"Whether in business, government, or the family, people reach most decisions through negotiation. Even when they go to court, they almost always negotiate a settlement before trial."

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by: Mark E. Sullivan


"Whether in business, government, or the family, people reach most decisions through negotiation. Even when they go to court, they almost always negotiate a settlement before trial."
--Fisher and Ury, Getting to Yes (Boston: Houghton Mifflin Company 1981).

If the trial of a case is the pinnacle of the family lawyer's practice, then negotiating a settlement is the broad plain upon which most of the day's legal business occurs. Like trial, negotiating takes a full measure of the lawyer's skill, concentration, wit and patience. While trials and hearings may comprise five to ten percent of a lawyer's practice, negotiations are involved in virtually every case that he or she handles. Good negotiating skills are even required when dealing with clients! And while there are many courses and classes focusing on trial techniques, few programs and papers focus on the skills that lawyers need to command and the issues that continually arise in settlement negotiations. The purpose of this paper is to explain both these topics.

A. Know the Facts
The first requirement of a good negotiator is a thorough knowledge of all the facts. This means the bitter as well as the better, the pro's and cons, what your client says as well as what the opponent will say about your client -- whether it is true or not.

This fact-gathering begins at the initial interview, and it never really ends. Each office visit with your client should be dedicated toward gathering more and more useful information that can help to resolve the case.

When Mrs. Smith wants to unburden herself as to the extravagant spending habits of her husband, she needs not only a sympathetic ear to listen to her tale, but also an accurate record of what she says so that the useful portions of it may be brought forward in future negotiations. When she brings in a shoebox full of receipts and canceled checks, she needs this information analyzed, digested, and summarized if it has any bearing on her case. Does she lack information on a particular point? The early use of discovery -- document requests, interrogatories, and depositions -- can help to produce the missing information. Once the information is received, of course, it will still need to be analyzed, digested, and summarized in order to prove useful in resolving her case.
All too often, the family attorney is outflanked by his or her opponent because of insufficient factual knowledge. If you are negotiating Mrs. Smith's alimony case, for example, knowing her net income (and that of her husband), the regular monthly expenses of running the household (usually available from her financial affidavit), and "the gap" between her own income (if any) and her monthly personal living expenses would be essential in trying to explain to your opponent how much alimony she will need each month. When confronted with resistance by her husband's attorney, knowledge of their spending habits -- as evidenced by deposits into their bank account and checks written from it each month -- can be critical in corroborating the need for the requested level of support. Don't attempt to explain her needs and advocate her financial requirements until you understand them! Once you understand them, you can explain them and use them to persuade.

Most attorneys take detailed notes at each client conference. Rather than jotting down a summary of what the client says on each occasion or, perhaps, dictating to your secretary a synopsis of the meeting, use the computer as a note-taking tool. MS Word and WordPerfect both have an outlining function which allows for rapid transcription of notes and information on a wide variety of topics broken down into subheadings, much as this manuscript is. It should be relatively easy to prepare a simple template using an outline to identify major topics, which can be used throughout the progress of the case. An example of this is the client case outline found at ATCH 1 at the end of this manuscript. A sample trial outline is shown at ATCH 2.

B. Know Your Opponent

"Have you not learned great lessons from those who braced themselves against you?"

--Walt Whitman

Knowledge of your adversary is likewise essential for competent negotiation. If Janet Jones represents the defendant in your case, will she be interested in talking about a settlement? Is her style of lawyering one that can accept compromises? Perhaps she is likely to approach the legal conflict with a combat mentality -- "Take no hostages!"
Most lawyers are pragmatists and problem-solvers, seeking acceptable answers instead of perfect solutions in an imperfect world. Beware the opponent who is on a crusade. Some lawyers are bent on proving a principle, rather than resolving their clients' cases. Knowing which kind of adversary you face is critical to the method of negotiating you adopt.
Bill Richardson, formerly Secretary of the U.S. Department of Energy and ambassador to the United Nations, went to Cuba to negotiate a reduction in emigration fees for Cubans leaving for the U.S. and for release of a group a political prisoners. Castro, he told Parade Magazine, “knew everything about me. He knew why I had come, he knew how I had voted in Congress.” Richardson points out that he returned the favor: “He studied me as I had studied him. He was well-prepared.”
Richardson also points out the necessity of personal contact with your opponent:

You have to connect personally with the individual with whom you are negotiating, either through a religious connection, a personal connection, a vibration connection. You try to get into their minds and make them feel comfortable with you -- that you’re a person with trust and a person with respect.

With [Croatian President Franjo] Tudjman, I tied it to a personal connection we had -- a previous visit to Washington -- and contrasted how good the U.S. - Croatian relationship was then and how weak it was now. [With Fidel Castro] the Latino identification with family and respect and culture, which I underscored with the fact that I was also a minority in the U.S., gave me an extra connection.

The other adversary worth knowing is the opposing party in your case. What makes him or her tick? What is the other party's goal -- a quick settlement done as cheaply as possible? A trial that will potentially embarrass your client? An admission of guilt by your client? Or exoneration?
Soon after the initial interview you should talk to your client about the personal dynamics involved in the case, focusing on the other party's probable objectives. You should also sit down early with opposing counsel and try to map out this terrain. Ask what the other party is demanding. Then ask "Why?" After the extensive answer you expected to get, wait for a while and then ask "Why?" again. Try to get a clear understanding of what needs and demands are essential (as compared to "desirable") for the other side. Push, test, and probe to find out what needs are negotiable
and what are essential to the opposing party. In this way you can get a better idea of what settlement will work for your client, and what will merely be a waste of time. When Richardson went to North Korea as a mediator in 2002, he learned the necessity of listening to the other side.
I discovered early in my career that you learn which issues are really important to your adversary from the emotion associated with their presentation: In our case, the longest and most passionate interventions came when [North Korean] Ambassador Han described the indignity North Korea had suffered from being ignored by the Bush administration. Resumption of food aid to North Korea was hardly touched upon by my interlocutors, giving us a clear sense of their priorities.1

The negotiating style of the other side may be revealed by their initial demands as well. Frequently these will be inflated and extreme, proposed in the expectation that they will be rejected but affording “bargaining room” to work toward a compromise in the middle. Knowing this in advance may be the key to effective negotiating for your client. In 1996 Richardson negotiated the release of an American pilot whom the North Korean military had shot down. Reflecting on this, he points out

For my part, I believed that Pyongyang’s statements were fairly typical of its approach: taking an extreme position going into a negotiation in order to have more to give when it came to the table. It brought to mind my negotiations over the release of the American pilot – my interlocutors began by telling me that not only would he stay in prison, but the U.S. would have to pay for the ammunition used to shoot him down. Ultimately, of course, we secured his release.2

C. Negotiating Leverage

Knowledge of the other side means knowing who needs to settle the case and who doesn't. If neither party needs to settle the case, it will most likely go to trial Very often the personal or financial dynamics of the case, on the other hand, will dictate a need for resolution through negotiated settlement instead of an expensive contested hearing. This issue is often called, "Who's got the monkey?" Does Mr. Brown need to settle quickly so he can get remarried (to his "common-law secretary") as soon as he divorces your client? Does Mrs. Adams need to settle quickly because she is about out of money for her own support? Does Mr. Wilson need his case settled promptly for psychological reasons -- the pressure of discovery and settlement discussions is just too great?
Any of these may be important aspects to consider in the dynamic process of negotiation. Putting your finger on where the negotiating leverage is found is akin to taking the pulse of the entire case. If you can find out who needs to settle and why, you can almost certainly get the case settled!
D. Time Problems

When the pressure is on your side, do your best to reduce the impact on settlement negotiations. Be sure to make your client aware of the danger of settling a case when time or other pressures are against you. Don't be rushed! Do your best to put time and finances "on your side." Letting the other side pressure you most often leads to unsatisfactory settlements that are promptly regretted once they are signed. A rushed bargain is no bargain at all, and few people make good decisions under pressure.

A good example of how time and pressure can be brought to bear in negotiations is given by Herb Cohen in his book You Can Negotiate Anything. Mr. Cohen was sent to Japan to negotiate a certain business deal on terms favorable to his company. He was given a week to conduct and conclude the negotiations.

The first day was spent recovering from "jet lag." Each day after that was spent with his Japanese hosts visiting shrines, natural wonders and monuments. Sumptuous meals were prepared and consumed, but whenever the discussion came close to business topics, his hosts gently guided the talk in other directions. By the seventh day, Cohen was exhausted, lonesome for his family and completely frustrated. He hadn't been able to get his negotiating opponents to agree on one major item.

Finally, as he was on his way to the airport for the flight home, his hosts began to discuss in earnest the topics he had been assigned to negotiate. As he listened to them, by now sitting at a table in the airport lounge awaiting the call for his flight, he realized how well his opponents had analyzed the dynamics of negotiation and utilized his weaknesses. He had to return with a deal! He missed his family. His boss expected results, not an empty briefcase. His plane was going to leave in the next half hour. He had gotten nowhere with his hosts for the past week, but now they were finally beginning to sharpen their pencils and propose a few agreements -- mostly on their terms, but still talking about the issues that needed to be discussed. What should he do? Leave without an agreement and try to explain things to his boss? Work on a deal until his plane was ready to leave? Cancel his flight and stay?

Cohen's experience demonstrates vividly how time and other pressures can prey upon the unwitting negotiator. Forcing the other party to squander time that could otherwise be better spent on trial preparation can lead to a better settlement with an unprepared opposing counsel.

The same point is made in a story in the July 20, 1995 Wall Street Journal entitled "Once the Foot Is in the Door, Be Sure To Leave It Open":

The bargaining was hot and heavy.

On one side was Boeing Co., a very large airplane company. Boeing was buying software to help re-engineer the manufacturing process.

On the other side was Cimlinc Inc., a small software company. Hoping to go public, it was eager to land a contract before its fiscal year expired. The clock was ticking: The books were closing at midnight.

Then a cellular phone rang in the bargaining room. It was Cimlinc's president, a gruff former Marine officer calling from Chicago with a coded message for his negotiators.

"This is Nancy," he said.

A few hours later, Cimlinc had nailed down a $6.8 million contract and a vital long-term role in a highly visible Boeing project.

How did they bring it off? And who, by the way is Nancy?

The answers begin with the motivations of John West, one of the unknown early heroes of the Digital Age. After returning from Vietnam, Mr. West joined the machine-tool industry, where he was a pioneering user of microprocessors....

His company, Cimlinc, raised $24 million in venture capital over the years and rolled out many whiz-bang products.... Repeatedly Mr. West made plans to go public, only to retreat. "There was turmoil in the company," he says.

Last year, with the venture capitalists clamoring for their payback, Mr. West resolved to try yet again, pinning his hopes on the re-engineering movement.

Cimlinc had a software product that enabled factory workers to receive routing orders, blueprints, even video demonstrations from various systems on their individual computers - an electronic version of the greasy see-through envelope of paperwork that usually accompanies parts through a shop.

To make something big of the product, Mr. West hired an aggressive business manager, Richard Hahn. From the work in the software industry, Mr. Hahn was keenly aware of the hottest prospect around: Boeing's re-engineering project....

Mr. Hahn and his associates identified Boeing's key decision makers speculating on which departments were likely to champion the software and which might feel threatened by it. They fortified their allies with arguments, some derived from comments in Boeing's own publications....

Soon Cimlinc had won over the Boeing engineers, but that was only half the battle. At Boeing, professional procurement officers - people who negotiate for a living - are brought in to complete the deal.

Cimlinc made no secret of its eagerness to close by March 31, 1995, when its fiscal year would end. But Mr. West, the grizzled founder, warned his associates that Boeing would stall until the final day. "They're going to find out how hungry we are," he told them. Precisely as he had feared, the drama dragged on until March 31 itself.

That afternoon, Mr. Hahn was at the bargaining table in Seattle fervently trying to resolve the final issues. Then, unexpectedly, Boeing declared that it might buy only a few hundred thousand dollars' worth of Cimlinc software.

Mr. Hahn was crestfallen. He wanted to make Boeing a "strategic account" for the long term - but insisted it made sense to do so only for an order in the millions of dollars. And yet, wouldn't even a small order benefit Cimlinc's year-end report?

Mr. Hahn called Mr. West in Chicago, where Cimlinc's preliminary financials were due. Mr. West arranged to phone back once he knew how urgently Cimlinc needed an order. There was a chance that Boeing's negotiators could overhear the call in the quiet conference room. So Mr. West said that if Cimlinc could afford to quit the talks, he would identify himself as Nancy - as in Nancy Sinatra, who sang, "These boots are made for walkin'."

The numbers came in. Cimlinc could get by without closing a deal that day. Mr. Hahn and his team were soon getting up to go.

Suddenly, with the valuable software threatening to slip away, Boeing was back to a big number. Shortly before midnight, Boeing had come to terms on a $6.8 million sale, the equivalent of more than a third of Cimlinc's sales for the year.

Boeing swears the process was perfectly routine - a straight ahead negotiation devoid of any hidden agenda or bargaining trade-offs on its part. "We weren't playing any games," an official says.

Maybe not. But Cimlinc makes no apologies for leaving so little to chance. The moral of the story: Even the perfect product demands salesmanship - and when the bargaining gets tough, think of Nancy.

E. When a Party Won't Negotiate

"A wife may not have any incentive to negotiate when she retains exclusive occupancy of the marital residence, receives substantial support and does not work."
--Gary Skoloff, "The Art and Craft of Successful Divorce Negotiation"

Equally important is knowing when someone won't negotiate. If your opponent in an equitable distribution case, Mr. Green, has control over all of the family and business assets, why should he negotiate a settlement which will only divest him of some of these? If Mrs. Brown is receiving a hefty amount of temporary alimony, why should she have any incentive to negotiate a different settlement for final alimony?

Whenever a party is in control of the situation and has no incentive to shift positions, he (or she) is not a likely candidate for a negotiated settlement that involves compromise or change. When you know this, you can comfortably set the date for a trial -- this case won't be settled! And you can do so knowing that you haven't wasted anyone's money, since the chances are slim to nonexistent that the case will be resolved in a settlement, as opposed to a trial. While ordinarily a trial is more costly, in this case a settlement negotiating session would likely cost more because the other side would have no incentive to settle and would probably prolong the settlement negotiations indefinitely.

F. Money on the Table

"In a true zero-sum game, the size of the pie is fixed, and both parties value it equally. But there are few zero-sum games. Even when it comes to slicing pies, one party may be willing to take a smaller piece of apple pie today if he can be assured of getting a larger piece of chocolate pie next week."
--Carol B. Liebman, "A Theoretical Basis for Divorce Negotiation"

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