Sunday, August 30, 2015

Straight Outta Compton

Who would have thought that the new movie, Straight Outta Compton, in addition to its great story and great music, would also contain some great lessons about negotiation? The main lesson being about the dangers of creating a partnership deal that is not fair to all of the participants. According to the movie's version of events, the leader of the group NWA, Eazy-E, and the manager Jerry Heller, presented the other members with a deal giving them a much smaller share of the profits than Eazy-E was taking. Followers of the school of aggressive negotiation can justify this hard bargain because it was originally Eazy-E's company and he put up the money to get the band's first record made, and also because the ethics of that school of negotiation support taking whatever you can get, and letting those on the other side of the table look out for themselves.

The results of driving such a hard bargain in this case were disastrous. The group's talented lyricist, Ice Cube, refused to sign and left the group. Eventually, the brilliant composer Dr. Dre also left the group. Both these talented musicians went on to have spectacular solo careers, while Eazy-E is shown losing almost everything. Experts on negotiation stress the importance of leaving something on the table, and making the deal fair to other parties, particularly when one has to work with those partners in the future. And particularly when those partners create so much of the value for the group. (For example in Michael Wheeler's book The Art of Negotiation, discussed in a previous post, the author provides many examples of aggressive negotiators blowing deals by demanding too much, or gaining deals that cost them in the long run.) Because Jerry Heller and Eazy-E failed to observe those rules, they ended up much worse off than if they had treated their partners fairly.

trailer
But just in case anyone thinks that this film about a bunch of tough guys only illustrates the value of "nice guy" negotiating, the movie also contains some examples showing that taking a "tough guy" approach can also be effective. At one point, Ice Cube is shown smashing up his record producer's office with a baseball bat to convey his displeasure at the size of his royalty payments. It's not a tactic I can recommend, but it sure seemed to make the guy a lot more pliable the next time they met. Dre's partner Suge Knight is also shown employing even more violent methods to make a deal, methods that lead to some short term success but long term failure. So there is also a place in negotiation for standing up and demanding what you are entitled to. To a large extent, that is what NWA stood for.

Highly recommended.

Thursday, August 27, 2015

Openings, part 2

When we meet someone for the first time, we immediately start forming impressions of them. It takes a lot to change that perception, even if they turn out to be quite different from the way we initially perceived them. Similarly with conflict. The way in which a controversy is framed does much to affect the way parties subsequently see the dispute.

Bombet
When a prospective client brings their problem to a lawyer, the lawyer is trained to sift through the client's story and pick out all of the potential legal claims. Much of the client's story is irrelevant to the lawyer, even though it may be important to the client. The lawyer then frames the story as an accusation that the other party has committed certain wrongs. What the case is "about" is then determining whether the opponent's conduct met the standards for assessing liability. 

There are a number of problems with this approach. First, the way in which the legal system defines the problem may not much resemble the problem that was originally bothering the parties. Instead, the legal system has created a new problem for the parties, by assigning them the task of obtaining a legal determination of the issues set forth in their lawsuit, rather that a full discussion of the conflict.

Second, since most cases even in the traditional adversarial system end without a full resolution of those legal issues, we are wasting a lot of resources preparing for an event (trial) that in most cases will not take place. And even in the cases that are disposed of by motion or trial, and thus obtain an adjudication of what the re-framed conflict is now about, the parties are often left unsatisfied with that resolution. And not just because the result may have gone against their side, but also because the case may have been decided based on an issue that is different from what was really troubling them.

The third problem is that the adversarial system encourages the parties to act in an antagonistic manner. The initial framing of the dispute creates new issues for the parties to contend over, and their conduct of the lawsuit or arbitration allows the parties to perpetrate fresh outrages on each other. It does not lead the parties to a different path of problem-solving and accommodation. Not right away, anyway. Before they get to that point, they are likely to inflame the dispute, and create new disputes. 

If we could get parties to frame a dispute in a more constructive way from the outset, that might lead them more quickly to more constructive methods of resolving the problem. In my prior post, I suggested that more creative use of demand letters might help create that constructive atmosphere. I think there is also a need for a more formal mechanism of initiating conflict resolution that does not require the parties to head down a destructive and wasteful path. Instead of assuming that the dispute is going to be resolved by an adjudications of the legal issues raised in the pleadings (which even in the traditional system, does not happen in most cases anyway), why not start off assuming that the dispute will be resolved by negotiated agreement, and assist the parties in that process?

It would be helpful to establish a more formal protocol for out-of-court dispute resolution, starting with a notice of dispute rather than a complaint. A complaint invites the defendant to deny the allegations, to file motions, and to raise defenses. A notice of dispute invites the other side to agree that the parties have a problem that needs to be solved. A complaint invites the other side to look for ways to thwart the progress of the action. A notice of dispute could suggest various methods of resolving the dispute, and invite the other side to suggest others.

The pleading stage of a lawsuit is usually followed by the discovery stage, a fresh opportunity for parties to battle over what should and should not be produced. Instead of launching into that battle, a notice of dispute could request an exchange of information and documents that would be helpful to resolving the dispute. It would encourage the parties to agree early in the process on what each side needs from the other.

I've been toying with this idea in my mind for years, thinking that it would be necessary to persuade the court system to change the rules and forms sufficiently to provide a mechanism for alternative forms of dispute resolution. Now that I think that's not likely to happen anytime soon, it's time for parties and lawyers to develop these protocols on their own.

Unless we believe that parties in every case need to engage in adversarial combat before they sit down and resolve the case consensually, just to get it out of their system, parties should understand the value of attempting diplomacy to resolve conflict before resorting to war. It's not that all cases must be resolved by negotiation. There is still a place for hard-fought contests over matters of principle. It's just that we don't need to start off assuming that ALL cases must be resolved by such adversarial means.