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    November
    10
    2020

    Beyond the Divorce: Crafting Successful Settlement Agreements

    Some dueling parties must maintain communication with each other after a lawsuit is resolved, for example, because they are divorced parents of children. Learn about factors that make successful settlements more likely for clients in divorces, business disputes, and other matters.

    Gregg M. Herman & Dr. Kenneth Waldron

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    negotiators at table

    Divorce lawyers have a saying that a bad settlement beats a good trial. If true, a good settlement beats all. Settlements are golden, as they allow creativity in developing a case-specific settlement plan, often including provisions that would not be ordered by a court if the case went to litigation.

    This is particularly important in family law cases in which the parties will have a continuing relationship with one another, most commonly regarding children (minors and adults), but potentially including extended family, friends, neighbors, and more. However, this might also apply in partnership cases in which the partners are or were friends, in family-owned-business cases, and in business cases in which the businesses have strategic relationships with one another that need to continue.

    Settlements have the potential to promote future peace and stability between the parties. When children are involved, settlements in divorce are particularly important because of the unique nature of co-parenting partnerships and the effects on the children.

    Studies Regarding Settlements

    Surprisingly, there is a dearth of studies regarding what promotes versus what discourages settlement. U.W. Law School Professor Marc Galanter identified potential benefits of settling divorce cases through negotiations (in addition to saving the time and expense of litigation and focusing on the quality of the result):

    • The agreement represents a compromise between initial positions.

    • The parties have more information about their situation than the court does.1

    • Settlement represents the values and norms of the parties, rather than the court’s legal norms.

    • Parties can design solutions that courts could not order.

    • Parties are more likely to comply with their own agreements than with court decisions or orders.

    • Settlement generally has a good effect on post-divorce relationships.2

    Gregg M. HermanGregg M. Herman, U.W. 1977, is a family law attorney with Loeb & Herman S.C., Milwaukee. He is an NBTA Certified Specialist in family law trial advocacy and is a past chair of the ABA Family Law Section. He has written and spoken extensively about divorce settlement negotiations, including authoring Settlement Negotiation Techniques in Family Law: A Guide to Improved Tactics and Resolution, published by the ABA Family Law Section.

    Kenneth H. WaldronPsychologist Kenneth H. Waldron has had a nearly 40-year practice devoted to assessing and treating separated and separating parents and their families. He has authored many papers and presented at conferences on topics related to family law and is coauthor of Game Theory and the Transformation of Family Law and Winning Strategies in Divorce. He is also one of the “Divorce Doctors” at www.thedivorcedoctor.net.

    Although sensible, these assertions have not been supported by empirical evidence. Professor John Lande made a simple but meaningful contribution when he stated that by definition, parties value settlement because they settled rather than not.3 However, this too does not answer the question empirically: Why do professionals and parties value settlement? For example, parties in strategic relationships with one another and who will have continuing relationships might find the limbo of unresolved disputes painful and be inclined to settle because they hope to end the pain.

    Negotiating settlements might seem purely intuitive (one side starts high, the other low, then they meet between), and in some cases, it is, indeed, that simple. In fact, lawyers can submit their highs and lows to artificial intelligence (AI) online programs such as Cybersettle and derive a settlement. However, in many types of cases, particularly with continuing relationships, it’s not that simple. The methodology brought to negotiations can affect not only the agreement but also the lasting emotional effects on the parties and on their relationships.

    In the hope of adding knowledge to this area of negotiation, we sent a survey to family law attorneys, mediators, mental health professionals, and court officials. Our focus was to answer two key questions. First, was our assumption accurate that lawyers and other professionals view settling a case as superior to litigation because the interests of clients generally are better served by settlement compared to litigation? Second, which factors tend to promote successful settlement negotiations, and which, perhaps, hinder negotiations?

    Of approximately 550 survey recipients, 103 responded, comprised of 58.6 percent attorneys, 23.5 percent attorney mediators, 17 percent nonattorney mediators, and 6.5 percent judges and family court commissioners. Respondents were about evenly divided as to gender. About one-half were from large urban areas, and the other one-half were from moderate-size cities or rural areas. Most recipients had 10 or more years of experience while only about 7 percent had less than five years of experience.

    Authors’ Survey

    Survey Design. The survey consisted of 31 items focused on settlement negotiations, clustered into five topic groups:

    1. Value of settlement negotiations (5 items)

    2. Legal culture and jurisdictional factors that affect settlement rates (8 items)

    3. Client factors (3 items)

    4. Community resources (3 items)

    5. Specific case issues (12 items)

    A weighted mean was calculated for each survey item. This calculated to a score between -2 and +2 for each item for comparison.4

    Survey Results. The findings suggest, as expected, that divorce professionals highly value settlement. This confirms our beginning assumption, based on anecdotal information and some publications, that 1) the legal interests of clients can be better protected in settlement negotiations than in litigation, and 2) the flexibility to make plans that fit case specifics is more available in settlement negotiations than is likely to be ordered following litigation.

    Not surprisingly, professionals see the relationships with, mindset, and skill level of participants in negotiations as a major factor contributing to effective negotiations. Also not surprisingly, the survey found that some case-specific issues have an enormous effect on the difficulty of the case and the probability of settlement. Unproven allegations present more challenges than proven allegations, and some disputes have little or no areas for compromise, making the resolution an all-or-nothing, win-lose situation. Finally, some issues are highly emotionally charged and parties seem ready to battle to the death.

    While the relationship between the lawyers involved was rated as very important, surprisingly, the influence of the court and legal climate in a jurisdiction appear to be substantially less important than other factors. Information regarding well-known areas of judicial leadership, such as that of Justice Donald King in San Francisco and the Hon. Mary Davidson in Minneapolis, suggested that judicial involvement in promoting settlement would be a more important factor than our survey results indicate it is.

    A paradoxical survey finding was that although the negotiation mindset and skill level of lawyers was rated as very important, training in negotiation skills was rated as somewhat low in importance. Negotiation theory and practice have come a long way, perhaps best demonstrated by the size and scope presented in The Negotiator’s Desk Reference in two volumes.5 If mindset and skill are valued, it is surprising that training is not considered a more important means of achieving both factors. Similarly, the involvement of skilled neutrals, such as guardians ad litem in family law cases or mediators, rated highly in the survey. Most mediators receive extensive training in negotiation mindset and skills, but some might not.

    Given the extent and depth of the research and literature on settlement skills, we are surprised that experienced professionals do not rate training higher. For example, an extensive research article on effectiveness of negotiation style and tactics turned upside-down common practice at the time and the current practice of many lawyers.6 In that study, hardball approaches were much less effective than a more respectful, empathic approach focusing on the outcomes for both sides.

    As another example, many negotiations are conducted in a low-to-no-trust client situation in which the parties might even hate one another. However, by knowing the work of Moty Cristal, Peter Coleman,7 and others who identify specific skills and strategies to be effective in these types of cases, negotiators in those challenging cases can bridge the difference between settlement and failure.8

    Survey Methodology and Results

    Surveys were sent to approximately 550 recipients, primarily in Wisconsin. Several recipients practice in other states but are members of the Wisconsin Chapter of the Association of Family and Conciliation Courts or are attorneys associated with cases that originated in Wisconsin. Recipients are judges, commissioners, court-connected mediators, attorneys, attorney-mediators, and mental health professionals involved in family law practice, such as custody and physical placement evaluators.

    103 recipients took the online survey in the Monkey Survey environment. Recipients, 58.6 percent of whom are women and 41.4 percent of whom are men, are in the following demographics:

    Professions represented:

    • Judges or family court commissioners: 6.5 percent
    • Attorneys: 56.8 percent
    • Attorney mediators: 23.5 percent
    • Nonattorney mediators: 17 percent

    Areas represented:

    • Urban: 49.5 percent
    • Moderate-size city: 30.3 percent
    • Rural: 20.2 percent

    Level of experience:

    • Less than 5 years: 7.1 percent
    • 5-10 years: 9.1 percent
    • More than 10 years: 83.8 percent

    The survey consisted of:

    • 5 items – The value of negotiated settlements rather than full litigation
    • 8 items – Legal culture and jurisdictional factors that affect settlement rates
    • 3 items – Client factors (for example, willingness to accept compromises)
    • 3 items – Community resources (for example, availability of experts)
    • 12 items – Specific case issues

    Results were calculated in weighted means, with -2 being least important and +2 being most important.

    Key Finding: Negotiators’ Skills Matter

    In brief, even experienced negotiators can become more effective by learning negotiation skills and strategies. Skilled negotiators are recognized by most lawyers, but understanding specifically what those skills are and how to learn them can enhance effectiveness.

    Among the anomalies involved in the practice of law is the disparity between the substance of legal education (both in and after law school) and the reality of practice. Much, perhaps 90 percent, of law school training and CLE programs afterward appears to concentrate on litigation skills. Yet, there are estimates that 90 percent – or more – of cases are resolved through negotiations.9 If you accept these estimates (or anywhere near them), that means that 90 percent of training is for what lawyers actually do only 10 percent of the time.

    We suspect most lawyers believe that litigation requires special skills entailing rigorous training, and it does, but law schools also are establishing negotiation departments, recognizing that settlement negotiations also require a specific set of skills and a very different mindset than litigation. Successful negotiations are not intuitive only. Here are a few suggestions for practicing attorneys.10

    Read Negotiation-specific Literature. A significant amount of material is available on the art of negotiations, ranging from philosophical to practical to intellectual. A starting point is certainly Fisher and Ury’s classic book Getting to Yes. In addition, there are substantial resources on how to negotiate in numerous different forums. We highly recommend Honeyman and Schneider’s The Negotiator’s Desk Reference. In it you can learn from a range of experts, from international negotiators to hostage negotiators, through whose advice threads run that can help in any legal arena. Another starting place is Andrea Kupfer Schneider’s masterpiece study cited earlier.11 Because so many cases involve intense disputes in low-trust situations, the work of Moty Crystal and Peter Coleman (cited above) can be particularly helpful.

    Read Other Settlement-related Literature. One place to start is with the book A Beautiful Mind or the Freakonomics series. Both describe the field of behavioral economics, which deals with incentivizing behavior. Providing clients with incentives to engage in certain behaviors is exactly what most divorce lawyers try to accomplish. We humbly recommend reading Game Theory and the Transformation of Family Law and Winning Strategies in Divorce, cited at the beginning of this article, both of which apply mathematics and science to the negotiation process.

    Watch Other Lawyers. Experienced partners might welcome a “second chair” in negotiations, where the associate can watch the techniques and styles of two lawyers in one setting. Although styles differ, as Yogi Berra (supposedly) said, “You can observe a lot by just watching.”

    Take Courses on Negotiation. Just as other fields are constantly evolving, negotiation skills are constantly changing and improving. Many law schools have developed curricula for settlement negotiations. The State Bar of Wisconsin and other CLE providers frequently offer invaluable courses on negotiation skills.

    Take Courses in Related Skills. Courses on psychology, physiology, human development, marketing, mediation, and conflict negotiation all provide information that can be highly useful in negotiation sessions. For example, empathic concern for “the other side” has been found to increase the effectiveness of negotiations and can be learned from the “perspective taking” social science studies. In business, literature specifically addressing problem-solving can be helpful. Strategic decision-making courses are available at The Teaching Company, known for its Great Courses® brand, https://www.thegreatcourses.com/.

    Learn from Former Clients. At the end of a case, have a postjudgment meeting with a client, not only to go over what must be accomplished to finalize the case but also to ask for a critique. Listen with an open mind.

    Be Creative. Life is a learning process. Although settling cases might seem to be an intuitive process, there is substantial information available to help do it better. For example, helping parties focus on the primary emotions undergirding their disputes can take much of the angst out of the situation. Divorce is dominated by the primary emotions of sadness, fear, and insecurity. Opening a meeting focusing on the sadness and fear, rather than the anger and blame, can lead to the clank of swords and shields falling on the floor.

    Conclusion

    We conclude with a suggestion: All attorneys practicing family law would do well to obtain further training in negotiation and mediation skills as a primary focus, especially attorneys working as or who plan to work as guardians ad litem.

    Also of Interest

    Family Law in Wisconsin: A Forms and Procedures HandbookFamily Law in Wisconsin: A Forms and Procedures Handbook

    Cut through the clutter of divorce proceedings with the tools and strategies you’ll find in Family Law in Wisconsin: A Forms and Procedures Handbook. The revised 10th edition of Family Law in Wisconsin, once again primarily authored by Gregg M. Herman, was released in June 2020.The book’s systematic approach makes each divorce or family law case more manageable. It provides tools to eliminate unnecessary meetings, letters, and other communications and enables you to spend more time listening to your client’s needs.

    Whether you’re in a solo practice or a large firm, Family Law in Wisconsin: A Forms and Procedures Handbook is invaluable. Inside you’ll find the guidance and resources you need, allowing you to provide the results your clients demand.

    Family Law in Wisconsin: A Forms and Procedures Handbook is available in print and online via the State Bar of Wisconsin PINNACLE® subscription-based online library, Books UnBound®. The print book is $245 for members ($310 nonmembers), plus tax and shipping.

    Endnotes

    1 What researchers call “bounded rationality.”

    2 Marc Galanter, The Quality of Settlements, J. Dispute Resolution 55-84 (1988).

    3 John Lande, “Taming the Jungle of Negotiation Theories,” in Chris Honeyman & Andrea Kupfer Schneider (eds.) The Negotiator’s Desk Reference 87-105 (DRI Press 2017).

    4 SD and VE received a score -2; D and E received a score of -1; N received a score of 0; A and D received a score of +1; and SA and VD received a score of +2.

    5 Chris Honeyman & Andrea Kupfer Schneider (eds.), The Negotiator’s Desk Reference (DRI Press 2017).

    6 Andrea Kupfer Schneider, Shattering Negotiation Myths: Empirical Evidence on the Effectiveness of Negotiation Style, Harv. Negotiation L. Rev.7, 143-233 (2002).

    7 E.g. Peter T. Coleman et al., Rethinking Intractable Conflict, Am. Psych.262-78 (May-June 2010).

    8 Moty Cristal, “Negotiating in a Low-to-No Trust Environment,” in The Negotiator’s Desk Reference, supra note 5, at 231-48.

    9 E.g. L.K. Wray, What Clients Say About Their Experience in the Collaborative Process (2010), International Association of Collaborative Professionals website.

    10 Gregg Herman, Settlement Negotiation Techniques in Family Law: A Guide to Improved Tactics and Resolution (ABA Section of Family Law 2013).

    11 Id. at vi.




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