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BASICS OF NEGOTIATION
J. Alexander Tanford, 2000
1. BASIC PRINCIPLE, WITHOUT WHICH NEGOTIATION IS IMPOSSIBLE
Successful negotiation requires compromise from both sides. Both parties must gain something, and both parties must lose something. You must be prepared to give something up to which you believe you are entitled. You cannot expect to defeat your opponent or "win" a negotiation by either the power of your negotiating skills or the compelling force of your logic. This is not to say that good negotiating ability is irrelevant. In most cases, a range of possible outcomes exists. A skilled negotiator often can achieve a settlement near the top of the range.
2. MISCELLANEOUS LEGAL PRINCIPLES, IN NO PARTICULAR ORDER ! Rule 68 provides that a defendant may make a written offer of judgment, and if the plaintiff refuses it, plaintiff becomes liable for all the litigation costs if plaintiff does not do better at trial. ! The judge is permitted to participate in negotiation as long as he or she acts as a catalyst, encouraging settlement but not taking sides. If the judge becomes too actively involved, he or she may become biased against a party who is reluctant to settle, disqualifying the judge from presiding further. ! In most cases in which a settlement is reached, court proceedings can be terminated without obtaining judicial approval. Just file a stipulation of dismissal signed by all parties. See Rule 41. ! Court approval of settlements must be obtained in a few cases, especially if claims by minors are involved. ! A negotiated settlement is a contract, controlled by the law of contracts. ! Generally speaking, an agreement need not be in writing unless it involves real property, is within the statute of frauds, or a writing is required by local rule. ! If the agreement was procured through fraud or duress, is based on a mutual mistake, or lacks consideration, it may be void. Therefore, if you lie about the facts, misrepresent the law, or otherwise deliberately deceive your opponent in order to gain a bargaining advantage, the agreement you reach is voidable. ! If a settlement is breached, contract law applies in determining the remedies available to the aggrieved party -- specific performance, compensatory damages, or treating the agreement as rescinded. ! Conduct and statements made during unsuccessful negotiations are inadmissible at trial on the main issues of liability and amount of damages. See R. Evid. 408. 3. ETHICAL CONSIDERATIONS
A. HONESTY VS. GAMESMANSHIP Several ethical questions arise constantly in negotiation. ! Must negotiations be conducted in good faith, without deception or trickery? ! May a lawyer resort to cleverness and benign deception in order to reach a fair And just result? ! May a lawyer take advantage of weaknesses and mistakes by his or her opponent and accept
an unjust settlement? ! May a lawyer "bluff" during the negotiation game? The answers to these basic ethical questions are far from clear. Some people argue that negotiations must be conducted with truthfulness and candor, and that a lawyer ethically may seek only just resolutions. The kind of all-out partisan advocacy appropriate in a courtroom may not be proper in negotiation. In the American Bar Association's 1908 Canons of Professional Ethics, Canon 15 reflected this feeling that a lawyer had a moral obligation to be fair. It stated that "nothing operates more certainly to.
.. foster popular prejudice against lawyers... than does the false claim... that is it is the duty of the lawyer to do whatever may enable him to [win] his client's cause." Instead, the lawyer is exhorted to "obey his own conscience and not that of the client." Canon 22 required "candor and fairness" when dealing with other lawyers. The 1969 Model Code of Professional Responsibility forsook this ideal, eliminating the requirement of candor and replacing the lawyer's obligation to obey his or her conscience with EC 9-2: "A lawyer should determine his conduct by acting in a manner that promotes public confidence in the integrity... of the legal system and the legal profession." The latest revision, the ABA Model Rules of Professional Conduct, returns to the basic idea that you owe an ethical obligation of candor to your opponent. Rule 4.1 states that in "the course of representing a client a lawyer shall not knowingly make a false statement of material fact or law to a third person," a term that includes the opposing party in a negotiation. It would therefore be improper to actively deceive your opponent. For example, it is unethical to suggest a settlement of $100, because that is the maximum under your client's insurance policy, when you know she has $250, coverage.
B. CONCEALMENT AND DECEPTION The ethical prohibitions against making deliberate misrepresentations during negotiation are clear. Rule of Professional Conduct 4.1 prohibits you from knowingly making a false statement of law or fact at any time during your representation of a client. The rule provides no exception permitting false statements during negotiation. It covers not only false statements about the facts of the case but also false and misleading statements made to facilitate reaching a favorable agreement. Nevertheless, this is probably the most frequently violated ethical rule. The prohibition against active misrepresentation does not appear to require that you correct your opponent's misunderstanding of the facts or law, as long as you do nothing to encourage it. The Committee on Professional Ethics has stated that while a lawyer is under a duty not to mislead the opponent by misstatement or silence, he or she is under no duty to disclose the weaknesses of the client's case or correct his or her opponent's misconception of the law, even if a wrong or unjust result is reached. Rule 4.1 of the Model Rules of Professional Conduct continue to make it acceptable to take advantage of an opponent's misunderstanding. Proposed language in the 1981 Final Draft of the Model Rules that would have prohibited failure to disclose facts when such a failure would be the equivalent of making a material misrepresentation was not enacted. Nevertheless, in extreme cases even passive deception may be unethical. If you conceal facts that you know would cause your opponent to break off negotiations completely, and permit a settlement to be based on material false assumptions, you may have acted unethically. For example, it is certainly unethical for a plaintiff's attorney to proceed with negotiations in a civil case if the client has died.
C. PROTECTING THE INTERESTS OF YOUR CLIENT During negotiation, lawyers often forget that they are there to represent the interests of a client, not to engage in a battle of wits with another attorney. This gives rise to two common ethical violations: revealing confidential information without permission, and failing to adequately communicate with the
advice to an unrepresented person." No rule says anything about making settlement offers. Therefore, you presumably could make a settlement offer to an unrepresented person, but you could not advise that person to accept it. The Model Rules do not, however, impose a special duty of fairness when dealing directly with a lay person unfamiliar with the negotiation process, nor do they make it unethical to take advantage of an unrepresented person's ignorance.
E. THREATENING CRIMINAL PROSECUTION AND SIMILAR COERCIVE ACTIVITY. Under the 1969 ABA Model Code of Professional Conduct, it was unethical for "a lawyer [to] present, participate in presenting, or threaten to present criminal charges solely to obtain an advantage in a civil matter." This provision was dropped when the ABA enacted the Model Rules of Professional Conduct. There now seems to be no provision against trying to force a settlement by threatening criminal prosecution, disclosing the opponent's status as an illegal alien, filing an ethical complaint against a physician, etc. Despite the absence of a provision in the Model Rules, this tactic is probably unethical. At the least, it constitutes deceit and misrepresentation if you do not intend to go through with it. Whether or not it is unethical, it may be criminal. See State v. Harrington , 128 Vt. 242, 260 A.2d 692 (1969) (lawyer found guilty of attempted extortion for threatening to disclose adultery and turn other information over to the IRS unless defendant agreed to settlement).
4. PREPARATION
A. UNDERSTANDING YOUR CASE
It is axiomatic that you cannot negotiate a case successfully unless you understand it. You must be fully familiar with the facts, the controlling law, and the persons who are involved in it. You should have completed your interviews, discovery, and research into the applicable substantive, procedural, and evidentiary law, so that you can analyze the strengths and weaknesses of your case and your opponent's. You must know the arguments you will make about why you are entitled to a verdict and exactly what damages are reasonably recoverable. In other words, you must be ready for trial. Analyzing and understanding your case involves something other than creating arguments that might be possible if you can stretch the law or the facts. It cannot be done from an emotional perspective from which you attempt only to create plausible arguments favoring your client. You first must analyze the whole case objectively, as a juror would see it. You must be able to recognize where your case is strong, where it is weak, and what kind of verdict you are realistically likely to get from a jury. Otherwise, how can you decide what to demand, what to concede, and when to stop negotiating and take your chances at trial? The kinds of factors that affect the strength of your case include more than just whether the admissible evidence is legally sufficient to entitle you to a verdict on a particular issue. The list of factors that go into evaluating your case is long. Some of them are listed below: ! Does the complaint state one or more legal causes of action that will survive a motion to dismiss? ! Can the plaintiff offer enough evidence on any of its causes of action to survive a directed verdict motion? Are you sure the victim or major eyewitnesses will testify? ! Can the defendant offer enough evidence on any of its defenses to survive a direct verdict motion? ! In what posture will the case go to a jury? What causes of action and defenses will probably remain in the case at that time? ! What are the chances that the jury will find in your favor on the question of liability? ! If the case involves comparative fault, how will the jury allocate fault between the two sides?
Even in cases where the comparative fault doctrine does not apply, will the jury make a practical application of it during their deliberations and reduce plaintiff's damages? ! If the jury finds for plaintiff on liability, what is the most likely range of possible damage awards? In criminal cases, what sentence will a judge actually give? ! Is there an emotional factor that will cause the jury to increase or decrease plaintiff's damage award, or a judge to raise or lower a sentence? For example, if the jury likes the plaintiff, they may award higher damages. Are any young children involved? ! Will the defendant be seen as having a "deep pocket?" and the plaintiff as being in dire need of money? ! Does the case involve any controversial issues, such as drunk driving, abortion, allegations of sexual harassment, and so forth, likely to provoke extremely emotional reaction by some jurors? ! Who are the lawyers on each side? How good are they? ! Will the jury find out about the previous history and character of a plaintiff, victim or defendant? Will the plaintiff be able to introduce evidence of insurance? ! How much extra would it cost to go to trial?
B. SETTING YOUR BARGAINING RANGE IN CIVIL CASES The first step in negotiation planning is to set your bargaining range. You first need to estimate the range of likely results if the case went to trial. What is the best realistically probable outcome and what is the worst likely result? At this stage, you can safely ignore the remote possibility that an irrational jury would do something improbable. To set your bargaining range, you need to establish the upper and lower limits. The upper limit obviously is your best case scenario. Setting the lower limit is a more difficult process. In consultation with your client, you must set a point at which you would rather take your chances at trial than accept a settlement offer. To establish a realistic bargaining limit, you must predict the likelihood of receiving a favorable verdict and the probable amount of such a verdict, and the extra cost in going to trial. In its simplest form, the calculation works as follows: Suppose that a plaintiff lost a hand in a table saw accident. The evidence will show that despite a clear warning not to operate the saw without a protective cover in place, plaintiff had removed the cover. Plaintiff alleges defective design because the cover was cheap plastic easily removed or broken. You may estimate that the most optimistic scenario is a recovery for plaintiff around $250,000. However, you may calculate that a more likely average recovery is around $100,000, and you have only a 50% chance of a favorable verdict on liability. If it would cost an extra $5000 to go to trial, then the bottom of your bargaining range is $45,000. All methods of arriving at a settlement value depend on three predictions: the amount of damages a reasonable jury would award if it found the defendant liable, the likelihood it will find liability, and the additional costs of going to trial. Many attorneys simply rely on averages -- either from their own experience or from sources that report typical jury awards, such as Jury Verdict Research, Personal Injury Valuation Handbooks (multi-volume set that reports average jury verdicts according to the kind of injury, gives the likelihood of a verdict, and provides information necessary to adjust the expected verdicts based on overall verdict trends in different localities and on secondary influences such as the age of the plaintiff and the percentage of permanent disability). The problem with using averages is that they are accurate only if you have an average case. For all the reasons discussed in the preceding section, your case may have many peculiar strengths or weaknesses that make it illogical simply to treat it as average. Every case should be evaluated on its own merits. That is, after all, the way the jury will treat it. An estimate of the probable damage award consists of four components. First, uncontested
may want a nuisance removed, a letter of apology from the defendant, delivery of goods in partial performance of a breached contract, child visitation rights in a divorce, public withdrawal of a defamatory statement, a particular method of payment, and so on. Although such demands cannot easily be translated into dollars, there is an old saying that everything has its price. In a typical civil negotiation, a value must be put on them. For example, if the defendant is prepared to offer a maximum of $10,000 in settlement of a libel case, but the plaintiff demands a public retraction in addition to a monetary settlement, it is unreasonable to expect the defendant to give such a retraction in addition to the full $10,000. Both compensate the plaintiff; therefore, the defendant can expect the plaintiff to give up some economic compensation in return for the non-economic compensation. Both parties must place a value on the retraction. Is it so embarrassing to the defendant to apologize that he or she is willing to pay an extra $5,000 to avoid doing so? Is the retraction so important to the plaintiff that he or she is willing to give up all or part of the monetary damages? Only the client can answer these questions.
D. PLANNING THE NEGOTIATION The actual negotiation can be understood as a recalculation of the bargaining limit by the parties working together. If the parties can agree on the value of damages, the likelihood of a finding of liability, and the transaction costs, then calculating a fair settlement is simply a matter of mathematics. However, because of the large number of estimates and approximations involved, only rarely will the parties agree on the numbers. Places where the parties disagree create disputes that must be resolved if you are to reach agreement. This dispute resolution forms the heart of the negotiation. Your planning must identify areas of probable dispute and how you will compromise on them. This is a radically different approach than a trial plan. For trial, you prepare arguments and stratagems for how you will win a disputed issue. Your case theory contains a plan for explaining to a jury why you are right and your opponent wrong. For negotiation, you must abandon these winner-take-all attitudes. You do not win on disputed issues, you concede that both sides have legitimate points, and you compromise. On any quantifiable dispute, such as dollars or percentages, three scenarios are possible: 1) the plaintiff and defendant have independently arrived at the same number; 2) plaintiff's bottom line is still higher than defendant's maximum limit; or 3) plaintiff's bottom line is lower than the defendant's maximum limit. If all cases fell into the first category, negotiation would be unnecessary. If all cases fell in the second category, negotiation would be impossible -- the defendant would rather go to trial than take the plaintiff's lowest offer, and the plaintiff would rather go to trial than accept the defendant's highest offer. Settlement discussions, therefore, must be premised on the third proposition: you can do better than your bargaining limit because your opponent is, for some reason, willing to give you more than you think an item is worth. This phenomenon can be explained by transaction costs and risk factors. Even if both sides evaluate the case in the same way, for example, at a fifty percent chance of a $100,000 verdict, their bargaining limits will be different. The defendant may be willing to give not only the $50,000, but also an additional $10,000 to avoid fixed litigation costs and the risk of an aberrationally large verdict. Thus, the defendant is willing to give the plaintiff more than the plaintiff expects. Similarly, the plaintiff may be willing to settle for $5,000 less than $50,000 because plaintiff faces similar risks. Both parties will therefore be content if the case settles anywhere between $45,000 and $60,000. The picture is complicated by two factors that can either widen or narrow the settlement range. First, the sides may have access to different information that affects the probable outcome of an issue. For example, a defendant sued for negligence may admit to his attorney that he was negligent, causing the defense to evaluate the likelihood of a plaintiff's verdict at 90%, rather than 50%. Alternatively, the defense may discover a new eyewitness who confirms the defendant's denial of negligence, a discovery that reduces the defense's evaluation of the likelihood of a plaintiff's verdict on liability to 25%.
Second, the two attorneys simply may have evaluated the available information differently, one calculating the likelihood of a verdict at fifty percent, the other at sixty percent. It should be obvious that, while your client will accept a settlement at the bargaining limit, he or she would prefer to do better. The following sections discuss some common suggestions about how pre-negotiation planning can help achieve as favorable a settlement as possible within the range of potential agreement.
- Agenda Settlement is rarely a discussion of one issue. In most cases, the parties will have to compromise on many issues, each with its own range of possible resolutions. Negotiation, therefore, does not usually consist of exchanging lump sum offers and counteroffers, but is broken down into a series of mini-negotiations over the individual disputes. It is impossible to even conduct rational negotiation, then, unless the parties understand this concept and agree on an agenda that defines the disputes to be resolved and places them in some kind of order. Many negotiators believe that this agenda plays a crucial role in the bargaining process. You should plan in advance the issues you want to raise, and the order in which you would like to talk about them. You probably should do this in writing and bring your proposal to the bargaining table. Of course, your opponent might bring a different agenda, requiring that you negotiate about the negotiation itself -- which issues will be discussed, their order, and the procedure for structuring the process. Defining the issues themselves should not prove difficult if you have a theory of the case. Your theory should already tell you which claims you will pursue, which you will drop, and which of your opponent's claims you think are groundless. It will tell you also what the components of damages are: what kinds of injuries can plaintiff be compensated for and are they provable? Some negotiators suggest that the best order is to raise major issues first. But what constitutes a "major" issue? Some negotiators place first those issues that are objectively important -- where the most money is at stake. If agreement can be reached on the big-money issues, it will facilitate later bargaining over smaller amounts. If agreement is not reached, the parties can move to less important issues to try to start some momentum toward settlement. This approach assumes that if you start on the simple issues and a compromise cannot be reached, the parties may give up. Other negotiators suggest putting issues that are subjectively important first. They suggest that the items on which you must reach an agreement of a certain kind should be first, whether or not they involve the most money. Negotiators who use this approach offer two justifications. It may enable you to obtain concessions on the most important issues during the initial "honeymoon" period when the other side wants to show its good faith. If not, then you can break off negotiations without wasting further time. You know immediately if an acceptable compromise is not possible. This may be the best approach if you client has any non-negotiable demands. It may be that there are issues on which your client is unwilling to negotiate. For example, a defendant faced with a criminal antitrust charge may refuse to enter a guilty plea because of the likelihood of treble damages in a pending civil suit, but may be willing to plead nolo contendere. A party to a divorce action may demand custody of children and be unwilling to settle without such an agreement. If the issue is genuinely nonnegotiable, it should be placed first on the bargaining agenda as a precondition. Why take up everyone's time on other issues if your opponent cannot agree to your precondition? Most negotiators, however, prefer to raise at least some of the minor issues or the issues favoring their opponents first. They want to begin the bargaining session by making concessions, appearing reasonable, and establishing a pattern of cooperation. They want to dispel their opponent's fears that they will be "tough negotiators." The expectation is that by building a favorable atmosphere and some momentum, they will get concessions in return as the issues become more important.
Litigators stress the importance of advance planning about the precise concession points you will use. Remember that your agenda represents negotiations within negotiations. For example, if you are negotiating a personal injury case, you will have to resolve issues of liability, comparative fault, medical damages, property damages, lost income, and pain and suffering. Within medical damages may be hospital bills, doctor fees, and the cost of physical rehabilitation. Your agenda might therefore look like this:
_1. Concede contributory negligence
- Defendant's liability
- Comparative fault
- Property damages
- Medical damages_ a. Hospital bills b. Doctor fees _c. Rehabilitation
- Lost income
- Pain and suffering_
An initial offer to settle for $325,000 is really just a total of all the numbers that will eventually be plugged into this list. Your concession points should be tied specifically to particular agenda items. For example, you may make a first offer on comparative fault at 80% (best case) and be prepared to go to 50% (worst case). Do you jump right from 80 to 50 if the defense vehemently refuses to consider 80? Or do you plan several stops in between? If you plan several stops, exactly what numbers will you offer and why? Suppose your own client had dropped a beer in his lap while driving, which caused him to suddenly hit the brakes, and that only one brakelight was working at the time he was rear-ended by a speeding Greyhound bus. You might plan to concede 20 percentage points on the drinking issue, and 5 points on each of the other safety issues, based on your estimate of how seriously they would affect a jury. The process works the same way for dollar-amount concessions. Your client may have been out of work for fifteen weeks, and averaged 40 regular hours and 5 overtime hours a week, so you ask for 600 hours of lost income at $20 an hour plus 75 hours of overtime at $30 an hour, for an opening offer of $14,250. You are prepared to concede $2250 because the overtime is speculative, and another $ because there were one-week layoffs during the summer. In planning these concession points, experienced negotiators give the following general advice: ! Avoid large concessions because they weaken your credibility by communicating that your initial offer was not a serious one. ! Small concessions communicate that you have little room left to bargain, so they should be avoided unless the you are in fact running out of negotiating room. If your adversary erroneously believes you have no room left, he or she may terminate the negotiating session prematurely. ! Plan concession points on each issue in an order that permits you to move in ever decreasing amounts. This avoids the problem of making premature small concessions. ! Try to have many, rather than few, concession points (without appearing ridiculous). That may enable you to move in smaller increments than your opponent, and it will be easier for you to make small concessions to keep the negotiations rolling. ! Since you cannot change the facts and law, and since you will not be credible if you offer only a small concession on a major issue on which your position is weak, your planning must concentrate on how the issues will be defined. For example, if all medical expenses are
defined as one issue, the concessions will be large; if treated as separate issues of emergency room expenses, room costs, surgeon fees, medication, and operating room charges, each concession will be smaller.
- Bring Supporting Documents Part of your job as a negotiator is to sell your compromise proposals to your opponent. But bear in mind an important distinction: your job is not to "win" the negotiation by persuading your opponent to agree to your most optimistic position or give you everything you ask for in your opening offer. You must genuinely give something up (not just pretend to give up something you didn't really want anyway) if you expect to settle the case. But it is important that, when you make a concession and offer a reason for it, that you convince the other side of its soundness. You can best accomplish this with facts. If plaintiff expects the defendant to accept $20 an hour as the basis for determining lost income, plaintiff must prove it -- produce a paycheck stub. If defendant expects plaintiff to concede a week's income because of layoffs, defendant must prove it -- produce the newspaper article announcing it. If either side expects to make a legal argument that attorney fees can be assessed to the losing side, bring the statute or case with you that says so. Do not expect your adversary to rely on your own assurances that a fact is true. Why should your opponent believe you? You are biased and would say anything to get a larger settlement. The more documentation you can produce in support of a compromise, the more likely it is to be accepted. If you and your opponent are arguing about what the impact of the plaintiff's drinking will have on comparative fault -- you say 20%, the defendant says 30% -- if you cannot document your position, you will eventually have to either "split the difference" and accept 25%, or break off negotiations. But, if you can produce a page from a law journal article reporting a statistical study of traffic accident cases in which the authors conclude that drinking affected verdicts by 20%, then your opponent will probably have to concede that your figure is the more accurate one.
- Client sets bargaining limit. Ultimately, it must be your client who sets the bargaining limit, deciding on the bottom line of your negotiating range. You have the responsibility to advise your client and assist him or her in evaluating where a realistic bargaining limit should be set. This is not always an easy task if the client is unwilling to accept the possibility that he or she might lose.. If the client demands an unreasonable settlement or refuses to authorize settlement negotiations at all, you must either withdraw from the case or carry out your client's wishes. Many attorneys forget that it is the client's claim and that they are playing with the client's money.
5. CONDUCTING NEGOTIATIONS
A. BASIC PRINCIPLES: COOPERATION AND FLEXIBILITY
The evidence is overwhelming that cooperation is the surest road to successful settlement. Hostility, distrust, stubbornness, self-righteousness, conflict intensification, unjust demands, and attempts to gain unjustified advantages beget non-cooperation rather than concessions, and tend to cause a breakdown in the communication necessary to reach a settlement. The key ingredient in cooperation, however, is mutuality -- you cannot be unilaterally cooperative. If you are making concessions while your opponent is not, you are engaging in appeasement, not cooperative negotiation. Successful bargaining occurs when you are prepared both to be cooperative and to demand cooperation from your opponent.
The general conclusion implied by research is that cooperation begets cooperation;
(^3) See Gerald Nierenberg, Fundamentals of Negotiating (1973).
actual negotiation starts, you can suggest that you follow the outline of your proposal, unless your opponent has any objections. This forces even a reluctant attorney to discuss these preliminary issues. Even though they might not see it as agenda negotiation, lawyers consistently recommend that there be at least one prenegotiation discussion -- the extent of the bargainers' authority to settle. Two aspects of authority affect whether a final settlement can be reached: whether the attorney has authority to bind his or her client, and, in situations involving multiple negotiators, which attorney has the ultimate authority. The simplest way to find out your opponent's authority in this regard is to ask. Two other matters often are agreed upon in advance: the length of the session, and whether to use item by item or lump-sum negotiation. Time limits are important because they increase the likelihood of agreement and tend to result in reductions in demands and the elimination of bluffing as the "eleventh hour" approaches. Open-ended negotiation sessions tend to be just that -- sessions without end, in which the parties avoid final settlement and renege on tentative agreements. Negotiations also are affected by whether binding commitments are made item by item or only on lump sums. Of course, individual issues undoubtedly will be discussed one at a time and tentative agreements reached. However, many trial lawyers oppose making these settlements binding because a party who has gained an advantage may become harder to deal with as the pressure to settle diminishes, and one who has suffered a setback may be reluctant to continue. They argue that only if all agreements are contingent upon a final lump-sum settlement figure is there still as much pressure to settle at the end as there was at the start.
C. BARGAINING TACTICS^3 Experienced negotiators have suggested tactics ranging from such relatively innocuous ones as offering to split the difference when deadlocked over a trivial amount, to outright lying and fraud. Obviously, tactics involving bluffing, lying, and fraud are unethical. They also are strategically unwise, because they will probably be found out, and may make your opponent unwilling to negotiate with you. Their use even may constitute grounds for invalidating the settlement. You also should not forget that, on the whole, cooperation begets cooperation and aggressive tactics beget aggressive counter-tactics. Common negotiating tactics can be grouped into three categories: 1) procedural tactics, 2) tactics relating to the presentation of substantive issues, and 3) deadlock avoidance tactics.
1. Procedural Tactics. ! Blanketing is presenting many issues together. It can be used for a number of purposes. Many weak issues can be grouped together in hopes of achieving a concession on one or two of them. A single weak issue can be buried among strong ones. You may be able to discover how strong you opponent thinks he or she is on individual issues from the order in which he or she responds. Blanketing also can be used to gain agenda control. If you raise only a single issue, your opponent may take control of the next issue, but if you present a group of issues simultaneously, you may keep control during the entire discussion. ! Pairing is introducing two issues together so that you can make concessions on one and gain concessions on the other. This tactic often is used to present two of your weaker issues. If you discuss them separately, you might have to make concessions on both, but if taken together, you can demand one concession from your opponent, arguing that it is unfair for him or her to expect you to be making all the concessions. ! Retroactive pairing is reopening a settled issue and pairing it with a current issue to counter an unreasonable demand from your opponent. You can then demand that the issues be treated
together or that the current issue be dropped. Nierenberg uses the example of a labor negotiation in which the union demands a shorter workweek, and the employer replies that it can be considered only if the union is prepared to give up some of the holidays already agreed upon. ! Slicing the salami consists of seeking concessions in small increments -- like gaining possession of a salami one thin slice at a time. If you overtly try to take something big away from your adversary, particularly on a major issue, he or she is likely to put up a strenuous defense. However, if a big issue can be divided into smaller issues on which the stakes are low, cooperation and compromise may be easier to obtain. ! Limited authority is a tactic in which the scope of the negotiator's agency is temporarily limited by the client, or by turning part of the negotiation over to an associate with limited authority. It may occasionally be easier to obtain agreement on a couple of sub-issues first, and return to bargain more difficult issues on another day when a person with full authority will be present. This tactic has a potential drawback -- the other side may refuse to negotiate if the agent's authority is too narrow. ! Limits is a related tactic. You may set artificial limitations, especially time limits. Setting time limits can create an atmosphere conducive to compromise as long as both sides take the time limit seriously. This rarely happens because limits usually are arbitrary and bind no one. Some negotiators try to schedule bargaining sessions at times when natural time limits operate -- on Friday afternoons, a few days before Christmas or Thanksgiving, and so on. ! Boulwareism, named after a labor negotiator named Lemuel R. Boulware, is presenting a take-it-or-leave-it proposition. You make a fair offer at or near your bottom line and stick to it. This tactic is not recommended. Almost no one uses it, so you probably will not be taken seriously. Your opponent will misperceive your offer as a first offer, and will refuse it. This tactic invites the opponent to call your bluff and break off negotiations if the offer is unacceptable; therefore, it should be reserved for situations in which you are prepared to go to trial if the offer is refused.
2. Tactics relating to the presentation of substantive issues ! Association is a tactic in which you link an issue to a factor outside of the case likely to influence your opponent. For example, you can link your client's desire for a quick settlement to the opponent's patriotism if you represent a soldier about to be sent into combat. Most frequently, this tactic is used in criminal plea bargaining to link settlement to the opposing lawyer's self-interest in reducing a heavy caseload. ! Authority is a tactic familiar to all of you -- cite a case, statute, or document to support your position. ! Misdirection involves making an apparent move in one direction to divert attention from your real goal. The classic example of this is the story of Br'er Rabbit. The line between misdirection and outright fraud and lying is a fine one, however. ! Reversal involves acting contrary to normal expectations or normal procedures. For example, a union could propose that wages be cut if company profits go down. If management accepts this principle, it will be easier to negotiate that wages also should go up if profits go up. ! Mutt and Jeff is the familiar good cop/bad cop routine. Two lawyers for the same side feign an internal dispute concerning their position; one takes the hard line, offering almost no compromise, while the other appears to desire to make small concessions, and occasionally the "good lawyer" prevails. Lawyers opposing such a team may accept the marginal concessions because they seem substantial in relation to the position of the hard-liner. ! Trollope ploy is one in which a rejected demand is followed not by a concession but by a
However, you never can be certain that your opponent is negotiating in good faith unless he or she proves it by honest bargaining. How should you respond to hard tactics -- threats, ultimatums, unreasonable offers, stalling, and so forth -- that threaten to deadlock the negotiation and make settlement impossible? In most cases, you probably should accept the inevitable and terminate the discussion. Negotiation will not be successful unless both sides wish it to be.
(a) Unreasonable First Offers Your opponent may make an unreasonable first offer for one of three reasons: he or she is not bargaining in good faith, has reached a very different estimate of the value of the case than you have, or is trying it only as an exploratory tactic to test your reaction. In the first two situations, the probability of eventually reaching a settlement is extremely small. In the third situation, if you indicate a willingness to consider the outrageous offer, your opponent may interpret your reaction as an indication that you are desperate to settle at any amount and may raise his or her bargaining limit. This also makes eventual settlement unlikely. Therefore, your reaction to an unreasonable first offer should be the same regardless of the reason it was made. You should be honest and tell your opponent that the offer is way out of line and indicates that agreement is probably impossible. You can either ask for justification or for a more rational offer, or you can make your own offer. It is then up to your opponent to decide whether he or she wishes to negotiate. You should not be afraid to break off negotiations that cannot result in agreement. Some attorneys play the I-can-be-more-childish-than-you game, and counter an unreasonable first offer with a similarly unreasonable offer of your own. Obviously, this is a silly tactic if your goal is to reach a settlement.
(b) Failure to Make an Offer (Not Bargaining in Good Faith) Your opponent may refuse to make an offer or counteroffer. He or she may try to force you into changing your own offer (making concessions) without making any counter-proposal. You may be asked to change your first offer because it is too high or low, or your opponent may tender a few offers and then stop making concessions. Effective negotiation requires that both sides cooperate. If your opponent stops, it is pointless for you to continue. You should never bid against yourself.
(c) Deadlocks If your opponent refuses to make further concessions before you have arrived at an agreement, you have reached a deadlock. Deadlocks are more likely to occur when negotiating a component issue than in the exchange of lump-sum offers. A number of tactics are available when you are deadlocked. If the parties are far apart, if the issue is important enough, or if you have no bargaining room left, you may have to break off negotiations. It may be that your opponent genuinely cannot settle within your limits. In many deadlocked situations the parties will be close to agreement, the issue unimportant in relation to the whole controversy, or your opponent's last offer will be within your bargaining range, so that breaking off negotiations and going to trial is a disproportionate response. Available alternatives include: ! Offering to split the difference, if the two side are close. ! Offering to trade concessions, one party conceding on this issue and the other conceding on another deadlocked issue. ! Combining the deadlocked issue with several related issues (this may require reopening an earlier agreement) and trying to negotiate the package. ! Making a final compromise offer at your bargaining limit, making it clear that it is a take-it-or-leave-it proposition.
(d) Attempts to Reopen Settled Issues Your opponent may attempt to reopen an issue on which agreement had been reached or may try to change a negotiated agenda by adding a new issue. Obviously, this kind of tactic amounts to "unnegotiating." If unjustified, it demonstrates bad faith, and it should not be tolerated. If the negotiations are allowed to start to unravel, progress has stopped and begun to move backwards. Probably the best response is to demand that the negotiations continue, and suggest to your opponent that he or she wait until a final agreement is worked out, at which time he or she can accept or reject the package. Another tactic that can make this problem less likely to occur is to write down the points of agreement as they are reached -- it may be harder for your opponent to try to reopen an agreement that has been reduced to writing. On some occasions, a brinkmanship response -- which, in effect, threatens to break off negotiation unless the other side drops its demand to reopen or add an issue -- may be disproportionate to the controversy. Your opponent may have a valid reason for wishing to reopen an agreement. He or she may have made a mathematical error in arriving at an amount, may have discovered new facts that alter the premises on which an issue was negotiated, or may be trying to work out a way around an impasse. Before you take precipitous action, you should consider carefully whether your opponent's request is justified. Also, if the settled issue resulted in an agreement disproportionately in your favor, and you still had bargaining room left, it is probably better to reopen than risk an eventual rejection of the final settlement proposal.
(e) Walkouts Your opponent may terminate the negotiations at any time. You have no control over whether he or she chooses to bargain or decides to go to trial. A walkout may be a genuine expression of your opponent's inability or unwillingness to negotiate further, or may be just a tactic to scare you into a major concession. In either case you have two choices: offer a concession to encourage the other side to return, or do nothing and hope your opponent makes overtures to reconvene. If you have bargaining room, you probably should offer a concession. On the other hand, if you are already at or near your bargaining limit, or have already made several concessions in a row, you should wait for the other side to be reasonable. Do not let a walkout panic you into going below your bargaining limit.
E. FACE-TO-FACE, TELEPHONE, OR WRITTEN NEGOTIATION. Negotiations can be conducted in three ways: in a face-to-face meeting between attorneys, over the telephone, or by an exchange of written offers. Is there any reason to prefer one of these methods over the others? Negotiators seem to prefer face-to-face bargaining, because it allows you to judge your opponent not only by what he or she says, but also by how the negotiator appears. Face-to-face negotiation also allows you to present visual or other sensory evidence to support your position. For example, bringing a jar of effluent to a negotiating session may help convince negotiators representing a chemical plant that you easily can prove to a jury that the smell is a nuisance. Experiments by psychologists have shown that greater cooperation is achieved if both parties can see and hear each other than if they are isolated.
F. PRESENCE OF CLIENT AT NEGOTIATION. In almost every episode of the television series "L.A. Law," the lawyers bring their clients with them to a negotiation session. There are some possible reasons for doing this --it will show the client you are working on the case, it will make final agreement easier, and, if the client is a good witness or has suffered sympathetic injuries, it may convince your opponent that you can present a good case to the jury. However, the dangers (amply illustrated on L.A. Law) usually far outweigh these small
E. TACTICS
Roger Fisher and William Ury, Getting to Yes (2d ed. 1991) John Ilich, The Art and Skill of Successful Negotiation (1973) Fred Lane, Lane's Goldstein Trial Technique, chapter 7A (3d ed. 1984) M. Edwards, Settlement and Plea Bargaining (1981)
