Negotiation checklist

As we start the new year, here is a checklist for your case negotiations. Since 98% of all cases filed do not proceed to trial and since settlement negotiations are common in even the 2% of cases that do go to trial, preparing for negotiations is never a waste of time. Windows of opportunity for a favorable settlement (where leverage is in your favor) often open and close very quickly. A prepared advocate will see the opportunity while an unprepared lawyer may be too focused on the immediate tasks at hand or too fixated on the merits of her case to even be aware of the opportunity. A settlement also requires the agreement of both parties. Knowing what you want is not enough. A skilled negotiator will ask questions to uncover her opponent's hidden interests, motivations, and aspirations and will creatively put together her client's and her opponent's narratives -- which may not be consistent -- into a resolution that works for all interested parties.

One, what do the applicable jury instructions say? While negotiations and settlements often go far beyond the remedies available in court, it helps to know the necessary elements of proof and possible outcomes available in court. What will the jury instructions say? What elements must be proved or disproved by each side? Who has the burden-of-proof? What outcomes can be expected in court? Where will the case be tried? Who will be the judge and/or jury? What biases may affect how the judge and/or jury views the jury instructions, evidence, and law? Is there a prospect of the case being terminated as a matter of law? What is the likelihood of that outcome?

Two, what does each side want? What does each side and each person on each side want (including the lawyers)? If a client is a corporate entity, what do the individuals involved on behalf of the client want to achieve? Who is the decision maker? What are each client's and each person's short-term and long-term goals and aspirations? How did they arrive at these goals and aspirations? Are there objective measuring sticks for each side's goals and aspirations (e.g., jury verdicts, other settlements, certified accounting, receipts, electronic transactional data)?

Three, what are each side's strengths, weaknesses, and vulnerabilities? What does each side have that the other side needs? How valuable are those needs to each side? Are the values symmetrical or asymmetrical (i.e., would both sides value the need equally or would one side value the need more than the other side?)? Are both sides on the same timetable? Or does each side place a different value on the timing for the resolution of the dispute? Are both sides equally powerful (i.e., economically, politically, socially)? What are each side's strengths, weaknesses, and vulnerabilities?

Four, what are each party's best and worst legal outcome? What is the highest and lowest likely outcome each party can expect (10% chance)? What is the reasonably highest and lowest likely outcome each party can expect (15% chance)? What is the median likely outcome each party can expect (50% chance)? How much has each party invested in the case to date? What further investment must each party make before trial? What is the likely future cost in money, time, and expense for each side? What opportunities are presented right now? How will these opportunities likely change in the future?

Five, what alternatives would be better than the risks of each side's best and worst outcome's in court? Given the dispute's current risks and rewards, what would be a reasonable "Reservation Point" for each side (i.e., the value below which a Plaintiff will not accept in settlement and the value above which a Defendant will not offer in settlement)? Is there any "Zone of Potential Agreement" (ZOPA) in which there is an overlap of the Plaintiff's and Defendant's "Reservations Points." If not, are there other potential ways of viewing the conflict to bring the parties together (e.g., personal and emotional toll of dispute; severed relationships, availability of evidence and witnesses, credibility of witnesses and documents, risks and costs of going to trial, first of a series of cases, high profile visibility, trade secrets, financial conditions of parties, investment return, etc.)? Are these potential agreements better or worse than each party's risks in court? What is each side's Best Alternative to a Negotiated Agreement (BATNA)?

Six, how can both sides increase their chances of maximizing their respective interests? What can each side do to: (a) increase the scope of the negotiations (e.g., increase the size of the pie rather just fight over a finite sized pie?); (b) claim entitlement to greater value (e.g., justify an increased share of the pie?); (c) create greater value (e.g., persuade an opponent that the offered exchange is more valuable to the opponent than the opponent is currently valuing it); (d) increase leverage (e.g., persuade an opponent of a greater loss exposure without a deal than the opponent currently views the situation); (e) use time as leverage (e.g., payments over time rather than all at once); (f) use termination or continuation of relationships as leverage (e.g., recognizing the value of ending or maintaining business or family or friendship relations); (g) create contingencies (e.g., creating alternative paths depending upon how a future uncertainty is decided); (h) remove egos from the dispute (e.g., often positional haggling is driven by the egos of the parties -- are we "winning" or "losing" in the negotiations -- rather than the bargained for monetary amount or item; who should talk to whom to minimize this ego battle); and (i) invent mutually valuable options?

Seven, develop a negotiating strategy that incorporates your foregoing analysis. The foregoing is a variation on the interest-based approach of the Harvard Program on Negotiation (PON) -- "Getting to Yes: Negotiating Agreement Without Giving In" by Roger Fisher, William Ury, Bruch Patton (ed.). It seeks to produce an agreement that meets the legitimate interests of both sides in an efficient manner that is lasting (i.e., does not create a resentment that could weaken the parties' commitment to the agreement). The Harvard PON approach seeks to: (1) separate the people from the problem; (2) focus on interests, not positions; (3) invent options for mutual gain; and (4) uses objective criteria to negotiate the deal on a principled basis. In this approach, participants are problem-solvers rather than adversaries. They listen for mutual gain rather than threaten for one-sided gain. And they bargain based on objective criteria rather than individual whim.

Eight, pay attention. With this information, be vigilant and prepared for opportunities where the mutual gain of the parties can be explored, highlighted, and acted upon. Remember, a settlement requires the agreement of both parties, not just the hopes and desires of one. The opportunity may be in a lunch with an opponent at the outset of a case. Or at the close of deposition. Or walking out of a hearing. Or in a phone call or chance meeting. With preparation, the general contours of the opportunity and how to exploit it will be obvious. Without preparation, aggressive advocacy -- with all its uncompromising ego and over-confidence -- may obscure and diminish the availability of the opportunity for all time. Be prepared.