Vol. 76, No. 12, December
2003
Think Like a Negotiator:
Effectively mediating client disputes
Lawyers' thoughtful participation in the mediation process can
significantly advance a client's interests in achieving a beneficial
settlement. Thinking like a negotiator when preparing for mediation,
including thoroughly understanding the client's interests and
motivations, is key. Read what lawyers can do to enhance their
effectiveness in the mediation process.
by Mark A. Frankel & John
Mitby
Although alternative dispute resolution (ADR) has relatively recent
roots in our litigation system, mediation and arbitration have become so
prevalent that today it is more accurate to view the jury trial as an
"alternative form" of dispute resolution. Lawyers need to give the same
degree of thought and attention to their preparation for mediation as
they do their preparation for trial. This article focuses on what
lawyers can do to enhance their effectiveness in the mediation process.
The authors firmly believe that effective mediation skills can
positively affect the outcome of the mediation process on behalf of
clients.
Attitude
Even though a lawyer may have reached the point of mediation through
the adversarial process of litigation or the threat of litigation, a
lawyer must, foremost, view the mediation process from a negotiator's
perspective. For any dispute to be successfully resolved in mediation,
there must be flexibility on all sides. Anyone entering mediation with a
view that anticipates a "winner take all" outcome is almost certain to
come away from the process disappointed. Mediation, at its best,
consists of realistic case evaluation and creative deal making. Lawyers
for each side can play a large role in shaping the contours of any
successful outcome. Of course, each party wants to maximize the
beneficial aspects of a settlement. That goal, however, is not
inconsistent with a view of mediation as a collaborative rather than a
competitive process. The object is to make it easy for the other side to
see things "your way." Not only must lawyers for all sides appreciate
the unique context in which mediation takes place, but clients also must
be educated to ensure they do not bring unrealistic and
counterproductive views to the table.
Timing - When to Mediate
There is no fixed rule as to the best time to initiate the mediation
process. This subjective determination involves a balance between the
need for adequate discovery and the cost of additional litigation,
together with a feel for the receptivity of the various parties to
mediation. Clearly, counsel needs enough information from which to make
an educated approximation of the potential value of the client's case.
Additionally, information must be provided to the other side so that
both sides have in mind the value of the case. An approaching summary
judgment motion is a juncture at which mediation ought to be considered.
By then, both sides are well aware of their respective positions on the
facts and law.
Waiting too long may have the unfortunate consequence of reducing the
flexibility of some parties, as a result of the perceived "sunk cost" of
litigation. Even if an initial mediation effort proves unsuccessful,
cases may yet resolve prior to trial, based on settlement progress made
in mediation. As important, future discovery frequently becomes more
focused and efficient.
Initiating the Process
There are no formal procedures or agreements necessary to initiate
private mediation. Court-ordered mediation programs may have local rules
that must be followed to assure compliance.1
Perhaps the biggest hurdle to overcome in initiating mediation is the
concern that the party seeking mediation may be perceived as operating
from a position of weakness. There are numerous innocuous explanations
that can be offered to the other side as a rationale for suggesting
mediation. These explanations for initiating mediation may range from an
attempt to anticipate court-ordered mediation, to an initiative based on
a company policy of exploring ADR, to an opportunity for all sides to
potentially save significant litigation expense by exploring mediation.
Once mediation is undertaken, the reality is that it makes no difference
which side first suggested mediation.
Selecting a Mediator
The selection of the mediator will influence the likelihood that a
given dispute will conclude in a successful resolution. It is important
to understand the prospective mediator's approach to mediation. The two
principal schools of mediation are known as the facilitative approach
and the evaluative approach. The distinction lies primarily in the
willingness of an evaluative mediator to share his or her opinions on
the merits of the issues in dispute. When in doubt, do not hesitate to
ask a prospective mediator to describe his or her approach to mediation.
There are several other theories of mediation, and mediators may borrow
from several different disciplines. Ex parte communications with
prospective mediators at the selection stage are rarely a problem.
The best referral sources for locating potential mediators are other
lawyers familiar with the mediation process. After gathering the names
of prospective mediators, counsel can either mutually decide on the
best-qualified candidate or employ a process of alternately striking
names. It is helpful to have a mediator who has some knowledge of the
type of case to be mediated. If in doubt, find out about the mediator's
experience. Lastly, determine the mediator's hourly rate and how the fee
will be shared.
Understanding What a Mediator Does
The essential role of a mediator is that of a neutral facilitator.
Once the mediation process starts, it frequently takes on a life of its
own. A thoughtful mediator will assist all parties in exploring the
strengths and weaknesses of their respective positions and analyzing
their settlement options.
Most mediations start in joint session with the mediator reviewing
the ground rules for the mediation. Attorneys frequently resist allowing
the initial joint session to become anything more than a perfunctory
introduction. Many cases can benefit from an initial discussion of
issues with all parties present. Counsel should not worry about the
minutiae of process, that is, what the mediator is doing or how much
time he or she is spending with one or the other side. Frequently, the
mediator is just trying to level with the attorneys about the problems
in their cases. In the end, what counts is the result, not the
process.
It is the mediator's job to get a grasp of the dispute's dynamics as
quickly as possible. The next step is generally to frame the issues in
neutral terms. All sides will be expected to share their views of the
underlying dispute as well as their goals and expectations for a
settlement. Each side should be prepared to critically evaluate its own
as well as the other side's position. It is up to the mediator to make
the strategic decision of which issue or issues to tackle first.
The ultimate yardstick by which any proposed settlement is measured
is a comparison of a given settlement option with the costs, risks, and
benefits of seeking resolution outside the mediation context. While the
mediator may or may not offer suggestions for potential settlement at
various points in the process, counsel should be prepared to offer
creative suggestions for resolution based on a thorough understanding of
their clients' real interests in the dispute.
Preparing the Client for Mediation
Most mediators expect the clients to actively participate in the
mediation process. The client should be prepared for mediation in much
the same way that a client is prepared to testify. The client should be
given an overview of the mediation process and may assist counsel in
formulating a settlement strategy. That, of course, depends on the type
of client. The client should be asked to review potential dispute
settlement from both a short-term and a "big picture" point of view.
Ideally, the client will help formulate the range of acceptable
settlement outcomes. Be careful that counsel's values for settlement are
in sync with the client's values and expectations.
Clients should be counseled to project both confidence and an
attitude of cooperation. If the client has an abrasive or intemperate
personality, it may be advisable to explore switching client
representatives, if possible. The client needs to understand the
limitations on the mediator's ability to bring about a settlement and
the value of being able to project empathy for the other side. The
ultimate target audience counsel is looking to communicate with is the
other side, not the mediator.
If You Care About ADR ...
Consider Joining the State Bar Alternative Dispute Resolution
Section
Alternative Dispute Resolution is becoming increasingly important to
all aspects of law practice. If ADR is becoming increasingly important
to you, consider joining the more than 300 members of the State Bar ADR
Section who work in the field and care about its future as a vital
practice area for Wisconsin lawyers. Some of the benefits of section
membership include:
- a quarterly newsletter to keep you up to date on ADR news and
views
- an email listserv that allows you to communicate quickly and easily
with ADR practitioners statewide
- an annual educational seminar offering you hints and tips from top
ADR experts
- a Web site dedicated to important ADR
Section news and information
- an opportunity to influence development of ADR policy in Wisconsin
through service on the section board of directors
- an opportunity to expand your ADR practice horizons as a member of
the panel of neutrals of the section's Business Dispute Resolution
Program
To learn more about the benefits of ADR Section membership or to
join, please contact the State Bar at (800) 728-7788.
The strengths and weaknesses of each side's case must be thoroughly
evaluated. Counsel should help the client to understand the dispute from
the vantage point of the other side. In assessing both the direct and
indirect costs of litigation, be sure the client is aware of not only
the attorney fees and costs, but also the time, distraction, emotional
costs, publicity, and lost opportunities. The client needs to understand
that he or she is the ultimate decision-maker in mediation.
Lawyer Preparation
In preparation for mediation, a lawyer should start with the client's
realistic goals for settlement in mind. For example, one of those goals
may be to preserve or enhance the client's relationship with the other
side after the dispute is over. Counsel can then formulate an approach
to educate and hopefully persuade the other side(s) with the mediator's
assistance.
Mediators frequently request premediation submissions from counsel.
This submission is an important opportunity to educate and inform the
mediator about the essential facts and law, the relative strengths of
the case, counsel's goals for settlement, and any creative suggestions
counsel may have to assist the mediator in getting the parties closer to
the client's desired goals. The submission should normally be no more
than five pages long with key exhibits or medical reports attached. The
mediator is neither the fact finder nor judge of the law, but rather
needs to know and understand the key issues. If there is some issue that
is not negotiable, counsel should be very clear on this point.
Counsel needs to either obtain settlement authority in advance or
secure the attendance of those with the authority to settle. It may be
important to have crucial documents and exhibits, including accurate
summaries of evidence, available to share with the mediator and the
other side.
Each lawyer should formulate an initial settlement offer that allows
room for movement to an acceptable final resolution. Parties come to
mediation with an expectation that each side will engage in a process of
compromise to reach an ultimate settlement. Counsel should resist the
temptation to make the initial offer the final offer. There is also a
danger that an initial offer that is patently unreasonable will either
damage credibility or make meaningful negotiations difficult to
establish. Concessions on certain points can also be planned or
anticipated in advance.
The stance adopted in mediation should be a flexible one. The
mediator should be seen as an ally - someone who can be helpful with
creative settlement ideas or feedback about the dynamics of settlement.
Counsel will likely be asked to review positions and perspectives that
have not previously been considered. That is part of the added value of
mediation. Leave adequate time for the process to reach a natural
conclusion. Remember, attorneys are preparing for negotiation and not
litigation.
Mediation Dynamics
Counsel's task is initially to condense and distill the client's
position as persuasively as possible. Part of the position adopted
should include creative options for resolution of the dispute. The
mediation process tends to work from the general toward the specific.
Think in terms of working collaboratively with the mediator to find
creative solutions. Listen carefully to what the mediator says. Try to
discern what the other side is saying about its needs and desires in the
mediation process. Communication takes place on both an explicit and a
subtle level.
The process of mediation is fluid and sometimes takes unanticipated
turns. It is critical that counsel knows the client and his or her
interests. To the extent the client can tell his or her own story
effectively, nothing conveys the client's message as well. While the
client may wish to dwell on past grievances, the focus ultimately should
be on the future and life after the case is resolved.
Each lawyer must attempt to gauge the process of making offers as
part of the "dance" that leads to resolution. As an offer is extended to
the other side, it is often helpful if a rationale or justification
accompanies the offer. "Objective standards of reasonableness" can add
persuasive force to any offer that is made.2
Research has shown that potential losses may be more persuasive with the
opposition than potential gains.
If the other side engages in clearly competitive behavior, it makes
sense to respond accordingly until that behavior ceases. Likeability is
a trait that is effective with both mediators and the opposition. An
ability to demonstrate empathy with the other side is also helpful. The
rule of reciprocal concessions, an established psychological principle,
suggests that when one side makes a concession, the other side will feel
compelled to respond in kind.
It is perfectly appropriate to suggest solutions that are contingent
on the other side's acceptance of a certain proposition; for example,
"if you get the other side to agree to X, we can agree to Y." If counsel
become stuck, a "mediator's proposal"3 can
be used to bridge a final gap between the two sides. The mediation
process tends to reward creativity in the aid of dispute resolution.
There are many unique resolutions possible in mediation that are simply
unavailable in litigation.
Settlement Dynamics
One of the keys to finding a successful resolution lies in thinking
creatively and empathetically about what your client might offer the
other side that would be of particular value to the opposition in
bringing about a settlement. Frequently, trades can be negotiated that
will allow both sides to maximize the value of a negotiated settlement.
By way of illustration, some items that might have particular interest
to the party sitting across the table include:
-
|
|
Frankel
|
Mitby
|
Mark A. Frankel, U.W.
1973, is a shareholder at LaFollette Godfrey & Kahn, the Madison
office of Godfrey & Kahn S.C.
John Mitby, U.W. 1971, is a partner with Axley
Brynelson LLP, Madison. The authors thank Attorney Marie Stanton of
Madison for her contributions to this article.
to the vendor in a commercial dispute - additional business
- to the payee in a limited-term maintenance case - additional cash
paid sooner with gradual reductions in payments over time
- to an employee/labor union -
- an apology or acknowledgement of responsibility for a
contentious
- development
- to a minor tort plaintiff - the possibility of a structured
settlement to ensure payments over the plaintiff's lifetime
- to businesses involved in an ongoing relationship - an objective
mechanism by which future disputes may be anticipated or resolved
- to a purchaser of an allegedly defective product - an extended
future warranty
- to parties dividing an entity - devising a formula to offer to the
other side, such as "I cut, you choose"
- to a product liability defendant - a confidentiality agreement
What is called for has been described as good old-fashioned
"brainstorming." Counsel should understand the difference between
listening in order to understand and listening in order to respond. The
range of creative problem-solving solutions is vast. Once the other
party perceives an earnestly sought good-faith solution to the dispute,
the most frequent response is likely to be a reciprocal gesture of
accommodation.
If settlement is reached, it is a good idea to reduce the agreement
to writing.4 In a business dispute, it might
be helpful to have a draft of a stipulated resolution prepared in
advance. It may be practical to recite only the agreement's essential
terms. A more formal settlement document can always be drafted later.
The parties may wish to consider whether to authorize the mediator to
arbitrate any future disputes over the precise wording of the final
settlement agreement.
Reasons Cases Do Not Settle
There may be any number of reasons why a given case does not settle
in mediation. Some of the most common reasons are:
1) A failure by either party to objectively evaluate the case,
including the selection of an improper baseline for analysis, or a
failure of a party to realistically examine his or her underlying
interests.
2) A failure to communicate with the mediator or the other side. This
may include engaging in "reactive devaluation" - a process of making
regressive offers in response to disappointment or frustration.
3) A failure of communication between lawyer and client.
4) Emotional barriers to settlement.
5) An undue focus on winning.
6) Difficulty in getting past impasse.
7) Inadequate time set aside to complete mediation.
Conclusion
Thoughtful and creative participation by counsel in the mediation
process can significantly advance a client's interest in achieving a
beneficial settlement. A major component of mediation advocacy involves
an in-depth understanding of the client's interests and how those
interests can be effectively communicated in the mediation process.
Counsel's skill as a lawyer in mediation should be measured, not by the
size of the settlement, but by counsel's ability to provide the client
with the best possible opportunity to resolve the dispute on mutually
agreeable terms.
Endnotes
1Wis. Stat. section 802.12(2)
provides trial judges with an array of options for initiating
alternative dispute resolution, with or without a motion being filed by
a party.
2Appraisals, market values,
undisputed facts, and so on.
3A "mediator's proposal" can take a
number of forms. It can be a specific settlement recommendation, it can
be a range of possible settlement values, or it can take the form of a
double blind offer. A double blind offer means that a proposal is
suggested by the mediator and each side responds confidentially. Only if
both sides agree to accept the proposal does the mediator reveal
anyone's preference.
4Once an action or special
proceeding has been commenced, oral stipulations are not enforceable.
See Wis. Stat. § 807.05; Laska v. Laska, 2002 WI
App 132, ¶ 9, 255 Wis. 2d 823, 646 N.W.2d 393.
Wisconsin
Lawyer