Having just attended the Advanced Mediation Conference hosted by the State Bar of California Labor and Employment Law Section, it occurred to me how intimidating a mediation can be for even sophisticated business operators. I wanted to share five concepts brought up at the conference that I would like all of my clients to understand about the mediation process:
1. The mediator’s role – making you uncomfortable (but in a good way).
As I wrote in a prior post, a mediator’s only role is to get the case settled. He or she is not there to be your friend, not to tell you what they feel the case is worth, or to protect your opponent’s position. Their role is to get a settlement. Put yourself in the mediator’s shoes, and you have two warring parties who hate each other and believe they will win if their case goes to trial. How, as a mediator, do you get the parties to move off their respective beliefs? You must attack both sides’ theory of the case by pointing out the weaknesses of each sides’ positions. So don’t take the attacks personally, or think that the mediator is only attacking your position. If the mediator is persuasive about how weak your case is, she is equally persuasive to other side. Follow the Navy SEALs’ saying “Get comfortable being uncomfortable.” Understand also, that the attacks are not personal, it is not about you as a person, but instead about the facts of the case and weaknesses of the case. Finally, remember that the more uncomfortable you are, the opposing party in the other room is likewise feeling the same way.
2. Understand when being cooperative will help you get a better deal.
A party involved in a mediation must understand that there are two parts to a mediation: (1) the process and (2) the content. The process is how you interact with the other party being negotiating against. Are you cordial? Do you make small talk? The content is the subject being negotiated, such as the dollar amounts. A party that is cooperative about the process and competitive about the content will do better overall in a mediation than compared to a party that is competitive on both the process and content. Think about how you interact with someone that is simply being a jerk to you on ever little issue, even issues that do not impact the subject being negotiated. When dealing with the hyper-competitive negotiator, your guard goes up and the negotiation turns more personal. This is a bad combination for attempting to reach a reasonable settlement.
3. If you make a last, best and final offer, make it your last best and final offer.
Parties’ statements made during a mediation must have credibility. If you make a “last, best and final offer” during a mediation, and the other side rejects the offer, but you continue to negotiate, you have lost credibility with the other party and the mediator. As a result, even if you continue to negotiate and truly reach your last, best and final offer, the other side (and the mediator) will not believe that is your final number and will continue to push you beyond this number. There are occasions to make a last, best and final offer, but if you qualify your offer as such, be ready to walk out of the mediation if the offer is rejected.
Ralph Williams, a mediator with ADR Services, explains bracketing as follows:
Negotiation “bracketing” is the process of making a conditional offer linked to an expected response from the other side. For example, plaintiff states, “I will demand $500,000 if the defendant offers $200,000.” Defendant responds by accepting the bracket or proposing a different bracket (Defendant will offer $100,000 if plaintiff demands $400,000) or offering an absolute number. Plaintiff then replies with one of the same three options. Using negotiation “bracketing,” the parties send clear signals about their expectations, save time and avoid the stress of the negotiating dance that starts with a $1 million demand and a $10,000 offer.
In addition, brackets are conditional offers. Therefore, unless the other side accepts the proposed bracket, the party making the offer is not committed to those numbers. This allows parties to potentially make larger moves without the fear of having those moves held against them later in the mediation or in the case.
The use of bracketing during negotiations can add another layer of complexity to the settlement negotiations. However, with advice from counsel about how to negotiate using brackets, they are an effective tool in resolving cases. Understanding the concept of bracketing before a mediation – even at a very basic level – will help save time during a mediation and allow you keep your focus on the negotiation.
5. Enter the mediation prepared with a bottom walk-away number, but also a number that represents a goal.
It is important to know what your last best and final number is prior to going into the mediation. Steve Pearl, a mediator with ADR Services (who presented at the conference today), explains:
Experienced negotiators will set not only the walkaway numbers beyond which they will not move, but also goals that are better than those walkaway numbers. Parties who set “shoot for” numbers as their reference points typically do better than those who only formulate walkaway numbers.
However, just like almost every negotiation “rule” there are drawbacks in setting a walk-away numbers. Pearl explains that sometimes parties may have to shift their reference points to resolve the case. So, parties should have clear numbers set going into the mediation, but must also have a mechanism to reevaluate these goals if the case will not settle within these predetermined numbers.