Becoming a Five-Tool Lawyer, A Serial Tip Sheet for Improving Negotiation Skills, Part Four: Of Orange Slices and Counteroffers By Ron White, IVAMS mediator

This is Part Four in a series of articles focused on improving negotiation skills. The two most common bargaining techniques are interest-based and position-based bargaining. Interest-based bargaining enlist the parties in a problem-solving process in which they jointly identify issues and explore possible solutions. In Chapter 4 of “Getting to Yes” entitled “Invent Options for Mutual Gain,” authors Roger Fisher and William Ury provide the following example of how interest-based bargaining could be applied:

Yet all too often negotiators end up like the proverbial children who quarreled over an orange. After they finally agreed to divide the orange in half, the first child took one half, ate the fruit, and threw away the peel, while the other threw away the fruit and used the peel from the second half in baking a cake. All too often negotiators “leave money on the table”—they fail to reach agreement when they might have, or the agreement they do reach could have been better for each side. Too many negotiations end up with half an orange for each side instead of the whole fruit for one and the whole peel for the other. Why? 1

1 Fisher, Roger, William Ury, and Bruce Patton. 2006. Getting to Yes. 2nd ed. New York, NY: Penguin Putnam, 56-57.

In civil litigation, however, the parties rarely invoke interest-based bargaining. The cases are usually limited to the payment of money, and position-based bargaining is the negotiators’ most oft-used implement. Typically, the parties assert their respective positions early in the process and think only of their own aims and interests. It is an adversarial method of negotiating and pits the parties against one another. In most cases, the defendant has the orange and the parties negotiate, slice by slice—offer by counter-offer—until the case is settled or the parties opt for trial. Or maybe each party—defendant and plaintiff/cross-defendant—has an orange and both sides are focused on preserving their own orange while taking as much of the other side’s orange as possible.

With this reality in mind, how can parties create value that can be traded when the negotiation is based on position-based bargaining? First, it is important to recognize that negotiation is a form of communication. Skillful negotiators communicate through their offers and counteroffers. Therefore, careful listening is essential to successful negotiations. Without it, plaintiff’s high opening demand can be deemed unrealistic by the defendant and met with silence—no counteroffer. On the other hand, defendant’s counteroffer with a low number can be taken as a personal affront, resulting in distrust and anger. When this happens, one is likely to hear, “They’re negotiating in bad faith,” or, “We’re done. See you in court.”

Seasoned negotiators will look at the communication of offers and counteroffers as an opportunity to educate the other side with facts and reason. If an offer seems unreasonably high or low, instead of reacting with negativity, a party should respond with a request for more information: “We don’t understand the basis of your number; will you please explain it to us?” If a mediator is involved, he or she may be tasked with expressing the rationale for the offer to the other side. The explanation needs to be factually accurate and legally sound. The unspoken word will be this: your offer is too high; I’m here to negotiate in good faith; help me understand your position. Let’s get this done.

In the next and final article in this series on negotiation skills, I will provide a method to evaluate your case so you can create value that will become your barging chips in your negotiation. Value may be found in an attorney fee clause; in risk assessment; in evidentiary issues; in collectability; in insurance coverage limitations; in saving precious time and money. Value is found when the parties communicate the reasons that suggest the certainty of settlement is better than the unknowns of trial. Through this process, you will discover ways to slice the orange in the most fruitful manner.