Sunday, January 27, 2013

Picture it settled

Don Philbin, a Texas mediator, has developed some amazing software that allows parties and mediators to make the whole negotiation process more rational and predictable. The software is now available at I've heard Don talk about his techniques before, and have borrowed some of his ideas in a few mediations by making crude graphs embodying part of his methods. Basically what you do is ask the attorneys to rank the probabilities of various possible trial outcomes, from the chances of a defense verdict, to some intermediate levels of recovery, to a home run for the plaintiff. Then you can connect the dots by drawing two curves representing each party's best assessment of the likelihood of a range of possible trial outcomes. Typically, the defense curve bulges up on the left side of the scale, in the modest recovery range, while the plaintiff's curve bulges up on the right side, in the substantial recovery range.

The next part of Don's analysis starts with inputting the parties' opening settlement offers and demands and plots subsequent offers and demands on two converging lines. The results, which might look something like the picture below, tend to follow predictable patterns. I made this diagram by entering some made-up numbers into the software demo, trying to create one plausible settlement scenario. We've all seen negotiations like this, and now we can represent them graphically, in a very professional looking way.

What this does is take some of the mystery out of the negotiation process, and I think that's a good thing. Often parties are leery of entrusting the resolution of an important lawsuit to a process that can sometimes resemble a rug bazaar or a game show. It's hard for participants to believe in a process in which the outcome seems determined by which side has the best negotiating tactics. Tools like this software can remove some of that gamesmanship. Used properly, the outcome is determined, not by a mysterious game of poker, but by examining both parties' best assessments of the real value of a case. Each side can rely primarily on their own evaluation of costs and risks, and take opposing counsel's assessment for whatever they think it is worth. These graphs also tend to reveal that there is an element of posturing in both sides' predictions, and that the real value of a case is usually somewhere in between the value that each side represents to the other. What the software does is help guide the parties to an outcome that makes sense based on their real or imagined predictions of costs and risks, and then graphically displays those results to help people feel more comfortable with the process and make more informed decisions.

Thursday, January 24, 2013

Case management conferences

The grand unwelcome budget-cutting experiment in which California courts are currently engaged may result in the undoing of reforms courts have developed over the past several decades to better manage their caseloads. Ideas that both the federal and state systems now consider best practices, such as the individual calendar system and closer judicial involvement in pre-trial proceedings, are in danger of being thrown out. Case in point: the LA County Superior Court, the largest local court system in the country, is seeking to jettison case management conferences, one of the main tools the court has at its disposal to check in with the parties early in the case and help steer cases to resolution. The court is also planning a return to master calendars for some categories of civil cases. The only rationale for these changes is that this kind of individualized case management consumes a fair amount of judicial and administrative time. But scrapping case management conferences could leave the court with no contact with counsel unless there is motion practice--and the court is also trying to discourage motion practice! The danger is that these unsupervised cases will simply languish in the system and contribute to increasing backlogs.

If only the courts could figure out a way to save money and continue to speed cases to resolution. But wait! Wasn't mediation supposed to do that? Right now a fairly large proportion of the court's caseload is sent to mediation, which has a high success rate in resolving litigated disputes. Even if cases are not resolved at an initial mediation session, the commencement of settlement negotiations in mediation often bears fruit weeks or months later. Unquestionably, parties are able to settle cases with the assistance of mediators that they would have had difficulty resolving by themselves. These dispositions save court personnel time in reduced motion practice, settlement conferences, and trials.

With the courts in financial crisis, one might expect them to propose even greater use of outside ADR procedures. Ironically, however, the court's mandated budget-cutting will more likely lead to less ADR. That's because the proposed reduction in judicial supervision will create fewer opportunities to prod the parties into seeking mediation or other alternative dispute resolution procedures. Leaving the courts without an effective procedure to refer cases to ADR also raises questions about the court's ability to comply with Code of Civil Procedure sections (C.C.P. 1141.10 et seq. and C.C.P. 1775 et seq.) that mandate the referral of certain categories cases to arbitration or mediation. The courts will need to design effective alternative procedures to accomplish the same result, and it is not clear that they have the resources to do so. 

To some extent, the courts may be able to rely on a changed culture of increased reliance on mediation. If litigants like mediation, they will continue to seek it out. They might have to pay more for the service if it is only available from the private market (since the court is also proposing to abolish the administration of its own panels of outside, largely volunteer, mediators), but the cost is likely worthwhile in a lot of cases.

But in many cases, inertia or other forms of reluctance must be overcome to refer cases to mediation. There are transaction costs involved in even entering into a discussion with opposing counsel about the selection of a mediator, and there are the costs of mediation itself. Some parties fear proposing mediation because that might be perceived as a message of weakness. Many parties and attorneys have doubts about whether a case is "ready" for mediation.

All these costs, fears, and doubts are reduced when the courts have a ready mechanism for referring cases to mediation, which litigants increasingly viewed as a necessary step in pre-trial procedures. Without that resource, the parties are going to be left more to their own devices, and  mediators and courts will be challenged to develop new means of encouraging them to resolve cases outside of court.

Sunday, January 13, 2013

New Rules

I find myself charged with an unexpected project, trying to figure out how to deal with the probable demise of one of the largest court-assisted ADR programs in the country. At the same time, the court system is also implementing drastic funding cutbacks that are likely to increase backlogs and reduce the availability of court services, suggesting that mediation is needed more than ever to resolve disputes that the court system is less and less capable of resolving. The elimination of funding for the LA County Superior Court ADR program, expected to take place by June of this year, combined with these other cutbacks, presents a unique opportunity for other organizations--such as the Southern California Mediation Association, of which I recently became Vice-President--to step into the void. Not that we have the capacity to run a program of that magnitude. But we do have the chance to design something that will provide a similar service to many litigants, and might serve our members better.

To do that requires re-thinking the elements necessary to make a mediation program attractive to litigants and the court, as well as to make it work better for mediators. It requires reconciliation of potentially conflicting interests, something that mediators are supposed to be good at. It also requires consideration of marketing, administration, and cost. The project will involve breaking some old rules, and making some new ones. 

We might start by thinking about how the existing system works. Over the years, the LA Superior Court mediation panel has changed the culture of the court. When parties used to make their first appearance in a civil case, the judge and the parties' attorneys would mainly talk about setting deadlines and trial dates, and scheduling motions and discovery. Judges still do all that, but now they spend just as much time advising attorneys about available settlement procedures, setting mediation completion dates, and referring cases to various ADR programs. The default selection is currently the court's own pro bono panel (now called random select), which is free for the first three hours, and requires minimal effort by litigants, but which assigns mediators to parties on a random basis. The court also maintains a party select panel of generally more experienced mediators, which requires litigants to pay a reduced rate for the first three hours of mediation ($450, or $150 per hour), but allows litigants to select a mediator of their choosing. Currently usage of the party select panel is quite low in most of the branch courts, but has risen significantly in the Central downtown courthouse and several others.

I think that professional mediators and aspiring professional mediators hope that this culture of referral to ADR is now so deeply ingrained that litigants will seek mediation out even if there is no longer any court program to make it easy for them. A lot of mediators are ready to say good riddance in particular to the free panel, but many rely on that panel to provide experience, and a means of building their reputations. (See my prior post on whether the court's elimination of ADR administration will mean the end of free mediation.) The larger question is what happens to the whole system of processing cases in the absence of an administrative apparatus that assigns cases to mediation, makes sure that panel mediators are at least minimally qualified, and follows up to make sure that mediation is completed. The expectation is that usage of mediation services will probably drop. A lot of attorneys might go back to the old-fashioned do-it-yourself style of settlement negotiation if the court won't assign them a free mediator. Therefore, to maintain a high volume of cases for mediation, we would presumably want to design an alternative program that is as simple and valuable for the participants as the existing program, in addition to reminding them that mediation works better than doing it yourself.

Maintaining a high volume of referrals is not the only goal, however. The court program has been criticized because it sends a lot of cases to the random select panel whether the parties are likely to benefit from mediation or not. The court program also allows parties to select free mediation even in cases that probably don't justify that service. A lot of mediators believe, with justification, that if people don't have to pay for the service, they will not value it as highly, and they will be less likely to put in the time and effort necessary to make it successful. In other words, a lot of litigants who are referred out to a three hour free mediation view it as a pro forma step they must go through that in most cases won't resolve the dispute precisely because it is free and because it requires so little effort from the parties. There is no reason why outside mediation providers should replicate these defects in the court program.

A program designed by the court is necessarily going to serve, primarily, the needs of the court. And because that program was designed by judges and lawyers, it is also going to be replete with rules and it operates under the threat of sanctions. The court program contains detailed rules governing appointment to the court panels, rules governing the assignment of cases, rules requiring completion of mediation by specified dates, and consequences for the failure to abide by these rules.

A program designed by mediators, on the other hand, ought to reflect the values of mediation, instead of the values of the court system. A system designed by mediators should be voluntary, meaning that parties should not be coerced or compelled to participate. (A system devised by mediators in fact must be voluntary, as mediators have no power to make anyone do anything.)

Such a system should also be flexible, meaning that parties and mediators should have the ability to design a process that meets the needs of each case. A flexible process, for example, might start with a telephone conference call with the mediator, and perhaps involve a series of meetings, rather than be expected to limit itself to a one-time, one-day or three hour event.

A system designed by mediators should be participatory, meaning that it should allow parties to control the conduct and outcome of that process themselves. The parties should be able to choose their mediator, and decide how much they are willing to pay.

The court system currently takes some of those choices away from the parties, particularly if they select the default option of the random select panel. That has the virtue of saving parties the trouble of haggling over the selection of a mediator, but limits their ability to select someone they think is appropriate to their case. Ideally, however, a more party-centered mediation system  should allow participants to specify the criteria they think are important, e.g., whether they want a mediator with subject-matter expertise, whether they want a lawyer, judge or non-lawyer mediator, whether they need a mediator with substantial experience, and how much they are willing to pay. A voluntary, flexible and participatory system would then assist the parties in selecting a mediator that satisfies their desired criteria. Such a system would also allow mediators more leeway in determining their own rates and procedures.

A mediation referral system designed by mediators should operate with a minimum of rules. It should be helpful. It should be friendly. It should be easy to use. It should serve the needs of a number of divergent types of users and providers of mediation services. It should be, in short, everything that courts are not.

(SCMA will be hosting a town hall meeting on the topic of responding to the court system's impending ADR cutbacks, this coming Tuesday, January 15. For more information, visit the SCMA website.)

Thursday, January 10, 2013

How not to talk about guns

Piers Morgan's interview earlier this week with radio host Alex Jones has gotten lots of attention, due to Jones's seemingly-unprovoked fiery outbursts and threatening manner. Morgan probably accomplished what he wanted to accomplish by having Jones on the show. He exposed the raving right wing conspiracy theories behind at least some Americans' attachment to guns, and probably scared a lot of people already sympathetic to gun control.

At the same time, however, Morgan probably didn't convince a lot of people who might be sympathetic to Jones's views, and he didn't even begin to engage in a constructive dialogue about responses to the problem of gun violence that we might get most people to agree on. Was that Morgan's fault? He seemed so calm and reasonable, while Jones came off as hostile and belligerent. What if anything, did Morgan do to set up that dynamic, and what could he have done differently, if he were genuinely interested in having a reasonable dialogue about gun control? The first thing was Morgan's choice of guest, obviously. There are lots of gun advocates Morgan could have asked on his show. Why did he choose this guy?

Even before the interview, Morgan starts off by stating his "position" on the issue. As noted in my previous post on this topic, we won't get too far in any dialogue about gun control by arguing over positions. The only way to find common ground on this topic is to talk about our common interests in protecting the safety of children and other innocent people.

Morgan never really engages with Jones on any of the points Jones is trying to make. Instead, Morgan, acting like a sly cross-examining attorney, demands that Jones answer a series of factual questions, such as whether the gun homicide rate is lower in Great Britain than it is in the United States. Jones had already conceded that point, however, and became outraged at Morgan's attempts to limit the discussion to what he called little statistical "factoids" like that. Morgan never asked the right questions, which would start by getting his guest to agree that all of us are interested in reducing horrific incidents of gun violence, and then proceed to analyze various ways of accomplishing that result.

In addition to asking the wrong questions, Morgan did something else to inflame the situation. He asked Jones several times to calm down. This is a clever ploy, because it seems so reasonable, but was probably the worst thing he could have done if he really wanted to have a civil discussion. Morgan probably knows that very well, as he is an experienced interviewer. If you are genuinely trying to get a hysterical person to calm down, the last thing you do is ask them to calm down, because that is only challenging the basis for the person's anger. Instead, you need to recognize and respond to the person's anger.  You need to say something like, "you're really angry about this issue. I can see you feel very passionately about it." Had Morgan done that, Jones would have most likely responded by saying, "hell yes, I'm angry. I'm passionate." And that would have been the first step to getting him to talk in a more reasonable manner. (I discussed this technique, called affect labeling, in a previous post.)

But Piers Morgan had no interest in getting his subject to talk in a more reasonable manner. He did whatever he could to inflame him and expose him, saving the coup de grace of asking about 9/11 conspiracies for the end, just so he could portray anyone opposed to gun control as a nut.  That's probably just what Morgan wanted to accomplish. But what he failed to accomplish was to actually engage in a reasonable discussion about the issue of gun control And that was mostly Morgan's own fault.

Wednesday, January 2, 2013

Who won?

Yesterday, Congress managed to pass legislation avoiding some of the potential negative effects of the so-called "fiscal cliff." Most political analysts are trying to figure out whether this negotiated outcome is a victory for Democrats or Republicans. That is the wrong question to ask. The right question is whether the deal is better for each side than the alternative of failing to make a deal. Since the public, as well as the stock market, would have looked very unfavorably on the failure to make a deal, the agreement is clearly a win for both sides. Whether one side or the other gave up more of their original positions to achieve the deal probably reflects the relative bargaining strength of each side. In this case, bargaining strength is measured by public opinion, as well as the ability of each side to garner votes supporting their position in Congress.

Even though the amount each side needed to concede is primarily determined by their political power, most of the partisans on both left and right seem focused on the negotiating tactics of their respective leaders. Many partisans are highly critical of the deal, complaining that their leaders failed to hold firm enough to their initial negotiating positions, and surrendered too much to the opposition. These Monday morning quarterbacks are too concerned with technique, and fail to recognize the decisive importance of political power.

I happen to think it is usually poor form to second guess the negotiators from your team. When I come home from the supermarket lugging many bags of groceries, and one of my kids asks why I bought this brand of peanut butter instead of another brand, I don't find that a helpful question, and I don't usually appreciate having to justify my choices. When clients or co-counsel ask me whether I asked a witness a question at a deposition that I have already taken, I don't find that kind of question helpful either, because the transcript will show all the questions that were asked, and if I forgot something, there is not much to be done about it after the fact.

Similarly, it drives me a little crazy when people who did not participate in settlement negotiations second guess the outcome. These non-participants cannot fully appreciate all of the reasons why the deal turned out the way it did.  And there is no point in comparing the deal that was achieved to some other hypothetical deal that some second-guessers on either side think they could have achieved if only their superior negotiating skills had been brought to bear. Even if they think they never would have given up on a particular point, they can't say for sure what the other side would have done in response to that intransigence. Maybe they would not have obtained any deal at all.

Therefore, the only question that should be asked is whether the deal made by the leaders we chose, is better than no deal at all. Considering that the "fiscal cliff" bill passed by a margin of 89-8 in the Senate, the answer to that question would seem rather obvious, at least to about 90% of the members of the Senate. The only bills the Senate passes with that kind of margin are the kinds that declare our love of motherhood, the flag, or apple pie. And in the House, where Republicans have until now stood united in their opposition to any kind of tax increase, we saw 85 Republican members vote to support the package, the final bill passing by the landslide margin of 257-167.

A lot of people are worried that this deal did not solve as many problems as we hoped to solve. A lot are worried that we put off some difficult decisions, and will have more difficult battles ahead. Personally, I am cheered whenever I see two groups locked in bitter conflict able to agree about anything. However small and halting that agreement, it can be used as a stepping stone to build larger agreements.


Prior posts in this series:
I.   Openings - The parties make unrealistic opening offers and demands.

II.  Impasse - Negotiations break down in the middle stages.

III. Plan B -  The parties explore the alternatives to a negotiated agreement.

IV. End game -  The parties finally abandon previously inviolable positions.