Wednesday, September 29, 2010


Negotiation is art, not science. Those who are good at negotiating understand the psychology of the deal—the often emotional process that brings people to compromise. If one is to win at negotiations, one must understand triggers that cause people to compromise and the emotional baggage people bring to the negotiating table.

Negotiating with a lawyer over an ongoing legal dispute can be different than typical business-type negotiations. Some factors influencing a negotiation in a lawsuit that are not present in typical business negotiations are as follows:

1. The cost of attorneys’ fees can cause parties to perceive that their position is worth more than it really is worth;

2. The lost opportunity caused from a protracted litigation can increase the price of settlement;

3. Intangibles such as emotional fatigue from litigation, anger over perceived slights, and a desire for revenge; and

4. An attorney that riles his client to anger so he/she can generate more fees.

However, these influences only serve to highlight the need to employ psychology and strategy in the negotiating process.

I highly recommend that attorney and client work together on the negotiation process. Business clients who negotiate well are great allies in the negotiating process. Often times the client can provide helpful insight into the opponent’s finances, personality, and stomach for risk.

There are times when a party will not come to the negotiation table because that party feels empowered by having an attorney litigate on his/her behalf.  After all, in the early stages of the lawsuit, the attorney helps keep the client from dealing with difficult conversations and stressful court battles. In many ways, the attorney is the "big brother" protecting the client from ugliness.  Moreover, the opposing attorney may be provoking his/her client to continue the action.  Therefore, the opponent is often unwilling to come to the table.  

So, what does one do? Answer: Bring the ugliness to the opponent, but give the opponent a way to control his/her fate by settlement. This is the proverbial “carrot and a stick.” This strategy takes patience, money, and an appetite for risk.

                            The Stick

Have your attorney take the hard-line—setting and performing depositions—sending out discovery requests—sending out subpoenas—filing motions. Expect your attorney to aggressively push forward and expect to spend money. This will cause the opposing attorney to ask for more money from his client. Therefore, the opponent will feel financially pinched.

                            The Carrot

Once the opponent is fatigued from the dispute, have your attorney draft communication to send out under your signature (a letter, text, email, etc). The communication will be something similar to the following:

Dear John,

I’m willing to take this dispute as far as I need to. Frankly, I can’t afford to walk away from the money you owe me. You simply owe me too much money. You know that you breached the contract. You know that I will likely win at trial. That said, paying attorneys does not get either of us what we want. If you want to talk about ways to resolve this dispute, then let us get together. Otherwise, we will get this resolved in court.


Reasonable Man

If the opposing party is at all reasonable, he/she will consider the upcoming costs for litigation and balance that against a reasonable settlement. Staring down thousands in attorneys’ fees, being subjected to ugly depositions, and having to disclose thousands of pages of personal documents that could potentially be made public in court, has a tendency to make litigation less appealing. Moreover, if there is any goodwill left in the relationship, the party will want to settle so long as the settlement is “win-win.” In essence, you have opened the door and reasonable settlement talks can start.

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