Impacting Negotiations: From Round Tables to Soft Chairs

Posted on July 6, 2010 by Timothy R. Hughes

Viet Nam signing peace accordsLaw and negotiation go hand in hand and understanding the psychology surrounding negotiation is critical to successfully representing clients.  I have long been fascinated by the wrangling of the parties over the shape of the table in discussions to negotiate the end of the Viet Nam war.  As stated eloquently in Time Magazine:

For ten weeks of often absurd haggling, the parties in Paris—the U.S., South Viet Nam, North Viet Nam and the National Liberation Front—have argued about whether the table at which to discuss a settlement of the Viet Nam war should be square, oblong, rectangular, oval or any number of imaginative mutations. Last week, after studying nearly two dozen designs, the negotiators at last agreed on the shape of the table: it will be round. A few days later, they sat down as a group for the first time to get on with the deadly serious business of seeking a peace settlement.

One person's "absurd haggling" is another's  insistence to be treated at the negotiation table as the equal of a chastened superpower perhaps.
 
Against this backdrop, I ran across a Discover Magazine's blog post discussing how what we touch impacts our judgment and decisions.  The post analyzed studies by  Joshua Ackerman of MIT detailing how the human sense of touch impacted their analysis and reaction to specific situations.  Subjects holding purposefully heavy objects during test interviews considered their interviewees, and themselves, as more weighty and serious than those with light clipboards.  Individuals touching sandpaper were primed to view others more harshly than those touching smooth materials. 
 
The soft and hard contrast was perhaps the most  interesting and important for purposes of negotiations. 

Ackerman also looked at the influence of an object’s hardness. He asked 49 volunteers to touch either a hard block of word or a soft blanket, under the pretence of examining objects to be used in a magic act. Afterwards, when they read an interaction between a boss and an employee, those who felt the wood thought the employee was stricter and more rigid than those who touched the blanket (but no less positive). It doesn’t have to be the hands that do the touching either – when he repeated the same task with 86 volunteers who sat in either a hard, wooden chair or a soft, cushioned one, he found the same results. “We primed participants by the seat of their pants,” he writes.

The chair experiment also gave Ackerman the opportunity to test the effect of hardness on decision-making. He asked his recruits to place two offers on a $16,500 car, the second following a straight refusal of the first by the dealer. While the volunteers offered the same average amount at first, those who sat on the softer seats offered far more on their second go than on their first. That’s consistent with the idea that hardness has connotations of rigidity and stability. People who feel hard sensations are less likely to shift in their decisions. Harder chairs made for harder hearts.

The implications of this study are significant (and I am sure my negotiation and mediation friends, such as Victoria Pynchon and Ron White will be very interested in this study as well).  Beyond the initial reactions, be very wary when your opponent puts your client and you in the cushy chairs at mediation and insists on sitting on the metal bench seating!

Hat tip to Andrew Sullivan's always interesting blog, The Daily Dish for this info from the post How What We Touch Changes How We Feel.
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To Arbitrate or Not To Arbitrate

Posted on May 10, 2010 by Timothy R. Hughes

Scales of justiceI regularly face the question of whether arbitration is "good or bad", "better than court", or best for a particular client.  I always give that most lawyerly of all answers: It depends.

Arbitration is presented as a means of streamlining disputes, cutting down expenses, and providing the parties with a more informed decision maker to boot.  I have seen arbitration work just like that.  I have also participated in more than one arbitration that seemingly was sidetracked by the arbitrators into examinations that neither counsel nor the parties believed was germane.  I have seen the process work in a streamlined fashion with cooperative document and information exchange.  I have also seen the same types of discovery sandbagging and withholding of information and documents that are way too prevalent

Anyone considering arbitration should understand that their dispute will almost certainly be permanently decided at the end of the arbitration.  The right of appeal and legal challenge is so limited as to be almost completely non-existent in most disputes.  In some states, this might be a huge change.  In Virginia this is less of a factor due it its limited appellate access in civil construction cases.

The question in my mind often comes down to types of disputes, potential for motions practice, and cost/benefit.  I tend to like arbitration in smaller, less complex matters where streamlined discovery makes sense.  Bigger cases with more issues translate to a far greater potential for the high-jacked "frolic and detour" arbitration that breaks down into multiple arbitration hearings.  Legally complex matters often present excellent contract arguments, legal defenses (such as statute of limitations), and evidentiary arguments.  Be prepared for such legal maneuvers to mean little in arbitration due to its nature.  For this reason, I often prefer the courtroom for more complex cases.

If you follow this pattern, make sure to avoid having three arbitrator panels hear small cases as that breaks the bank.  For budget reasons, you may also want to consider alternatives to AAA for arbitration as their filing fees have gotten extremely expensive, especially when the arbitrator's fees are added in as well.

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Contractually Mandated Mediation: Good or Bad?

Posted on November 9, 2009 by Timothy R. Hughes

Astronomical ClockMediation is often touted as a time and cost-saving method of dispute resolution in construction matters.  It is not without its critics.  Don Short recently posted a discussion,  "Why Bother with Mediation?".  Mr. Short's basic postion: "... mediation of a construction dispute is just an impediment to getting the matter resolved in a timely and cost efficient manner."  Mr. Short followed up in his piece "When Not to Use Mediation?" amplifying on the theme that time was money and that mediation clauses permitted a recalcitrant party to string the process out.

I have inserted pre-litigation and/or pre-arbitration mediation clauses into literally every single construction contract I draft.  The result has been overwhelmingly positive.  In my practice, I have seen very significant cases on very significant projects get resolved regularly at mediation with no lawsuit or arbitration demand filed.  The number of cases resolved compared to the number of useless exercise mediations like those described by Mr. Short is likely on a ratio of 20:1 or greater.  Even cases that do not settle initially often resolve soon thereafter based on the foundation established during mediation.  The cases that were going to be a waste of time to mediate had warning signs all over them and we gauged our approach and investment accordingly. 

Our good friend Victoria Pynchon had a slightly different view that being contractually required to mediate before the parties were ready would probably be another roadblock to eventual resolution. I agree that mediating before the parties are ready is a waste of time, money and resources and can be counter-productive.  I generally have been able to negotiate exchange of appropriate information prior to mediation to facilitate meaningful conversations.

I am mindful that it is somewhat counterintuitive to make a party mediate.  Utimately, mediation needs two parties that are open to discussion, risk evaluation and potential settlement talks.  Sometimes that cake needs to bake in the oven far longer before the parties are ready.  Generally, however, the mediation clause represents the parties agreeing that sitting down and talking to resolve issues is better than fighting in court or arbitration.  More often than not, it works.  Call me a cynic, but at times it feels like many lawyers only want to get to mediation when "their fee has fully matured".  By that time, much of the potential benefit of mediation has evaporated and the positions of the parties may have been hardened by the emotional and financial investment of litigation.  Getting lawyers and parties to mediation without such a clause often ends up taking far too long and involve ultimately wasted significant litigation expense. 

This viewpoint is admittedly anecdotal and developed over my years of practice and experience.  Do you see these clauses working to resolve cases efficiently or simply delaying the inevitable and costing time and money like Mr. Short?  Do you believe that placing the obligation rather than allowing the parties to mutually decide to mediate facilitates resolution or acts as an impediment?  Or do you think the quicker to the mediation table the better?

Image by Judepics

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