The five steps of mediation (and negotiation) - Plaintiff

www.plaintiffmagazine.comSEPTEMBER 2012The five steps of mediation(and negotiation)Mediation is a facilitated negotiation. You’ll do betteradhering to the five predictable stagesBY ALEXANDER POLSKYNegotiation is an art and a science.When applied to mediation, the sciencetells us that the process has distinctstages. Negotiators who adhere to thestages do, in fact, obtain better resultsthan those who allow any stage to bemanaged by the seat of the pants. (Cf:Alternative Dispute Resolution: TheAdvocate’s Perspective 2d ed., Brunet& Craver pgs 63-119; 205-211)But as much as negotiation is an artand a science, it is also a dance betweenparties. An attorney’s proper execution ofeach step, including those leading up tothe dance itself, is important for the entireprocess to go as smoothly as possible.These include the preliminary,preparation, information, negotiationand closing steps.Since mediation is a facilitated negotiation,success hinges on an attorneybeing well aware of each step and actingto maximize results through sensitivity toproper and full use of them.Preliminary stageThe first step in the process is thepreliminary stage, during which you’redeciding whether to mediate. Factors includetiming, the need for informal versusformal information gathering, theemotional or business needs of the clientrelative to resolution, how to suggest mediationto the other parties, the mediatorbest suited for the task and the time to beset aside to do it right.More and more cases are mediatingearly. There are compelling reasons forthis trend. Pre-litigation negotiation ofdisputes saves time, emotions, businessinterruption and, of couse, money. Whenthe early negotiation does not result in asettlement, it often sets the stage for theparties to agree to informal informationexchanges and a return to the table.When using a mediator for thisprocess, it is important to go to someonewho has an established track record as aneffective listener, facilitator and communicator.As counsel, you do not want toturn an early mediation into a discoverytool, unless the information is reciprocaland targeted toward resolution. Counselfor each side should have a discussionconcerning the goal of the early mediation.Is it settlement at that time, or is it astep in an abbreviated process?Preparation stageFollowing the preliminary stage, attorneysmust prepare themselves, theirclients and the mediator for the mediation.This is the preparation stage, andthe key to success at this step is identifyingthe interests of both parties.An interest is a specific need thatmust be satisfied. An action is an act,deed or item that meets the interest.For example, if an actor has a big egofueled by insecurity, recognize the need forvalidation as an interest during contractnegotiations and step up and give away theactions that are easy, such as dressingtrailer, name placement, and so forth.In a death case, recognizing the validationof the loss is an interest, and asimple acknowledgment of the loss is animportant action item.When preparing for a mediation,make a list of your client’s interests andset out action items that you can negotiateto meet those interests. Rank the interestsby priority to keep yourselffocused.Next, identify the interests of the opposingparty, and set out actions to meetthose interests.Sensitivity to interests and interestbasedconcessions often produce rewardsas the negotiation process unfolds. Thisapproach requires thorough preparationof your client. The client should be preparedfor the process through discussionsof interests, goals and objectives, anticipatedstyles of opposing counsel and themediator, and discussions relating to attireand desired conduct/demeanor of theclient.When you prepare yourself as counsel,you will want to determine whether toadopt a cooperative or competitive style,the best use of delivery choices, and timingof briefs and exhibits.Joint preparation in the form of apre-mediation conference call with themediator, yourself and others participatingin the negotiation is a smart practice.In this call, discuss the nature of the dispute,the emotions, the need and timingfor a joint session, and any real impedimentsto settlement.Early discussions with the mediatorare important because mediators tendto care about strange things, such aswhether the parties will be together for ajoint meeting, should the table be squareor round, who will be attending the mediation,and who should not be there.Mediators hate surprises. Our tool iscommunication and our currency is risk.The more information you can provide tous on those broad topics, the better.Copyright © 2012 by the author.For reprint permission, contact the publisher: www.plaintiffmagazine.com 1

www.plaintiffmagazine.comSEPTEMBER 2012When preparing the mediator,please, please do so early. Pick up thephone, send an e-mail, and supply a briefat least prior to the weekend before themediation. Your brief should be informativeand address your risks, as well asthose on the other side. Share real andachievable goals and objectives with themediator. Remember, the brief is a toolused to enhance the potential for settlement.Information stageWith the first two stages completed,the information stage represents theinitial contact with the other side at thenegotiation. This might be a joint session,or it might even be as simple as a quickhello in the hallway. Here, the introductionsare made and the actual dance betweenthe parties is about to begin.If you have a long relationship withcounsel, either one or many, do not highlightthis fact or become too informal. Ittends to cause concern on the part of theother parties at the table.When in any caucus or meeting, theuse of open-ended questions might leadto ratification of the interest-based decisionsmade at earlier stages of theprocess. The tone is set during thesemoments. Consider your words and actionscarefully. Do you want to set a cooperativetone, or a tension-filledcompetitive tone, right at the start? Yourinitial actions or your reactions to thosefrom the other side will cement a directionthat could be difficult to change.On the other hand, be professional,and ensure that the client does so as well.Demonstrate commitment to the client,case and mediation. Prepare exhibits;even simple exhibits demonstrate commitment.If the case is fact- and time-intensive,use a timeline, which is veryeffective, instead of a ten-page writtenoverview.Negotiation stageThe dance with the other side officiallybegins with the negotiation stage,even though you might have beenpreparing for this moment well in advance.There are three basic approachesto negotiations.The competitive bargainer is oftenreferred to as a “hard” bargainer or a“positional” bargainer. This negotiatorwants to “win” and often at all costs. Winningis defined in a unilateral sense andmay often come without full regard tothe costs. Arguing over “positions” endangersrelationships, increases costs inlitigation and often produces inferiorresults.The cooperative negotiator, sometimesthought of as “soft,” wants to getalong with everyone and produce an easyoutcome in what is often a difficult situation.This technique often succeeds, butfrequently leaves the cooperative negotiatorasking the question, “What did I leaveon the table?”Then there is interest-based negotiation.The Harvard Negotiation Projectdeserves credit for coining this concept.In actuality, smart negotiators have beendoing it throughout history. This processfocuses on basic interests, mutually satisfyingoptions and fair standards whereverpossible.In this process there are four keypoints: (1) separate the people from theproblem (2) focus on interests and notpositions (3) create a variety of possibilitiesbefore negotiation or deciding whatto do (4) focus on objective standards.A close cousin of interest-based bargainingis the concept of what I call riskbasedfacilitative negotiation. © Thistechnique, which I merged into my mediationpractice 15 years ago, focuses bothon interests and on risks. The risks, howeverare the risks secondary to the failureto achieve a negotiated outcome.The topic of every negotiation is different.The personalities vary while the issuesand interests are as numerous anddistinct as grains of sand in an hourglass.However, combining the principles of interest-basednegotiation with the conceptof risk is an effective tool to move theparties across the finish line of settlement.The negotiator wants to WIN. That’sright – WIN. The lawyer-negotiator isoften trained to focus on WIN in the contextof money. That is a monetized outcome.The lowest price for the project,the highest dollar value settlement – thelist goes on.Sometimes, the lawyer-negotiator ina business dispute will WIN from a monetizedpoint of view but LOSE for theclient in the form of excessive attorneyfees, substantial costs, outsized risks andin certain situations, negative publicity orthe loss of a lucrative, ongoing businessrelationship. The idea of winning-at-allcostsoften produces a net loss. Riskbasedfacilitation permits the potentialfor mutual gains by balancing each side’spotential WIN with risk or cost associatedwith the failure to achieve a negotiatedoutcome.The risk-based approach analyzesthe adverse verdict potential (AVP): Whathappens if the trier agrees with 100 percentof what the other side argues? Itthen considers the compromise verdictpotential (CVP): Assume the trier of factaccepts some aspects of each side’s case.It then considers the costs by consideringthe costs of litigation, plus the costs in regardto interests of the parties. Win orlose, the interests are charted to analyzethe various ways they are impacted bylitigation.This process yields a present settlementvalue (PSV): The risk of losing,measured by the potential of compromise,and balanced with consideration ofthe costs/interests of both sides, is thegoal of risk-based facilitative negotiation.The negotiator’s style might be distributive(offer followed by counter offer,etc.) or facilitative (mediator talks privatelyand facilitates movement of issues,terms and numbers until agreement isreached.)The back-and-forth of distributive negotiationis hard on the parties. Emotionalexperiences tend to feel as impersonal asnegotiating for a commodity.In a facilitative negotiation, the mediatordoes not deliver offers as much asCopyright © 2012 by the author.For reprint permission, contact the publisher: www.plaintiffmagazine.com 2

www.plaintiffmagazine.comSEPTEMBER 2012concepts, wrapping into the discussion aninterest-based analysis through the use ofopen-ended questions. In this way, theparties themselves can come to their conclusionsin an objective manner. It’s notwho is right or wrong, it’s what the jurysays, and how the process impacts one’slife or business. This is well used in emotionalcases. It is driven by issues, and canbe much easier and softer on theparties.Closing stageThe deal is done, the dance has almostcome to an end. Everyone is tired.Time to go home, right? WRONG! Notuntil the closing stage is complete andthe essential terms of the deal are reducedto a writing and signed by allparties or, if all parties are not present,all participants. This reduces confusionat best and might lead to an enforceableagreement depending on the rules of thejurisdiction. Even if not strictly enforceable,it is best to put pen to paper anddraft a memorandum of understanding.The takeawayCreate an interest chart for eachside. Identify actions that can be matchedto the interests. Examine the reason behindpositions being asserted, in terms ofthe interests identified. Ask “what andhow” questions to validate your assumptions.Invent and consider all possible optionsfor all sides and look for mutualgain. Consider mutual loss if a negotiatedoutcome is not produced.Doing so will help you best leveragethe five steps of negotiation to you andyour client’s advantage, helping to ensurethat your dance with the other side is assuccessful as possible.Alexander S. Polsky is amediator and arbitrator withJAMS and an adjunct professorof law at USC. Hehandles complex commercial,class action, employment,maritime and catastrophicPolsky injury cases at all JAMSCalifornia offices andnationwide. He may be reached throughJAMSADR.COM/POLSKY orAlexpolsky@polskymediation.com.Copyright © 2012 by the author.For reprint permission, contact the publisher: www.plaintiffmagazine.com 3