Get engaged !

These are tough economic times. What’s the effect on mediation practices? I was at a recent educational program and on a break spoke with a plaintiff’s attorney about how to settle claims in mediation with the economy in its difficult state. While there is no clear or easy answer, I suggest the following approach.

If you want to get your case settled, you need to get everyone involved genuinely interested. From the plaintiff’s counsel perspective, you need to fully engage both defense counsel and insurance professional in the settlement process. The prime mover in such engagement is making a "reasonable" settlement proposal. This works best when done before mediation so that defense counsel and insurance professional have time to review and prepare for mediation, i.e., set reserves, get authority, etc.

With respect to plaintiff’s initial proposal, don’t make it so high that defense counsel and insurance professional have no belief in potential settlement. If the proposal is out of this world high, then they will not be engaged in the process and are not likely to do any additional work to obtain greater authority than their own previous evaluation. On the other hand, a demand that defense counsel and insurance professional consider "reasonable," can go a long way towards creating a more conducive settlement atmosphere. Of course, any demand must build in some negotiating room, just consider how much room you really need!

The same concept holds true for the defense side of things in terms of making counter offers. If you make proposals that the other side perceives as a decent step, then they are likely to also take a decent step. And once folks are moving, then an opportunity is created. With no movement or very small increments, a negotiation or mediation can get bogged down. People can become frustrated and lose interest. And with interest lost, comes a lost opportunity.

So, get folks engaged. Get them believing that a settlement can be reached and you have set up your mediation for opportunity.

Super Bowl Party

Did you hear that President Obama had a Super Bowl party? And not just any party, but a bipartisan party. President Obama invited elected officials from both political parties. What a great idea to get folks together in a less pressured atmosphere, to make connections and build relationships. It certainly can't hurt and who knows, it might help down the road.

Does any of this sound familiar to you as mediator? Have you ever tried to get folks in a mediation to meet over a cup of coffee, lunch or a late afternoon snack? I have and find that when you get people in the same room who are in dispute, they can be tense, they revert to various "posturing" and "positioning" behaviors that are not always constructive. However, get together in the break room over coffee or that mid afternoon cookie and often the interaction is very different. This is particularly true with people who know each other (usually the attorneys) and such interactions, even for small moments, can provide useful information to you as mediator and create opportunities.

I bring muffins and sometimes fruit to my morning mediations and usually cookies in the afternoon for this very reason. I try to create personal interactions that are not specifically directed at resolving or settling the dispute. I create personal interactions to create connections between the mediation participants, and in so doing, it sometimes opens a door in the negotiation that had been closed.

So, next mediation - have a Super Bowl (Dispute) Party!

Calling President Carter

I took some time off from blogging and now with the New Year upon us let me get us going again! And with the inauguration recently behind us, I was reminded of a mediator technique shared by an experienced mediator.

She explained that as an impasse breaking tool she would ask former President Jimmy Carter to come into the room and work his mediator magic. Not the real resident Carter, but the imagined one. She would actually say to participants something like – “We are somewhat stuck and I have a mediator technique where we suppose that Jimmy Carter is here with us to help mediate. What would he do at this point?”

She solicits input from participants, adds her own ideas and then tries to take action along the lines of discussion. The discussion about what former President Carter would do allows her to tap into the process knowledge of the participants (that's also linked to the substance of the dispute) in an indirect manner. This can allow greater creativity in thinking and a willingness to share ideas that might not be shared if you ask "What should we do next?" Of course, sometimes asking what next is a great technique in and of itself. Finally, using an "indirect" approach lets the participants share their ideas without feeling “directed” by those in which they are in dispute.

With a new administration in town, perhaps we should call in President Obama?

Negotiation Capital

In these tough economic times let’s talk about “capital” – not true dollars, but the currency and capital you use in mediation. Think in terms of “negotiation capital.” I’ve coined this phrase to refer not specifically to the dollars that are exchanged in negotiation, but rather how easy or difficult are the steps in the negotiation. Are folks moving in very small steps early on or large steps? Is it taking a very long time between proposals such that one party is becoming impatient with the process? Has the negotiation taken so long that folks are running out of energy to do the really tough work at the end when a gap in the numbers remains? My sense is that for all of these instances, if it takes a long time for the negotiation to get to the end, then once at the end, there is little “capital” left to bridge whatever gap remains.

I routinely explain to folks at mediation of an injury claim (and most litigated claims) that there are two negotiations. The first, from the defendant (institutional) perspective is based on authority given, reserves set, and market value. From the claimant (individual), it is based on their goal for the negotiation, what they want, what their attorney tells them would be an appropriate settlement. When the respective parties get to these points, there usually remains a difference. I call it the “gap.” As you might imagine, if it only takes 4 steps to get to the gap as opposed to 10, then the participants will have more energy and generally more willingness to keep going and figure out how to bridge the gap.

I encourage folks on both sides to move in larger steps early so that the “pressure” to take a step that will be seen as significant is on the opposing side. Generally, the more one side moves, then the more likely they will also get a significant move from the other side. Of course, rarely do folks match moves; however, the main issue is whether the move is perceived as “good” by the receiving side. When I walk in to a caucus, present a proposal and folks say “that was a good step” then they generally try to do the same.

The point is that if you can get to the gap without spending all your negotiation capital, then you will be ready for the hard work ahead. You’ll be ready for the second negotiation, ready to bridge the gap and get the case settled.

In your next negotiation, consider moving in larger steps early and try to put yourself in the other sides shoes – How will they perceive your move? Remember, you can always slow down later if you want/have/need too. Save your negotiation capital for the second negotiation!

The Power of Getting Back Together

In most mediation of litigated cases, the parties and their attorneys (and us mediators) want to get to the private caucus quickly. These caucuses provide a relatively comfortable space to discuss and analyze the case. It’s where we ask attorneys about their BATNA and WATNA – what’s the best and worst that could happen if the case does not settle at mediation. And, if we are doing our job, we also connect with the individual party and learn more about their needs (as opposed to wants). We know that attorneys will not “honestly” evaluate their case in front of the other side, so we don’t ask in general session. Once this analysis by the participants (with the mediators’ facilitation) is complete we switch to a facilitative negotiation. My query to you – is there ever a time short of settlement when we should get folks back together? I believe the answer is a resounding “Yes” and let me demonstrate with a recent case.

The case was a denied workers’ compensation claim and after our general session we moved to caucus. In caucus, it became clear that the injured worker was very interested in a medical evaluation to find out what was wrong with his back. (His first proposal was for a medical evaluation which was declined by defendant.) Since he didn’t know, the uncertainty presented itself in a settlement demand that the defense found out of the ballpark. We still traded some numbers, but things were not moving to quickly and at some point, plaintiff’s counsel again raised the idea of medical care. The way counsel shared it suggested to me that we get back together or at least get the attorney’s and the claims professional together.

So, I asked plaintiff’s counsel if he would come back to the other room and share his idea that a medical evaluation would provide everyone with needed information, i.e., if the evaluation did not show a serious condition needing surgery, then the plaintiff would be better able to settle the case in a range likely acceptable to the defendant. Or, if a serious condition was found, then both sides would know the extent of potential medical care. I brought counsel together with the claims professional; plaintiff explained their idea in a cordial manner and then I split them up again. After some discussion, the defense agreed. We recessed the mediation to allow for a medical evaluation at defendant’s direction. Now, I still don’t know whether the case will eventually settle or not, but it now has a much better chance as compared to the chances last week.

With this recent experience under my belt, I encourage you to think of ways to get folks back together for a specific purpose in your mediation. As I explain in mediation trainings, when you get folks together there is risk and opportunity. As mediator we must set up for opportunity and manage the risk!

Be The Negotiation Coach !

As I’ve mentioned before, I teach a course “Mediation Theory & Practice” in the UNC Greensboro Masters program in Conflict Resolution, and during a recent mediation role play, I was reminded about our job as “negotiation coaches.” In the mediation, a proposal was framed as either a sum of money or an apology, but not both. The claimant had expressed strong interest in an apology. At this point, the claimant and counsel became focused on the form of the offer, the “either/or” aspect and the mediation slowed. The mediator was able to help move things forward; however, in our debrief, participants noted the challenge around the form of the proposal.

This is where we can play an important role as negotiation coach. We can and should help all participants work through proposals and remind folks that they don’t have to respond exactly in kind to any proposal. While the goal is certainly to get people talking “apples to apples” I believe it’s okay if it doesn’t start out that way. And we can help remind people that they can form their own proposals and don’t just have to respond or react to what has been presented. When people want to make a “different” form of proposal or offer I also encourage them to respond to the initial proposal. I ask them to do both as alternative proposals. My sense is that the more choices people develop, the greater the opportunity becomes to find a settlement range.

So, be the coach at mediation and you might even get a long term contract!

First Impressions

I attended a Memorial Service recently and one participant (let's call her Sally) shared a story about the deceased (let's call him Jim). Sally explained that she first met Jim at a dinner party. Sally was seated, Jim stopped at the chair next to her and then moved to the other side of the table. From then on Sally thought that Jim did not like her and, thus, she avoided contact with him. Sally never got to know Jim. After Jim passed away, Sally learned that Jim had a very bad back and that there were only a few chairs that were comfortable for him. Jim had moved to the other side of the table in search of a better chair. Not to get away from Sally.

This story confirms one aspect of forming first impressions. We use first impressions as a filter and if we believe that someone doesn't like us, then we behave accordingly. We avoid this person and, thus, reinforce the distance and never really get to know the person. And talk about quick. I heard an image consultant recently note that the Millennial generation form first impressions in a second, that Generation X gives folks 30 seconds and Baby Boomers an entire minute.

So, depending upon who you are working with as mediator, your time in which to make a first impression goes from micro quick to a long full minute. You get to "create" your first impression in many ways including how you dress, your facial expression and other body language, and by your tone of voice. If you are already seated in a conference room - do you get up and shake hands? I encourage you to use this time well and remember that the impression you form about another could just be about a chair!