisionmaker’s need to save face before, and the concept as articulated by Fisher and Ury certainly applied here:

Often in a negotiation people will continue to hold out not because the proposal on the table is inherently unacceptable, but simply because they want to avoid the feeling or the appearance of backing down to the other side.

My decisionmaker would want to avoid any appearance of backing down to his lawyers, to the mediator, and to his executive team. I needed to give my COO a way to change his mind.

Saving Face With New Information

There had to be a reason we disagreed the day before. As I looked through my notes to retrace our steps, I realized my COO had based his decision in part on a “fact” we learned at mediation. As he had flown home the night our mediation ended, the rest of my team had dissected the day and realized that this important “fact” couldn’t be true — an idea we had explored late in the day to keep the parties’ relationship alive just wouldn’t work.

We had found the key to get the deal done.

I called the COO in advance of the broader executive team conference call, and it was clear he was preparing for a fight. Immediately he began to justify rejecting the mediator’s proposal. At that point — before he dug in too deep — I gave him the new information the rest of the team had realized the night before. In a few short minutes we had agreed to jointly support the mediator’s proposal. A settlement of one of the company’s biggest cases ever came that afternoon.

Use a little new information the next time someone on your team needs to save face. You’ll be glad you did.

Godin has written more than a few books already, but his recent Zen Unicorn is a great idea.  It simply rolls up some of the best posts from his blog over the past 3 years and presents them in a click-free, Kindle-only ebook.  Four of those posts, and why they’re relevant to mediators, include:

Make something happen

“The best time to plant an oak tree is 20 years ago, and the second best time is now.” I don’t know who said it, but it certainly applies to marketing.  In Make something happen Godin tells us to “make something happen today, before you go home,” and it’s great advice.  Today is the day.  Write a guest post, propose an article, begin to manage your digital footprint, hire a web designer, get listed on Mediate.com, or whatever.  But make something happen today.

This must be hard

As a mediator, do you follow up with your mediation clients after they leave your conference room?  Godin asks a great question more mediators should think about in This must be hard:

The fancy restaurant knows my phone number. Why not have the owner call me the next day just to ask [how my dinner was]?

The day after your next mediation, try an experiment.  Call the counsel who were involved.  If they settled, ask about something they care about.  Are the final documents are getting signed?  Is the press release ready?  Or whatever it takes.  And if the case didn’t settle, maybe your call will reveal the nonsettlers’ remorse I mentioned here.  Stay with the case and push until it’s done.  I assure you this will set you apart from other mediators.

The most important rule

How do we judge mediator success?  In The most important rule Godin tells us:

By a factor of three, what you do is not nearly as important as how it makes people feel.

Settling cases is hard, and you can’t succeed in the mediation business if you’re not good at it.  But assuming you’re good at what you do, what keeps people coming back?  It’s a feeling — the feeling of intense loyalty we get when the mediator does the things they don’t teach you in mediator school.  A few suggestions:

• Mediation briefs. The parties have been living with this dispute for a long time.  Carefully read — and understand — the mediation briefs in advance so everyone understands from moment one that you care about their case.  You’d be surprised how often this step is skipped.
• The participants. Do an Internet search so you understand who will be in your conference room before they get there.
• The parties. Understand a little about each party before the mediation starts.  15 minutes with Metacrawler or a Google Advanced Search is all you need.
• The process. Look at your own website from the perspective of a party who got the link to your bio from her lawyer last week.  Does your site help her prepare for mediation day?
• You. I once heard that, if given the choice between two mediators who have the potential to settle their case, the parties and their lawyers will pick the mediator they like better.  I can’t disagree.

Discovery

In Discovery, Godin touches on a lesson more veteran mediators could use: “Every person who encounters your organization for the first time comes with a beginner’s mind.”  Your newest client might have seen your bio, but she doesn’t know about the big case you settled last week or the hundreds or thousands that came before her — and she might not know much about mediation, either.

Today is the day many of the people in your conference room will discover you.  Think about the other Godin insights in this post and on his blog — your new client might not have met a mediator that follows up after mediation day, your new client might not have met a mediator who cares how they actually feel, or your new client might not have met a mediator that walks them through the mediation process on their website.  What will you do to help her discover something different?

Make something happen today.  You’ll be glad you did.

(For those of you who like Seth’s Perspective, note that his newest book, Linchpin:  Are You Indipsensable? will be available later this month.)

While that first post of 2009 seems like only yesterday, a lot has happened since then.  Through it all many of you have subscribed to, commented on and forwarded the posts you have seen here, and for that I cannot thank you enough.

In addition to the active readership we have at Settlement Perspectives, several prominent bloggers and publications have linked to our posts.  Following up on a great idea I saw earlier this week on the Loree Reinsurance and Arbitration Law Forum, I take this opportunity to highlight many of those blogs and publications as a way to say “thank you”.

Decision Tree Analysis And More

Early in the year we did a series on decision trees and how to use them more effectively in mediation and litigation.  The series generated some interesting discussions, including:

• The National Law Journal’s “Corporate Warfare Has to Make Business Sense These Days”, written by Michael Cavendish — a business litigator who knows what questions to ask and who understands where the practice of law is headed;
• Litigation Accounting for In-House Counsel at the IP ADR Blog, now Commercial ADR – Commercial Solutions to Justice Problems, which is a new initiative from talented trainer and mediator Victoria Pynchon;
• Diane Levin’s post A round-up of must-read articles for professional mediators, which highlighted Decision Tree Analysis in Litigation:  The Basics at her ever-insightful Mediation Channel blog;
• The Strategic Mediator’s article Mediation Preparation – Don’t Forget Your Decision Tree, which focused on Settlement Perspectives’ two-part interview with Marc B. Victor, who pioneered the application of Decision Tree Analysis to litigation in the 1970s; and
• Strategic Legal Technology’s The Inhouse Perspective on Litigation Risk Analysis and Decision Trees, which also highlighted our discussion of mediation mind maps.

Early Case Assessment

ECAs are always a popular topic, and this year was no exception.  Notable discussions included:

• Clearwell Systems’ article How to Reduce Electronic Discovery Costs Part III:  Early Case Assessment, which underscores the point that “early case assessment is a different approach to litigation”;
• Settle It Now’s article Best Early Case Assessment Practices;
• Don Philbin’s new ADR Highlight Reel, which recently linked to our latest post on the ECA Toolkit; and
• John Lassey’s interesting post on Impasse at Mediation Stuff.

Blogging and Web 2.0

I may be a bit behind the curve on Web 2.0, but it’s clear we’re all learning together.  The conversation has recently included:

• InsideCounsel’s “Using Web 2.0 to Advance Your Career”, which we followed up with In-House Legal Blogs, Social Media and Web 2.0:  Can They Advance Your Career?;
• Settle It Now’s Developing Your Business Without Spending a Dime — which includes marketing tips from one of the best in the business;
• Diane Levin’s Recommended reading:  24 alternative dispute resolution blogs to follow, which kindly listed Settlement Perspectives among some great ADR blogs out there, as well as Only Connect:  The Impact of Blogging on ADR in the ABA’s Dispute Resolution Magazine and Diane’s World Directory of ADR Blogs, which is a longstanding public service to the ADR community;
• The Strategic Mediator’s Blogging – Have You Gone There Yet? by Sandra Upchurch, whose “soccer mom” post on competing perspectives highlights how everyday lessons can be used effectively in mediation; and
• Strong Connections, a post on the Settlement Perspectives Newsletter by my friends at Unit Interactive.

Insurance Coverage

Late in the year we joined the discussion on insurance coverage from the policyholder’s perspective.  Follow-up included:

• Stephen Goldberg’s impressive Catastrophic Insruance Coverage Blog and “Common Sense Sometimes Wins the Day”;
• Victoria Pynchon’s  Commercial ADR – Commercial Solutions to Justice Problems, which cited Insurance Coverage: 4 Rules and 10 Tips for Policyholders in her post An insurance coverage negotiation case story; and
• Philip J. Loree, Jr.’s recent post Some Helpful Rules and Tips for Policyholders and Cedents Courtesy of Settlement Perspectives at Loree Reinsurance and Arbitration Law Forum.

Other Topics and Sites

• Our friends at Mediate.com continue to list and promote Settlement Perspectives on their Featured Blogs Page — with an area dedicated to our posts here;
• Jeffrey Krivis and Mariam Zadeh at First Mediation did a great post on The Confidential Listener Technique, which expanded on the blind bidding enhancement concept we discussed early in the year;
• Christopher Annunziata at CKA Mediation & Arbitration wrote Exchange Your Bottom Line Blindly? in an effort to further explore the blind bidding enhancement concept;
• Settle It Now furthered the conversation about mediator’s proposals in Mediator’s Proposals:  the Good, the Bad and the Ugly;
• Legal OnRamp continues to feature Settlement Perspectives and other legal blogs;
• Keith Jones’ article The “Judicial Hellhole” Label and Managing Expectations at Mediating Certainty elaborated on managing expectations in an important context;
• Our friends at the Commercial and Industry Arbitration and Mediation Group on LinkedIn, and
• Philip J. Loree, Jr.’s post with the great idea for this one — Acknowledging Some Kind Mentions from Our Fellow Bloggers — deserves a second mention.

As 2009 comes to an end, I will close as we began.  Thank you, and Happy New Year.

When the big case comes in, will you be ready for it?  As you work to better understand your story, lock down your documents, and brace for the PR impact, what else do you need to worry about?  Unfortunately insurance coverage is often way down the list — a mistake most don’t realize until it’s too late.

Recently the ACC Docket featured a piece that Wendy Toolin Breau and I coauthored on managing insurance relationships in the midst of significant litigation, entitled “‘Bet the Company’ Litigation from a Policyholder’s Perspective”.  Although you may want to read the entire article when your next big case comes in, the 4 rules and 10 tips we discuss appear below.

Preserving Insurance Coverage:  4 Rules

Insurance is a practice area unto itself, and there are few rules that apply in all situations.  But I have never seen an exception to these four:

1. Always act like a reasonably prudent insured. When confronted with a decision, what would you do if you were not insured?
2. Never try to outsmart yourself. Never rely on colluding with the plaintiff to secure coverage, force an argument, or characterize one claim as something it’s not.
3. An insured cannot sue for bad faith without acting in good faith. How will your actions look with hindsight when the urgency has passed and emotions have ebbed?
4. Insurers hate surprises. Communication is key.
   

Apparently I’m not the only one who thinks this way.  As I discussed these rules with Philip J. Loree Jr. at the Loree Reinsurance and Arbitration Law Forum the other day, I learned that they don’t only apply to policyholders –  apparently insurers must live by these same rules to collect from their reinsurers:

You would be surprised how frequently reinsurers contend that the carrier colluded with the policyholder in direct insurance coverage litigation. If the reinsurer can establish collusion concerning the fact, amount or allocation of coverage, or if the reinsurer otherwise shows that the carrier acted in bad faith, then the reinsurer will usually be relieved of liability for the claim. Like policyholders making direct insurance claims, carriers making reinsurance claims need to avoid even the appearance of collusion or bad faith, and following rules analogous to yours helps them do that.

With these 4 rules in mind, there are a few more tips to guide your relationship with your carriers in major litigation.

10 Tips for “Bet the Company” Litigation

1. Know Your Policies and Your Carriers before a Crisis Arises. Knowing the policies — including where they are — is critical, but having a personal relationship with my carriers is yet another Secret the Two Million Miler Club Taught Me.
   
2. Know Your Case.  And Know It Early. Yet another reason we have an entire series on Early Case Assessments.
   
3. Once Disaster Hits:  Notice, Notice, Notice. No insured can afford to have a “foot fault” when notifying its carriers, but it happens all the time.
   
4. Know Your Coverage Issues before the Case Progresses. Coverage is neither easy nor intuitive — for me, coverage counsel is often the best option.
   
5. Know Your Team. How often have you taken a few months to get to meet everyone on your team — defense counsel, coverage counsel, internal witnesses, experts and more?  Wouldn’t they have worked better together had they met early in the case?
6. Overcommunicate.  Early and Often. Establish a regular communication protocol, comply with it, and go beyond it.
7. Agree.  Or Agree to Disagree. Sometimes you have to litigate your case while the coverage discussion proceeds, but avoid it if you can.  If you can’t resolve your coverage issue early, follow these 4 rules and 10 tips and it’ll make your life much easier.
8. Settlement:  It’s Never as Easy as You’d Think. Remember that your carrier will have rules and protocols about how settlements can be approved, and in what amounts — and it’s never a quick process.
9. Simultaneous Settlement Talks and Coverage Negotiations:  It Can Be Done. This isn’t for the faint of heart, but you can solve for more than one variable at one time.  If you plan to mediate both disputes simultaneously, a mediator experienced with complex insurance issues — who can also address the merits of the underlying case — is a must.
10. Resume Your Relationship with Your Carriers and the Insurance Markets When Your Case is Done. This just reinforces tip #1, above.

When your next big case comes in, think about these 4 rules and 10 tips, and take a look at our article for more detail.  You’ll be glad you did.

Last week we discussed why a small group is usually a better audience for bad news in Delivering Bad News:  How Big Is Your Conference Room? Yet if small group delivery is not an option, what else can you do to get a difficult message across?  Three tactics come to mind.

Manage Expectations

Long Before the Mediation Starts. Last year I wrote Managing Expectations:  An Unexpected Lesson on the Bus to Hertz, and the lesson holds true in conference rooms, too.  Not so long ago I had a case against an online retailer whose CEO enjoyed an irrational confidence in his case. With our mediation just a month away, I knew we had to move the CEO much closer to reality to get the case settled.  Rather than surprise him at mediation with documents and bad facts he hadn’t yet seen — like the guys in my post last week did to me — I spent a great deal of time assembling a letter to the other side that carefully walked the CEO through the evidence in advance.  While it took a lot more than a letter to settle our case, the CEO’s ability to see the dispute from my perspective was an essential first step.

Why Manage Expectations in the First Place? We have discussed why managing expectations is so important here and here, and Phyllis Pollack has a a great post on it, too, but to sum it up you should manage the other side’s expectations when you can so your opponents will be able to:

• warn others with a stake in the outcome early – their shareholders, their bosses, their insurers, their spouses and more;
• decide whether the amount of time, money and effort to be spent on the case needs to be adjusted; and
• get used to the idea themselves.

The last of these bullets leads us to the concept of acceptance time.

Build in Acceptance Time

You’ve heard it before when bad news arrives:  “He’ll get over it,” or “Time heals all wounds.”  That’s because bad news takes time to process — acceptance time, according to Chester Karrass on Negotiation Space:

In any negotiation both parties walk into the negotiation with what may be somewhat unrealistic goals. Each party might have misconceptions and bad assumptions. During the process of negotiation . . . we discover that some of our expectations may not be met. Some of our wishes go away and some things may be impossible at this point in time.  . . .

Can we as negotiators expect the other party to adjust and accept new and undesired realities immediately? Of course not. Resistance to change is universal. It takes time to get used to ideas that are foreign or unpleasant.

While you can find our earlier discussion on acceptance time here, the ultimate point is this: Since it takes time to get accustomed to bad news, consider delivering your bad news in advance of your negotiation session.

Allow the Other Party’s Negotiator to Save Face

Saving Face:  The Concept. The negotiator’s need to save face is simple, yet it remains one of the most underestimated factors in negotiation:

Often in a negotiation people will continue to hold out not because the proposal on the table is inherently unacceptable, but simply because they want to avoid the feeling or the appearance of backing down to the other side.

Fisher and Ury’s words — and the rest of Getting to Yes — are almost 30 years old, but many still hope to embarrass the other side with a big reveal of bad news as the parties get together.  Their efforts would be better spent helping the other side save face than lose it.

How? The best way to help the other side avoid losing face is to manage expectations and build in acceptance time, discussed above.  But there will be times when the parties are across the table and bad news has to be delivered on the fly.  If you can, ask for a break and walk down the hall with the other side’s negotiator to tell her the news while everyone else scrambles for the conference room cookies — this built-in break will itself allow her to manage her own team’s expectations, as well.

If you must deliver bad news real time . . .. If you must deliver bad news to the other side in real time, think about how you deliver it.  In a recent post, Negotiation Space gives us suggestions on phrases that can help the other negotiator save face.  While I like theirs, the following are a few I have used — with sincerity — in the past:

• “We’re all working real time here, but you should know that I just learned . . ..”
• “That’s what I thought at first, but we were able to interview Ms. [Smith], and she tells us . . ..”
• “My math was a little different.  If I can walk you through how I got there maybe we can figure out where the discrepancies are.”
• “I see where you are coming from, but when we looked at it we saw . . ..”

As always, this is a nonexhaustive list, but there’s a theme here:  The other side’s negotiator gets a pass for not knowing what you’re about to say — so her team will work with her to solve the problem rather than spend time wondering why she didn’t know the bad facts before now.

Find a way to deliver your bad news more effectively.  You’ll be glad you did.

The conference table had 40 chairs, and my client’s team filled almost half of them.  We had been asked to show up with the folks needed to get a deal done, and the backchannel weekend chatter had all been positive.  As the meeting began, our optimism crashed as the other side went on the attack, denying my client’s most important request and questioning why it had ever been included.

People usually need to hear the truth whether it’s convenient or not, but there’s more than one one way to convey a difficult message.  How often have you seen someone delight in dropping bad news onto the conference table as the meeting begins?  The adrenaline rush might satisfy some, but does this approach do any good?

Thank You for Your Interest

The lawyer who delivered the bad news to my team that day prided himself in his aggressive persona, and his performance was true to his reputation.  Unfortunately his glee was short-lived; my team and I worked night and day to avoid a deal with him, and we succeeded.  I wonder if he’ll ever realize what a disservice he did his client.

Public Praise, Private Reprimand

Negotiation is tough, and bad news is inevitable.  Sometimes the answer is “no,” the facts aren’t always convenient, and any deal to be reached has to account for it all.  But think before you fire back with uncomfortable facts — as Nancy Hudgins has explained in posts here and here, bullying gets no one closer to closure.  As you respond to the other side, you may want to keep the words of Vince Lombardi in mind:

Praise in public; criticize in private.

Lombardi’s advice might not have been directed at negotiators, but his approach works here — I’ll modify his message to say that a small group is usually a better audience for bad news.  “Success has many fathers, while failure is an orphan” is a proverb for a reason — people want to be associated with success, and they don’t want to be tied to failure.  At the moment you deliver bad news — whether you reject the other side’s offer or reveal evidence that undermines their position — a large group across the table will become more defensive than productive.

So Who Needs to Be in the Room?

Other than your need to have people with dealmaking authority in the room, why do you care who the other side plans to bring to a settlement meeting, a mediation, or a deal negotiation?  You don’t have to subscribe to the butterfly effect to realize that every person at the table impacts the negotiation in some way — I have watched individual plaintiffs overreact to bad news because their spouses are present, I have seen lawyers bristle at minor inconvenient facts in front of their clients, and I even noticed one witness unable to deal with bad facts when an attractive law clerk appeared at his deposition.  Think about that as you demand the other side bring a second insurance adjuster, two more folks from the home office, and the CEO to the mediation.

Are there occasions where a big group needs to hear bad news?  Absolutely, but almost never when a deal needs to get done quickly.  Think of first grade:  When Miss Haskins wanted to tell you how bad your handwriting was, did she reveal your Big Chief tablet to the entire class, or did she chat with you about your (terrible) penmanship when no one was around?

The next time you have bad news to reveal, get a smaller conference room.  You’ll be glad you did.

“In 60 days . . . you will know 80 percent of what you will ever know about a case.”  PD Villareal’s quote was critical to our efforts to define Early Case Assessment in 2008 as we started our series on ECA, and we’re always happy to hear more from him.   Fortunately, an interview with Villareal in this month’s Metropolitan Corproate Counsel gives us just that.

CPR’s Early Case Assessment Guidelines Revisited

In CPR’s ECA Toolkit – A Great Contribution to Controlling Litigation Costs, Villareal discusses CPR’s new ECA guidlines and Early Case Assessments on a broader level.  Villareal jumps right in to tell us how ECA differs from the status quo:

The thing about lawyers is that by mindset and by training, they will want to collect facts and analyze them forever because every additional piece of information adds to their understanding of the situation and to their assessment of the case.

Early case assessment imposes the discipline of cutting that process short. Experience teaches us that if you conduct a very good early case assessment . . . you will know 80 percent of all you will ever know about this case. Is that perfect knowledge? Well by definition “no,” but it is adequate and sufficient knowledge upon which to make decisions about the direction in which you want to go to resolve most controversies.

The Costs of ECA and More

In the interview, Villareal also responds to those who think ECA is too expensive (”ECA . . . represents expenditures that would have to be made later in any event”), and he walks through the elements of his Early Case Assessments at a high level (an “assessment of the facts,” “what’s at stake for the company,” and more), and he discusses CPR’s ECA Toolkit — all of which make the entire interview worth a read.  (And many thanks to Rees Morrison for highlighting Villareal’s interview at the Law Department Management Blog.)

Take a look at Villareal’s interview in Metropolitan Corporate Counsel.  You’ll be glad you did.

I don’t stray off topic often, but occasionally I do — with a warning.  This is one of those rare occasions where we won’t talk about negotiation, mediation or settlement strategy; feel free to scroll to the next post if that’s why you’re here.

This month InsideCounsel magazine published an article from the always interesting Mike Evers with a title that — for some reason — caught my eye:  Using Web 2.0 to Advance Your Career.  Although Mike admittedly says some nice things about Settlement Perspectives, he also gives us a rare recruiter’s-eye view of why in-house counsel might want to join the online conversation.

Why Manage Your Digital Footprint?

With the popularity of Legal OnRamp and LinkedIn and more, the opportunities to manage your digital footprint expand every day.  But many in-house lawyers aren’t convinced.  Isn’t there safety in anonymity?  Mike’s response is simple and direct:

For readers with privacy concerns, get over it.  Embrace the fact that your professional life is public.

And Mike is right.  I did an Internet search for a fellow in-house lawyer the other day and found only one hit.  Unfortunately, it was the court’s opinion in a case where he was a witness.  I sifted through the opinion and ultimately determined that he has nothing to hide, but it took time — time that would have been better spent reading his profile, articles he’d written, and other content he created.

While online anonymity might not be a choice any more, Mike gives us a few reasons to want to manage our online presence:

The point here is that Web 2.0 presents seemingly limitless opportunities to offer value, demonstrate expertise and cut across barriers that make new connections.  In short, you are no longer bound by the four corners of a traditional resume or directory listing.

Managing Your Digital Footprint — Where Do You Start?

I wrote about my experience with Settlement Perspectives over a year ago in Come on in, the Water’s Fine, and I’m still happy I took the plunge.  But you don’t have to start a blog to manage your digital footprint.  As Mike explains, a simple first step is to get comfortable with LinkedIn, which LawyerCasting has made easier with LinkedIn for Lawyers 101.  Next, you’ll want to find a place where you can add your thoughts and expertise — perhaps a comment on the ACC’s blog, In-House ACCess, Patrick J. Lamb’s In Search of Perfect Client Service, or Rees Morrison’s Law Department Management Blog.

But there’s more.

Your Online Image — Get It Right with Mitch Joel’s 8 Easy Steps

Until last week Web 2.0 was a matter of happenstance to most of us.  We got an invitation to Plaxo and filled it out, and we joined a LinkedIn group or two.  But last week I listened to Mich Joel’s audiobook Six Pixels of Separation, which highlights how any of us can proactively manage our online footprint.  While I can’t recommend the book highly enough, Mitch gives us a taste in How to Build Your Digital Footprint in 8 Easy Steps, posted earlier this year at Six Pixels of Separation – The Blog.

Mitch starts with “Create a Strategy,” because “your overall strategy . . . will become your lighthouse,” and he follows with 7 more steps any of us can track — steps that will become crucial as we all venture further into the online world we already inhabit.

So set your strategy, manage your online presence, and have fun.  You’ll be glad you did.

]]> http://www.settlementperspectives.com/2009/11/in-house-legal-blogs-social-media-and-web-2-0-can-they-advance-your-career/feed/ 4 http://www.settlementperspectives.com/2009/08/cpr-publishes-early-case-assessment-guidelines/ http://www.settlementperspectives.com/2009/08/cpr-publishes-early-case-assessment-guidelines/#comments Mon, 17 Aug 2009 03:01:27 +0000 John DeGroote http://www.settlementperspectives.com/?p=2133

You can’t settle your case before you know what it’s worth — or at least you shouldn’t — so we discussed why it’s best to value your dispute before settlement discussions start a few months ago.  This fact has driven an entire series on Early Case Assessments here on Settlement Perspectives, and it’s clear I’m not the only in-house ECA fan out there.

The International Institute for Conflict Prevention & Resolution, known also as the CPR Institute, has recently published CPR’s Early Case Assessment “ECA” Guidelines (2009), which are designed to “set forth a process designed to help businesses decide early on how to manage disputes, including identifying key business concerns, assessing risks and costs, and making an informed choice or recommendation on how to handle the dispute.”  They certainly meet their objectives.

CPR’s Early Case Assessment Guidelines

The guidelines themselves are divided into five sections, each of which deserves a read:

1. CPR’s Definition of ECA;
2. Benefits of Utilizing Early Case Assessment;
3. CPR Rationale for Developing the ECA Guidelines;
4. Setting the Stage for Successful Early Case Assessment; and
5. Utilizing the CPR ECA Guidelines.

Additional ECA Materials from CPR

Importantly, CPR’s Guidelines are backed by truly helpful resources in .pdf format, including:

• An Executive Summary that can serve as the template for your case overview;
• An ECA Flow Chart, which provides a succinct overview of the Early Case Assessment process;
  
• An ECA Detailed Analysis (”Long Form”) — a great resource that can be used alongside Settlement Perspectives’ Early Case Assessment Checklist;
• The entire package, under CPR Early Case Assessment “ECA” Guidelines;
• An article by John Lande, entitled “The Movement Toward Early Case Handling in Courts and Private Dispute Resolution”; and
• A DVD on Early Case Assessment.

Recent Press on CPR’s Early Case Assessment Efforts

CPR Institute President and CEO Kathy Bryan has followed up on these guidelines and CPR’s other efforts to make sure ECA stays at the top of the in-house agenda with a recent Metropolitan Corporate Counsel article.  Bryan provides us with a quote not unlike one you might have seen here on Settlement Perspectives before:

We think that the sooner early case assessment can be done – and it can be done 30 to 60 days after a complaint is filed – the greater the likelihood of an early resolution at minimum cost.

We couldn’t agree more.

Stop by the CPR website at http://cpradr.org/ when you can. You’ll be glad you did.

There’s something exciting about a war room as the big case turns toward trial, and ours was no different — witness notebooks, research files, box after box of “hot” documents, and a whiteboard with the latest graphic to explain it all.  After days in that war room we began to wonder:  Why won’t the other side settle?  How could they not understand how bad their case was?

A Fresh Perspective from Down the Hall

One of the firm’s senior lawyers wandered by the conference room and asked a few questions to break up the evening.  He listened to our quick pitch on the case, and sat down to probe a bit more.  Our stories were followed by one of his own — an old case whose plaintiff sounded more like our plaintiff than not.  The more we talked the better we understood where our opponent was headed.  If we didn’t do something quickly, we’d be in for a long summer.

This site has explored why you might want to manage the other side’s expectations before, and that’s what we did here.  We worked up the case we had originally intended to prepare, but we also focused the plaintiff on what his case wasn’t — now that we knew where he was going.  It worked.

Get Different Perspectives with a Partner Focus Group

No matter how confident you are in your case, is the other side asking themselves the same thing you’re asking about them:  “How could they not understand what a bad case they have?  Where are they headed?” In other words, is there a silver bullet you‘ve missed?

If you and the other side value the case differently, at least one of you is wrong. How can you make sure it isn’t you? In significant disputes, whether at the Early Case Assessment stage or later, the best way to find out is to ask someone who might see the world like the other side does — or a few such someones.  I have talked before about how companies might want to hire plaintiffs’ lawyers as their lead defense counsel under the right circumstances, but you don’t need to go that far.  In major litigation I supplement my own opinions with additional perspectives on my dispute from experienced trial lawyers who have no reason to filter their comments.

The Elements of a Partner Focus Group

We’re not looking for a formal focus group here; we’re asking a few partners for the “visceral, personal, unscientific reaction[s]” described by Seth Godin — uncut insights into your case, from trial themes to settlement strategies to great questions to ask in deposition.  In the past I have gotten there with a meeting that looks something like a very small focus group session, with these elements:

• 3 trial partners with varied backgrounds. Include a former trial judge if you can. In-court experience is a must, and real-world experience in front of your jury pool or an analogous fact finder will be a big help; subject matter expertise, such as experience with reinsurance disputes or technology cases, may be relevant in your case, as well; and experience on the side opposite yours is also a plus.
• Firms not connected to my case, either now or in the future. Law firms compete with one another, and your trial counsel may be worried she could lose this case to a member of the group you plan to convene; an explicit agreement that removes this possibility will encourage a more open discussion.
• A presentation on both sides of the case by my counsel. I have handled this the same way some jury research providers handle pretrial focus groups, including a one-hour(ish) presentation from the plaintiff’s side, a one-hour presentation from the defendant’s side, and a quick rebuttal from the plaintiff’s side, with all presentations supplemented by a handful of critical documents and other important evidence.
• Discussion of the case with me and someone else from my team. I’d like to have a cup of coffee, 1 on 1, with each of the lawyers serving on my focus group to get their immediate, uncut reactions to the presentation before we discuss it as a group — and there’s more time for individualized follow-up later, if needed.
• A joint brainstorming session about the case with all 3 partners and my trial counsel. Whiteboards, a round table and open discussion in front of your trial counsel on the underlying case can — will — generate the fresh perspective you need on your dispute.  Have a promising associate there to take lots of notes.

I searched the Internet for “partner focus group” and found one of my own presentations and little else that’s helpful, so I have no links to add to this list of things that have worked for me.  This can’t be new, so if you have formalized the process I’d like to hear about it.

Does It Really Work?

Does The Partner Focus Group really work?  I think so, but I asked Peter S. Vogel, author of the Internet, Information Technology & E-Discovery Blog and veteran of a significant focus group session of mine a few years ago, for his perspective on the process.  He responded:

I couldn’t have said it better myself.

To close, remember: This whole exercise is about differing perspectives. Use a Partner Focus Group to make sure your perspective isn’t off-base.  You’ll be glad you did.

This isn’t the Rule 68 Blog (despite our introduction to Rule 68 and an entire series on the rule already), but a recent article in the Minnesota Law Review merits a return to one of our favorite topics. Danielle M. Shelton’s recent article, “Rewriting Rule 68: Realizing the Benefits of the Federal Settlement Rule by Injecting Certainty into Offers of Judgment,” suggests how we can fix Rule 68 like our Civil Procedure professor might have wanted — but along the way it thoroughly explores uncertainties created by Rule 68 that litigators ignore at their peril.

Can Rule 68’s Ambiguities Drive Settlements?

Professor Shelton makes a few critical points about the uncertainties created by Rule 68 — and why lawyers for both sides should care:

Because the rule is cursory in form and does not alert the parties to its many nuances, defendants often are uncertain or misguided about how to draft a Rule 68 offer. Defendants often end up drafting offers that carry unintended consequences. Similarly, plaintiffs who receive Rule 68 offers face uncertainty. A plaintiff must decide whether to accept or reject a given offer, knowing that either decision carries consequences that hinge upon how a court will construe the offer or how a court will compare the offer to the judgment received at trial. (See pages 867-68; the emphasis is mine.)

Shelton then makes it clear why these ambiguities can drive settlements:

Because a plaintiff’s decision to accept or to reject the offer depends on how a court will construe the non-negotiable Rule 68 offer, any uncertainty about the court’s interpretation of the offer creates risk for the plaintiff. A risk-averse plaintiff will be particularly susceptible to the pressure of accepting a Rule 68 offer, even if the offer is unclear, lest she otherwise risk losing attorneys’ fees and paying the defendant’s costs later. (See page 875; the emphasis is mine.)

Thus the risk averse plaintiff’s lawyer may look long and hard at a Rule 68 offer of judgment for more reasons than we first outlined — the offer itself produces risk to her client, but uncertainties resulting from the underlying rule can reinforce the lawyer’s own need to settle, as well.

What Are the Uncertainties Created By Rule 68?

While Shelton goes into greater detail than we’ll go into here — with plenty of examples and case law to support her points — specific ambiguities she highlights include:

• Whether an offer of “$1,000, with costs” will result in a total payment of $1,000 or $1,000 plus costs if it’s accepted (page 879);
• Whether the offer includes costs when the offer makes no mention of costs at all (pages 888 – 91);
• Whether the offer includes attorneys’ fees (pages 896-908);
• What, exactly, those costs include (pages 879);
• Whether the offer may disclaim liability (pages 881);
• Whether the offer may be revoked (pages 883)
• How a rejected offer compares to the actual judgment (pages 911-16); and
• more.

Where Do We Go From Here?

To be clear, this isn’t a post about how to write an ambiguous Rule 68 offer; many of the gaps in the rule have been decided, and ancillary litigation over what an offer of judgment actually covers and whether it is operative does no one any good. But if Shelton is right — if Rule 68 offers create risk for those who receive them — perhaps the uncertainty and downside they create for plaintiffs and their counsel really can drive settlements.  At the very least, as we have discussed before, a Rule 68 offer is more likely to spark actual settlement discussions than no effort at all.

If you are a defendant, it’s time to master the uncertainties of FRCP 68 and offers of judgment to see if one would make sense in your case, and Professor Shelton’s article can help you get there.  You’ll be glad you did.

[In case you want links to all the posts in Settlement Perspectives' Rule 68 and Offers of Judgment Series, here they are:

• Rule 68 and Offers of Judgment, Part I:  How They Work and Why You Should Care;
  
• Rule 68 and Offers of Judgment, Part II:  Why They Work and How to Use Them;
  
• Rule 68 and Offers of Judgment, Part III:  9 Situations Where They Just Might Work;
  
• Claims for Attorneys' Fees: How Rule 68 Can (Sometimes) Help;
• Ambiguities in Rule 68:  Why Are They Relevant to You? (this post); and
  
• Rule 68 Offers:  A Few Sample Forms to Get You Started.]
  

Marc, people often say that the “inputs” on a decision tree — the probabilities of various outcomes — are imprecise.  One of the the comments to our first post on decision trees put it this way:

The theoretical problem is with the assignment of probabilities and their meaning. Unless you are just goofing around with numbers, the assignment of a probability to an event presupposes that there is a frequency of similar events to count. This is hardly ever true in litigation, unless restricted to something like employment dismissal cases. Even then, I have trouble interpreting the numbers as anything more than subjective probabilities, i.e. just goofing around with numbers.

Is this a fair criticism?

I don’t think so.  First, it’s not a question of probabilities being “precise” or “imprecise” — the idea is for them to be “realistic.”  Second, assignment of a probability does not presuppose “a frequency of similar events to count.”  A probability is simply a reflection of someone’s opinion of the likelihood of success in a particular situation.  Lawyers have always given opinions like these, even in one-of-a-kind cases — they’ve simply used phrases (such as “pretty good chance”) much more often than they’ve used numbers.  But because it’s very easy to show that the phrases are more ambiguous than the percentages, and because centuries-old probability theory tells us how to combine a 60% chance of success on one issue and a 25% chance of success on another issue to determine the overall chance of success (but doesn’t help us to combine a “pretty good chance” on one issue and a “definite possibility” on another), there are tremendous advantages in using the 0 to 100 scale rather than the “no chance” to “sure thing” scale.  I can’t help but think that if the person who wrote the earlier comment heard his or her doctor say “I’m ‘reasonably confident’ you’ll come through this procedure without any complications,” they would immediately ask for clarification:  “What do you mean by ‘reasonably confident’?  95%? 80%? 65%?”  Why should clients expect less from their attorneys?

Anything else?

Definitely.  The commenter suggests there is something wrong with subjective probabilities — that they are nothing more than “goofing around.”  I have a very hard time equating the rigorous process of developing a thorough List of Reasons (as discussed in Part I of this interview), and then expressing an unambiguous opinion regarding the chance of winning versus losing an issue, as “goofing around.”  Well-reasoned “subjective” probabilities are quite helpful — and are exactly what lawyers (and doctors and senior business executives and others) have always been hired for:  “Based on all of your experience and the information you have available to you counselor (or doctor or senior executive), what’s your best guess of my chances?”  And if the advisor has good judgment, then both theory and practice have shown that using his or her subjective probabilities to calculate probability-weighted average values (”expected values”), and then using these average values to make decisions, will lead to better results across the decision-maker’s entire portfolio of problems over time.  And what’s the alternative?  Refuse to give opinions?  How is a client (or patient or board of directors) supposed to choose between alternatives (like settle or go to trial, have the surgery or hope for the best, invest millions or don’t invest) if they are given no sense at all of their expert’s opinion of success or failure for each of the risky alternatives?

I once had an actuary tell me that, because the future is uncertain, his numbers were almost certainly wrong, but he believed they were less wrong than guessing outcomes with no analysis.  Can the same be said for Decision Tree Analysis?

Definitely!  Identifying the underlying uncertainties that will impact your overall results, making reasoned guesses about each of those, and using proven probability theory to combine the pieces has to be better than no analysis at all.  I like to say that because every defendant’s decision whether to pay $X or go to trial (or, if plaintiff, take $X rather than go to trial) NECESSARILY involves thinking about the chances of doing better or worse at trial, it’s best to make those guesses as explicit and unambiguous as possible.  This allows others to better understand your thought process and how you reached your recommendation, and it allows you to explore how sensitive your decision is to each of your underlying judgment calls.  [Editor's Note:  more on sensitivity analysis can be found at pages 12-17 to 12-18 in "Evaluating Legal Risks and Costs with Decision Tree Analysis," which is reprinted available on the articles page at litigationrisk.com; it also appears in the ACC's Successful Partnering Between Inside and Outside Counsel.

By now we have all seen decision trees, which help us visualize the various turning points in a case.  Are there other ways to graphically represent the results of a decision tree?

It's relatively easy to summarize the results of a decision tree in a graph that orders the range of potential results from low to high and shows the relative likelihood of each.  This is illustrated in most of the papers available at litigationrisk.com.  In addition, sensitivity analysis graphs -- that show how the expected value of litigating varies as the probability of success on a particular issue is varied -- are another useful analytical result easily derived from the decision tree.  Some are illustrated on page 12-18 of "Evaluating Legal Risks and Costs with Decision Tree Analysis" [available on the articles page at litigationrisk.com].  In addition, as clients begin to assess the probability of an event occurring, I often present them with a “probability wheel,” which is shown on page 12-10 of the same article, to help them visualize their chances of winning or losing.  This has proven to produce more realistic assessments.

Who are some of the advanced decision tree users out there?

At this point I shouldn’t mention names, but major oil companies, utilities, insurers, financial institutions, and others are repeat users.

Decision Tree Analysis is often associated with defense counsel.  Are plaintiffs’ lawyers using it, too?

If you mean plaintiffs’ personal injury lawyers, probably very few — though the benefits of doing so apply equally to both sides.  But companies (or even government agencies) considering or involved in litigation will use the techniques to be sure they want to bring the case in light of the often steep costs of litigation, as well as to help plan pretrial and settlement strategies.

Besides lawyers and clients, who else out there is using decision trees in litigation?

We’ve already discussed their use by mediators (in Part I of this interview).  Judges in some cases might also need to use decision trees.  I’m not sure if you have seen it, but you might want to read Judge Posner’s opinion in the Reynolds case [Reynolds v. Beneficial National Bank, 288 F.3d 277 (7th Cir. 2002)], which I cite in my paper “The Role of Risk Analysis in Dispute and Litigation Management” [available on the articles page at litigationrisk.com].  In his opinion, Judge Posner reversed a proposed class action settlement, using in part the following analysis [at pages 284-285]:

[T]he judge should have made a greater effort (he made none) to quantify the net expected value of continued litigation to the class, since a settlement for less than that value would not be adequate.  Determining that value would require estimating the range of possible outcomes and ascribing a probability to each point on the range . . ..

After outlining a hypothetical valuation of a litigation and calculating its net expected value, the court continued:

. . . our point is only that the judge made no effort to translate his intuitions about the strength of the plaintiff’s case, the range of possible damages, and the likely duration of the litigation if it was not settled now into numbers that would permit a responsible evaluation of the reasonableness of the settlement.

And as my coauthors and I wrote in the above-cited article, “If clients and circuit judges now expect risk analyses, judges, mediators, shareholders, and the SEC may not be far behind.  Outside counsel had better be ready.”

Is there a criticism of decision trees out there that you feel is unjustified?

Some lawyers will criticize some decision trees as being too complicated.  Assuming the tree was correctly done, but is still complicated, then I like to say that the tree is never more complicated than their real problem (i.e., than the underlying dispute that’s being modeled).  And I ask whether they think they can do a better job keeping track of all the pieces and combining them to form a sound opinion about case value — (1) by doing it in their head or (2) laying it out explicitly in a decision tree.

Many thanks to Marc B. Victor, Esq. for his time and effort in connection with this interview.  And Marc, don’t think it’s the last time we’ll call . . ..

A .pdf version of this advanced decision tree is available here.

Decision Tree Analysis isn’t new to litigation, and it isn’t new to this site either — we discussed the basics and more a few months ago.  But when you’re ready for an advanced take on the subject, where do you turn?  All roads lead to Marc B. Victor, Esq., who pioneered the application of decision tree analysis to litigation in the 1970s.

Through his company, Litigation Risk Analysis, Inc., Marc has taught decision tree analysis in the litigation context to over 10,000 senior legal professionals, some of whom no doubt had a hand in the American College of Civil Trial Mediators awarding Marc their Education Award of Excellence in 2003.  Marc was kind enough to guide me a bit when we began our series on decision trees a few months ago, and I have wanted to flesh out some of the details with him since those initial discussions.  The Q&A below is the result of our recent follow-up interview.

How did you first put together litigation management and the decision tree concept?

It was truly fortuitous.  I was a joint JD/MBA student at Stanford in the mid-1970s and had a summer job for a company bringing an antitrust suit against IBM.  I happened to have lunch with one of our lawyers the same day the president had asked him if $10 million would be a reasonable settlement.  As our lawyer walked me through what might happen if we went to trial — “if the judge rules for us on issue 1, and the jury then finds for us on issues 2 and 3, and then believes our expert on issues 4 and 5, we’ll win a lot of money; on the other hand, if . . .” — my Decision Analysis course at Stanford came to mind.  I started sketching the tree that fit his description of the twists and turns the case could take.  Over the next few weeks, we worked with outside counsel to finish the evaluation, presented the tree and the results to the president, and the matter settled soon thereafter.

What are the primary ways lawyers and clients are using decision tree analysis in litigation?

I believe there are a few ways:  (i) to be sure the lawyers have a clearer understanding of the key issues, uncertainties and exposure presented by a case; (ii) to gain settlement authority from the client; (iii) to convince the other side to accept a given settlement; (iv) to persuade a mediator or settlement conference judge of the rationale of their position; and (v) to plan a cost-effective litigation strategy.

Have you seen decision trees used effectively in mediation?

I have been asked to present decision trees as an advocate in mediation, and it certainly helps show the mediator that my client and I have a reasoned basis for our settlement position. I have also been retained by mediators on several occasions in large cases to help the mediation process by getting the parties to agree on the appropriate decision trees, discuss arguments, and assess probabilities and verdict ranges.  These cases have typically involved hundreds of millions of dollars, and by way of example include the $1.1 billion class action settlement of the Microsoft antitrust claims in California a few years ago.

What is the mistake lawyers and clients most often make as they learn to use decision trees in litigation?

The first is making just a one-node “we win overall/we lose overall” tree, and another is failing to do thorough “Lists of Reasons” before coming up with probabilities in the case.

Let’s take each of those in turn.  What’s the issue with a “one node” tree?

Some people limit their tree to a simple “we win/we lose,” despite the fact that there may be multiple underlying questions the jury or judge will deal with that will influence the ultimate outcome of the case — evidentiary rulings, alternative causes of action, potential defenses, and other uncertainties.  The parties and their lawyers would end up with a better evaluation of their overall chances of winning and losing if they would model these underlying issues and influences in a larger tree and then use probability arithmetic to arrive at the overall result.  [Editor's Note:  More on the process can be found in Marc's article, "Interpreting a Decision Tree Analysis of a Lawsuit," available on the articles page at litigationrisk.com.]

And what do you mean when you say that some users fail to generate “Lists of Reasons”?

Too many novice users of decision trees jump immediately from building the tree to filling in their probabilities.  But a probability that’s thrown onto the tree without first thinking rigorously about what the judge or jury will be weighing at trial won’t be as good as one made after doing so.  The “List of Reasons” is a summary of factors — pro and con — that the judge or jury will consider in deciding who should win each of the uncertainties represented on the decision tree.  This might be information on hand, such as key documents already in the file, but it might also include facts that could be uncovered in discovery, as well as witness strength, sympathy of the parties, and more.  [Editor's Note:  For more on Lists of Reasons, see pages 12-8 to 12-9 in "Evaluating Legal Risks and Costs with Decision Tree Analysis," which is reprinted available on the articles page at litigationrisk.com; it also appears in the ACC's Successful Partnering Between Inside and Outside Counsel.]

As a case progresses, how often should the parties update their decision trees?

The decision tree should be updated whenever there are new developments that would cause a significant change either to the structure of the tree itself (such as when a new cause of action is plead) or to the probabilities (because of what’s learned as discovery progresses, for example).  In addition, it’s usually a good idea to review and update your analysis prior to making a settlement decision or prior to a mediation.

Where can I find a good example of an advanced decision tree?

Those are almost always privileged and highly confidential, but the one on page 2 of my paper “Interpreting a Decision Tree Analysis of a Lawsuit” is a good start.  [Editor's note:  This article is available here and a .pdf of that analysis is available on Settlement Perspectives by clicking here.]

And what is the mistake people most often make as their decision tree skills advance?

As users become more advanced, I often see them putting multiple causes of action in separate trees when they should be in one tree or, if they know they should be in one tree, linking the causes of action together incorrectly.  Either of these mistakes will cause the calculation of case value to be wrong.  I also sometimes see them making trees more complicated — more academic — than they should be, forgetting that an effective decision tree should mirror the more streamlined, simpler approach juries often take when presented with complicated cases.

If I have a working knowledge of litigation decision trees, do you have any tips on how to advance my skill set?

I link to 7 articles on my website, and continue to offer training by appointment.  In addition, I work as a consultant to counsel and their clients on significant litigation matters.

Is there a software product out there you recommend?

I use TreeAge Pro exclusively.  It was co-founded by Morris Raker, a Boston lawyer, after attending one of my seminars in the 1980s, and it can ship with a manual I wrote for litigators.   [Editor's Note:  Additional providers of decision analysis software are listed within the comments to our first post on decision tree analysis in litigation.]

Come back next week for more of our interview of Marc Victor.  You’ll be glad you did.

As I have said before, if you really want to cut your litigation costs, step one is to have less litigation.  Step two, however, is just as important:  actively manage what’s left.  This post will explore a great way to do both — UDR.

We’re at a point where lawyers who are effective at getting cases settled are often thought to be afraid of trial, yet real trial lawyers often forget that their clients have more important business than litigation.  Which approach will you choose as your next case begins?  With Unconventional Dispute Resolution you can integrate both, so you don’t have to choose either — until the choice is actually yours.

What is UDR?

So what is UDR?  There’s no single element of Unconventional Dispute Resolution that’s truly new, but UDR combines 7 component parts in a way I haven’t seen before.  These elements — each of which is critical to the success of the whole — include:

1. Early Case Assessment
2. Aligned Fee Agreements
3. “BATNA” Changes
4. Custom Procedures and Structures
5. The Relationship
6. To Get the Deal Done
7. While Always, Always Preparing for Trial

It’ll take more than one post to fully explore UDR, but my old friend Robert Manley and I began the conversation in a recent presentation to the Austin Chapter of the Association of Corporate Counsel.  A quick recap of each element, and how it relates to the success of UDR as a whole, is below.

The 7 Elements of UDR

1. Early Case Assessment: This site has fully explored Early Case Assessment in a series on ECA already, so we won’t repeat it all here.  Succinctly put, without a sufficient understanding of the case, there’s no way to assess how to resolve it — thus ECA is an indispensable first step in UDR.
2. Aligned Fee Agreements: What’s the optimal alternative fee arrangement for your case — a reverse contingency fee?  An early resolution bonus?  Or something else?  How do you know?  I often see articles on how great it would be to get rid of the billable hour like those seen here, here and here, and I agree with them.  The trouble is that, in the corporate context at least, virtually no one has.  To me one of the biggest roadblocks to alternative fee agreements is a lack of understanding of the case when alternatives to the billable hour could be considered.  Without a real understanding of the case, a fee arrangement that aligns the interests of client and counsel cannot be achieved.
3. “BATNA” Changes: We’ll explore the BATNA concept, meaning the Best Alternative to a Negotiated Agreement, in a later post, but for now we all know that lawsuit settlement and dispute resolution often hinge on the parties’ alternatives to a negotiated agreement.  What will happen if the case doesn’t settle?  Will the case go to trial? Even if you’re prepared for trial, what else is at stake?  Will your opponent’s customers have to testify?  Would a counterclaim that puts your opponent’s other patents at risk drive a settlement?  These questions often get lost in the battle until it’s too late.  Don’t let that happen.  Change your opponent’s alternatives and your own as early as you can — and make sure he understands you have done so when the time is right.
4. Custom Procedures and Structures: This dispute is your problem, and you have to take the initiative to get it solved.  Don’t let litigation be something you spend $100,000 a month on until you’re ready to deal with it.  Work with your counsel, appropriately incented, and the other side early on to find a streamlined way to get it resolved.  For a few tips on how to get this done, take a look at Settlement Perspectives and its series on Settlement Structures — you’ll find ways to settle your case halfway (and why you might want to), paired with practical tips on nonbinding arbitration, blind bidding enhancement, high-low agreements, and more.
5. The Relationship: As a longtime in-house litigator and past Chair of the Association of Corporate Counsel’s National Litigation Committee, I have listened to a hundred ways to cut litigation costs, but to me it all comes back to the relationship between counsel and client.  I have to trust my outside counsel — and they have to trust me — before we’ll achieve long-term success.  I know that I’ll need to waive conflicts of interests when they don’t really impact my client, and I expect my counsel to give presentations on litigation prevention to my team every now and then — even if there isn’t a convenient billing number nearby.  I hope to see young lawyers tagging along at depositions, I don’t call on Saturdays if I don’t have to, and I expect similar treatment in return.  After a time, outside counsel is no longer my vendor; she has truly become my partner — and we both know she’ll go that extra mile to get her partner’s case resolved.
6. To Get the Deal Done: It’s time to take advantage of your knowledge of the case and the alignment of interests you share with your counsel or client.  You have done what’s necessary to change your opponent’s alternatives, and you have streamlined the procedures to get a deal done.  Now is the time to execute.
7. While Always, Always Preparing for Trial: We have discussed before the Sid Hill Rule — that the power to negotiate is the power to walk away.  I have seen what happens when parties and lawyers fail to prepare for trial.  As we know, trial isn’t for everybody; make sure your lead counsel is comfortable with it and ready for it.

There’s More on UDR to Come

Come back for more on UDR, which we’ll post here.  You’ll be glad you did.

How do you negotiate with your neighbor as your tree sits on his roof? The subject line only read “Tree Down,” but I began to wonder. The irony wasn’t lost on me as I scanned the rest of the message.  A storm, our tree, our neighbor’s house, and a scramble to respond — all as I sat in a seminar on advanced dispute resolution techniques two time zones away. I was soon reminded of a valuable lesson in negotiation that most people never get: Do you even negotiate at all?

What’s Your First Move?

I have cited all manner of negotiation textbooks on this site, from Getting to Yes to Start with No and beyond — but if your answer to the question “What’s your first move?” was anything other than “Get the tree off his house,” take a deep breath. The roof is supporting the tree at the moment; let’s remove it before the problem is more serious than a few shingles.

As the tree guys began their work, I did the math to determine if the damage would exceed the deductible on my homeowner’s insurance — it was my tree so it was my responsibility, right? I thought I’d check, just in case . . ..

Responsibility for Tree Damage: The Law

My wife did a quick Internet search as we worked to sort this out, and learned that our tree wasn’t the first to fall on someone else’s property. According to one site and more than a few others:

The mere fact that it was [someone's] tree is not enough to create liability for damages on the tree owner. Trees can fall through no fault of the owner’s, such as in a hurricane. In order to be able to hold the neighbor liable for damages, the homeowner must show that the treeowner’s actions somehow contributed to it falling.

(This isn’t a site about trees, but for those of you who need more on this, additional links can be found here, here and here.)

Responsibility to Your Neighbor: The Rule Isn’t New

As I read the links above I realized I didn’t need to look any further for an answer.  I asked myself what I’d do if my neighbor’s tree fell on my house — applying a rule I learned at Camp Laney when I was about 7. If the roles were reversed I would expect my neighbor to get his tree off my house, and nothing less.

The call was quick and friendly. I’d pay for the tree removal from his house, he’d pay for the minor damage to his roof and — although we didn’t say it — we knew our neighbors would remain our friends.

Sometimes You Don’t Negotiate at All

I’m confident that someone will tell me I wasted my money paying when I didn’t have to, and others will tell me I should have done something creative like split the difference. Perhaps those are the same folks who told Garrison Keillor that a lawsuit against his next door neighbor would be a good idea (before he moved) or maybe they’re the folks who bill their neighbors for apples that fall across the property line like this guy did.

No doubt the decision not to negotiate is often a difficult one.  Sometimes it takes a bit of courage, and sometimes it costs a little money. But it’s usually worth it.