Tuesday, May 12, 2015

The Art of Negotiation

A long time ago, when I was fairly new at law practice, I represented a plaintiff in a contentious sexual harassment case against a large company. After a series of pre-trial battles, the defendant's counsel opened the door to the possibility of settlement, throwing out an insultingly low-ball number. I wasn't sure how to respond.

At that point in my career, I thought I knew how to litigate, but nobody had ever taught me how to negotiate. I had never received any training in negotiation strategy in law school, and very little at my law firm. The subject simply wasn't taught at the time. So I honestly didn't know the best number to come back with in order to lead the process to a good result for my client. For some reason I confessed my weakness to the other side, saying something that indicated I wasn't sure what to do next. My adversary's response was to ask me whether there was anyone else at my firm who was more skilled at negotiation who could get back to him with a response to his offer.

Suddenly I understood two things. First, there was nobody else at my firm who could do this better than I could. This was my case, and I knew it better than anyone. Second, I realized from defense counsel's somewhat desperate request for somebody to negotiate with, that the other side was extremely anxious to make a deal. Their aggressive litigation strategy had failed to make us go away, and now they were looking at the high costs and high risks of proceeding to trial. I knew they would pay more than they were offering, even though I wasn't sure how much I could talk them up.

Once I figured out how to process what the other side was telling me, I had the confidence to handle the negotiations, And I was able to engage in the kind of give-and-take necessary to get the deal done. After that, I never again thought of myself as someone who didn't know how to negotiate.

This story came back to me as I was reading a book called The Art of Negotiation, by Michael Wheeler, a professor at Harvard Business School, who is also part of Harvard's well-known Program on Negotiation. I picked up the book after I had a chance to hear Wheeler talk at UCLA about his theories of negotiation. The book is filled with entertaining stories about buying houses and cars, and closing business deals. Wheeler teaches classes on negotiation, so he obviously believes students can learn about negotiation in a classroom. But he also understands that negotiation is more of an art than a science. His theme is about the importance of improvisation in negotiation: responding to the cues and information given by the other side It's about the attention, presence of mind, and creativity needed to succeed in negotiation.

In other words, the secrets of negotiation lie not so much in knowing how to parry and thrust against the other side's maneuvers to score the most points. In fact, Wheeler repeatedly emphasizes that pushing for the best possible deal is not necessarily to a negotiator's advantage. Sometimes an overly aggressive approach will cause the other side to walk away, and sometimes getting more than your fair share will end up costing you in the end.

Instead, being a good negotiator is more about being in tune with the needs and desires of the other side, the way that good jazz musicians or theatrical improvisers respond to what they hear from their counterparts. It's about having a plan and then throwing that plan out the window as soon as you encounter the unpredictable response of the other side. And it's about learning how to treat our adversary as a partner in a project that requires more collaboration than competition.

Tuesday, May 5, 2015

Doug Noll show

I was interviewed recently by California mediator Doug Noll, on topics ranging from the business of mediation, to the decline in joint sessions, mediation confidentiality, and mediator certification. I also had a chance to trot out some of my pet theories about how to reform our justice system in general, and how mediation training is helpful in every walk of life, not just in training to become a mediator.

The audio broadcast can be found here.

Sunday, April 19, 2015

Applied decision theory

Richard Birke, a law professor at Willamette University, gave a talk at the ABA Dispute Resolution conference expressing frustration with the term "Alternative Dispute Resolution." The term is too limiting to describe the many ways that the skills of negotiation, mediation, and other forms of conflict resolution can be applied in practice. It's also inaccurate, since "alternative" means of resolving disputes probably comprise the vast majority of resolutions.

In the status hierarchy of law schools, the field of ADR has always been treated as something of a stepchild, not considered as prestigious as traditional subjects like Constitutional Law or Contracts. It's not clear that the study of conflict resolution even belongs in law school, since law comprises only a small part of the syllabus. Yet Birke is finding his colleagues in more traditional legal subjects, especially the more esoteric ones like Labor Law, wondering if any of their students will ever use the information they are imparting. Meanwhile teachers of conflict resolution, which embraces concepts from economics, psychology, and a myriad of other disciplines, and not much "law" at all, can see immediately the usefulness of the skills they are teaching. We all benefit from learning how to negotiate and how to solve problems.

Not only are the skills being taught in conflict resolution studies useful to pretty much anyone who has to interact with other human beings, those skills find practical application in a number of new career paths for attorneys (and also non-attorneys). While graduates of mediation training often have a hard time finding work as traditional "mediators," they can apply their skills to solve problems for clients in ways that traditional lawyers may be ill-equipped to handle. ADR specialists can help clients re-structure their businesses, deal with succession issues, avoid litigation, assist with contract negotiations, or any number of other conflict management and resolution scenarios.

Birke thinks we need to come up with a new name for this field, one that better expresses the wider array of applications of its teachings. His suggestion is "Applied Decision Theory," a name that might introduce its own set of confusions; but at least avoids some of the negative connotations of "Alternative Dispute Resolution." He recognizes the challenges of describing the field of study encompassed by this new term. And he also acknowledged the large problem of how to market this specialty, both to prospective students, and to potential clients who are accustomed to thinking that if they have a problem with somebody, they should probably call a lawyer to solve it, expecting that lawyer to employ an adversarial approach. It will probably take a while before it occurs to people experiencing injury or dealing with other forms of conflict, that they should call their local applied decision theorist.

Saturday, April 18, 2015

Re-living trauma

love to know
Einstein supposedly said that the definition of insanity is doing the same thing over and over again expecting different results. I learned this week that even though research has shown for about 20 years that grief counseling does not work--in fact it increases the stress levels of those being counseled--we  haven't given up on the practice. In a lecture at the ABA Dispute Resolution Conference, Professor John Medina explained how grief counseling as traditionally practiced, which involves asking the traumatized victims to recount their experiences shortly after the traumatizing event, can cause these victims to enter into a vicious cycle of rumination on the event and their part in it that does not help them recover. In fact, it can leave affected persons even more impaired.

Jim Pennebaker, a professor at the University of Texas developed a more sophisticated variant of grief counseling, in which victims are asked to wait three weeks, and then engage in writing down a description of the event on successive days. The waiting period is designed to take advantage of the natural process by which unpleasant memories can fade. And in the process of writing a story about the traumatic event, the critical instruction, which apparently makes all the difference, is to view the event as if from the disinterested eye of a neutral observer or cameraman. After doing that, stress levels and other harmful physical and mental effects from the trauma, pretty consistently go down, often close to baseline levels.

This research seems to have obvious implications for conflict resolution, though these implications have apparently never been studied or proven. We know that the traditional litigation process, and even mediation the way it is often practiced, causes participants to experience anew the negative effects of the original perceived injury, and even gives them the opportunity to receive and inflict new injuries on opposing parties. The grief counseling studies suggest that this kind of repetition of trauma is detrimental to reducing stress and other emotions that have been stirred up by conflict, emotions that need to be addressed before conflict can be resolved. We also know that one goal of mediation is to help parties view conflict more objectively, and even to learn to understand the opposing party's point of view to some extent. All of that suggests that simply asking parties to "vent" their anger or other feelings about the opposing party may be harmful to the process of resolving conflict. On the other hand, helping parties talk about the underlying events in a more objective manner may help them arrive at a more rational state conducive to resolving the dispute.

Wouldn't it be nice if someone would do the research that might help to prove what works and what doesn't, so that eventually we stop doing, over and over, the things that are unhelpful?

Measuring ADR effectiveness

The state of Maryland commissioned a cutting edge research project that has succeeded in measuring the effectiveness of the state's court-connected ADR program in limited jurisdiction courts. This study attempted to do much more than track settlement rates achieved through the program; the researchers also assessed the satisfaction of participants with the system, comparing the results with control groups of litigants who did not utilize the program. They found that participants who achieved settlement through ADR processes were most satisfied with court than those whose cases were adjudicated by the court. Even more tangibly, those cases were more than 20% less likely to return to court for enforcement or other follow-up action, a finding of considerable cheer to court administrators attempting to secure ADR funding from the legislature.

The study also attempted to measure more precisely what features of the ADR process participants found most beneficial, such as whether issues were addressed by the court, or whether participants took responsibility for their actions. These questions found significant gains through the use of ADR.

Drilling down even more deeply, this study even attempted to measure what techniques used by court mediators were most effective. This effort required the researchers to monitor mediations, code various types of mediator interventions, and correlate those with participant responses. They could thereby determine whether techniques such as eliciting information from participants, or reflecting what participants told the mediators, or making suggestions to the parties, were more successful in achieving agreements as well as satisfaction by the participants.

This research found, for example, that eliciting solutions from the parties had a positive impact on reaching agreement in mediation. On the other hand, using more evaluative or directive techniques had some negative long-term impacts. And participants reported feeling less satisfied with caucus-style mediation than those who relied more on joint sessions.

Not all of these results have been published yet, but more information about this study can by found at www.marylandADRresearch.org

Monday, April 6, 2015

Woman in Gold

About halfway through the new movie Woman in Gold--which tells the story of Maria Altmann's lengthy legal battle to recover the famous Klimt painting of her aunt from the Austrian government--the parties try to resolve the dispute by mediation. At the mediation, Altmann (played by Helen Mirren) offers to allow the Austrians to keep the painting if they will only acknowledge that it was stolen property (looted from her family by the Nazis), and pay some amount in compensation. It was a framework for negotiations that most mediators would jump at, because if the framework were accepted by the other side, the only thing left to negotiate would have been the amount of compensation. But the Austrian representative refuses even to consider admitting that the painting was stolen, and Maria and her young attorney walk out of the negotiation.

At that point, Altmann's side felt fairly confident of their legal position. Their main risk was that Maria would not live long enough to see the legal battle through. So they agreed to arbitration in Austria. After the arbitration was decided in their favor, the same Austrian representative attempted to re-instate a version of the deal discussed at the mediation. Too late, says Maria. She now feels so abused by the Austrian government's resistance to her claim, and its repeated refusals to negotiate, that she is determined that the painting must travel to America, as she was forced to do herself many years earlier.

A nice example of how opportunities to resolve conflict at mediation are often squandered, and how litigation opens old wounds and makes problems more difficult to resolve in a consensual manner. And how winners are not usually magnanimous in victory. Rightly so, it would seem in this case. So what was the value of mediation in a do-or-die case like this one? At the very least it reminded the victors that they had made a reasonable settlement offer that the other side should have accepted. That experience justified Altmann's refusal to make any concessions to her adversary after her victory.

Friday, April 3, 2015

Three options

President Obama's statement announcing the framework agreement reached with Iran this week outlined the three options the world has for preventing Iran from acquiring nuclear weapons.
First, we can reach a robust and verifiable deal -- like this one -- and peacefully prevent Iran from obtaining a nuclear weapon.
The second option is we can bomb Iran’s nuclear facilities, thereby starting another war in the Middle East, and setting back Iran’s program by a few years -- in other words, setting it back by a fraction of the time that this deal will set it back.  Meanwhile we’d ensure that Iran would race ahead to try and build a bomb.
Third, we could pull out of negotiations, try to get other countries to go along and continue sanctions that are currently in place or add additional ones, and hope for the best -- knowing that every time we have done so, Iran has not capitulated but instead has advanced its program, and that in very short order, the breakout timeline would be eliminated and a nuclear arms race in the region could be triggered because of that uncertainty.  In other words, the third option leads us very quickly back to a decision about whether or not to take military action, because we’d have no idea what was going on inside of Iran. 
The three options are familiar to many people embroiled in conflict, and basically boil down to (1) accepting an imperfect agreement, (2) escalating the conflict, or (3) maintaining the status quo. As the president points out, the third option may be unstable, and is likely to lead back to a decision to escalate the conflict. Thus, most of the time, efforts to resolve conflict devolve to only two options: deal or no deal, war or peace, acceptance or rejection.

I wrote about this problem in a prior post, but it bears repeating: Those who are opposed to the deal on the table only cloud the issue when they compare it to some hypothetical perfect deal. To be honest, they should acknowledge that the only real alternatives to the deal are escalation of the conflict or maintenance of an uneasy status quo.

That doesn't mean parties should always take the deal. But they should understand that rejecting the deal means that they are choosing to perpetuate the conflict, rather than resolving it.

Tuesday, March 24, 2015

Thirteen Days in September

Speaking of peace in the Middle East, I've been reading the new book about the Camp David negotiations by Lawrence Wright. Surprisingly, reading this account made me feel a little more hopeful about the prospects for peace between Israelis and Palestinians, the great unfinished business of the Camp David accords, even though the conventional wisdom in light of Prime Minister Netanyahu's recent re-election is that resolution of the issues in the territories is now a long ways off. The reasons for hope lie in recollecting that if anything, Menachem Begin was an even more belligerent character than Netanyahu is today. Begin was reluctant to concede on any issues, whether the status of Jerusalem, or Jewish settlements in Sinai, or withdrawal from the occupied West Bank. Yet even this most difficult Israeli leader, a former terrorist himself, was finally able to recognize the benefits of giving enough ground to make peace with Egypt. And Sadat, of course, eventually gave his life for this cause. It shows that under the right circumstances, even the most intransigent of parties--perhaps only the most intransigent of parties--can find the courage to make peace. While there are good reasons to be pessimistic these days about the prospects for resolving the conflict between Israelis and Palestinians, those who think it would be impossible for Netanyahu and Abbas to do something similar to what Begin and Sadat accomplished in 1978 may be speaking prematurely.

I was reading the book, not so much as a mirror to contemporary affairs but rather as a case study of a successful mediation. Even though the Camp David negotiations were so large in scale as to involve three national governments, 13 difficult days, a large number of issues, a weighty sense of history, and a great variety of personalities within each of the three camps, these negotiations went through stages that would be familiar to many mediators of much simpler disputes. The process started with the probably necessary but ultimately unsuccessful joint session. After reaching impasse, Carter presented a mediator's proposal, followed by threats to walk out by each side in turn. The parties had to be persuaded several times to return to the table, until they finally reached exhaustion and breakthrough at the end. The framework documents were not signed until the end of a grueling day and night of hard bargaining, at a point where the parties could not effectively concentrate on the details. After Camp David, the talks almost derailed again during the documentation of the final peace treaty.

Both the Israelis and the Egyptians initially approached these negotiations as do many parties entering into mediation: they failed to recognize any weaknesses in their own positions, or the need to give ground. Neither side was fully committed to the negotiation process; both were ready to walk away if agreement could not be quickly reached on something close to their terms. Both viewed the mediator's (Carter's) role as someone who would somehow make the other side give in to their demands. As Wright explains: "Sadat had assured his delegation that the summit was a simple affair. He would present the Egyptian proposal; the Israelis would spurn it; then Carter would step in to pressure Begin to accept the Egyptian offer." (p. 52)

The Israeli side made a similar mistake, focusing too closely on attacking the Egyptians' initial proposals, without realizing that Sadat had a fallback position if he could only get some of the hardline elements in his own delegation to go along. Carter was able to break this impasse in part by revealing to the Israelis, perhaps in breach of Sadat's expectation of confidentiality, that the Egyptians were prepared to make further concessions.  (p. 115)

At that point, before agreement had been reached on many points, the Americans took on a role that many mediators are reluctant to assume even after parties have reached agreement: the responsibility of drafting the settlement agreement. That way, instead of reacting to and rejecting each other's proposals, both sides would wait for the American single draft and propose modifications. Probably this technique was the only way to move these negotiations forward. Perhaps it only worked because the mediator in this situation was itself a powerful, interested player, with the ability to reward or punish either one of the parties.

Even after the American draft had gone through multiple revisions, however, it still took an enormous amount of work to get both sides finally to accept the reality of reaching agreement. It took repeated reminders of the enormous cost of failure, and the great benefits of success. And even that was not enough. In the end, it took leaps of faith on both sides to embrace the cause of peace.

Mediation, in its ideal form, is supposed to foster trust and understanding between the parties in conflict, with the mediator acting only as a facilitator, not as an arbitrator imposing solutions on the parties. Wright shows that at Camp David, this did not happen. If anything, Sadat and Begin became more hostile and distrustful of each other as they were forced to spend more time confined in this remote location. Carter was also compelled to do much more than act as a facilitator, using all of the power at his disposal as President of the United States to compel the parties to reach agreement. Camp David can be faulted for failing to achieve comprehensive peace. On the other hand, what this flawed process did achieve--peace between Egypt and Israel--has proved lasting and remarkable.

Saturday, March 21, 2015

Mandatory mediation

At the Orange County Mediation Conference yesterday, one of the lunchtime speakers, Judge Nakamura, who is chair of the ADR committee of the Orange County Superior Court, mentioned that the court's existing mediation program has been poorly utilized. He seemed puzzled by this problem, since the panel of experienced court-connected mediators has a high success rate in resolving cases. And since these mediators agreed to charge only $150/hour for court-referred cases, their services are a relative bargain as well.

Judge Nakamura's proposed solution is a pilot program in Orange County for mandatory mediation of civil cases. He believes this would take legislation to implement, and he urged those attending to contact their representatives in Sacramento to promote this idea. Most users of the California court system are aware of the drastic cutbacks in court funding that have contributed to delays and slower service in court. Something should be done to try to alleviate these problems. As the judge mentioned, if the court can require parties to meet and confer before filing demurrers and other motions, why not require some form of negotiation or dispute resolution procedure to attempt to resolve the entire case?

Cheers to Therese Gray, and other members of her committee, for another informative and successful conference, where we also heard Jack Goetz and Barbara Brown talk about SCMA's mediator certification initiative, and Woody Mosten deliver a thought-provoking speech on the need for informed consent in mediation.

Friday, March 20, 2015

Patent litigation

At South by Southwest this week I attended a program on patent reform featuring representatives from both sides in the "patent troll" debate. Though there was disagreement on the nature and extent of the problem, most of the panelists seemed receptive to proposed solutions such as making it harder to get patents issued, imposing stricter pleading requirements, regulating demand letter practices, or allowing fee-shifting to discourage meritless litigation.

I wondered, however, whether increasing the size of the hurdles on the litigation track might in some cases only give parties new issues to litigate over. If the cost of litigation is what gives patent "trolls" leverage to demand settlements, then the solution might instead lie in reducing the cost of litigation. Maybe by streamlining procedures, restricting discovery, reducing motion practice, and limiting opportunities for other litigation activities that drive up costs, we could reduce the leverage of those who demand payment to avoid the high cost of litigation.

One of the panelists worked for a substantial tech company that has spent a lot defending itself against so-called "trolls." Even though he complained about the high cost of litigation, he seemed to take pride in his company's willingness to take a stand in these cases. I asked why, if we were interested in reducing the cost of litigation, would we want to create new issues to argue about in lawsuits. Instead perhaps we should consider taking some steps that would actually make litigation less expensive. Several members of the panel dismissed the idea. arguing that discovery, motions, and other litigation tools are necessary to smoke out and fight meritless lawsuits.

To my mind that suggests that those who are complaining about the size of the hole we have dug ourselves into are also involved in digging that hole deeper.