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Don’t Rush the Negotiation Process

By Charles B. Craver

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I learn more about negotiating when I function as a mediator than I do when I negotiate as an advocate for others. Even though I employ bargaining skills when I mediate, I am a neutral observer who gets to watch others interact. One of the most basic things I have observed as a bargaining facilitator concerns the fact that negotiators must not rush the process. It takes time for individuals to explore the various issues involved – and to begin to lower their initial aspirations.

Several years ago, I was asked to mediate an employment dispute. At the initial session, I thought it was clear where the parties would likely conclude their interaction. I asked several questions designed to see if the parties would consider that result, but both dug in their heels and suggested that such terms would be wholly unacceptable. Although we had a time limit on the mediation period, the parties could mutually agree upon extensions of that time frame. They did so several times, and we continued to discuss possible solutions both in person and via the telephone. After eight months, the parties finally achieved a mutually agreeable settlement. They ended up exactly where I thought they would when we first met. I have had similar results with respect to other prolonged mediations.

When parties prepare for bargaining encounters, they exhibit an ego-centric bias through which they overestimate their own side’s strengths. As a result, they establish elevated aspirations they think they can achieve. During their preliminary communications with each other, the negotiators articulate opening positions that are a substantial distance apart. Plaintiffs demand significant sums, while defendants make modest offers. Corporate sellers demand millions of dollars, while prospective purchasers offer far less. In many cases, the parties look at the extreme distance between their opening positions and begin to think that no accord can be achieved.

Even when negotiators begin a substantial distance apart, they should not give up too quickly. They should recognize that proficient bargainers appreciate the impact of position anchoring. When individuals begin with modest offers, the opposing side becomes emboldened and thinks that they will do better than they originally imagined. As a result, they begin with less generous offers than they planned. On the other hand, when persons commence the process with more extreme positions favoring their own side, opposing parties begin to lower their sights and anticipate less beneficial outcomes. As a result of this anchoring phenomenon, most adept negotiators begin their interactions with positions favoring their own side.

Individuals who encounter more extreme opening positions from their adversaries should not become overly pessimistic. They should instead calmly and patiently explore the relevant factual, legal, and economic issues in a manner designed to induce both sides to reconsider their preliminary expectations. As the participants begin to realize how unrealistic their opening positions were, they should endeavor to go behind their stated positions and explore their underlying interests. Might a claimant accept future payments instead of a large lump sum payable immediately, or the promise of future medical care? Could a sincere apology by the defendant reduce the plaintiff’s monetary expectations? Might a business seller accept stock in the buyer’s corporation or the promise of future goods or services instead of straight cash? If the parties can look for integrative issues they value differently, they may begin to exchange the issues they value less than the opposing side for the terms they value more.

It is critical for negotiators to appreciate the fact that it takes time for parties to realize that they are unlikely to get everything they initially hoped to obtain – and to appreciate the fact that alternatives they did not originally contemplate might satisfy their true interests. If people rush the bargaining process, it is likely that one or both sides will think that no mutual accord is possible. Talks may quickly deteriorate, with the participants moving toward their non-settlement alternatives.

If negotiators can patiently continue their discussions – either alone or with the assistance of a skilled neutral – there is a good chance they will reconsider their initially elevated objectives and begin to consider less extreme terms that might be mutually acceptable. As they begin to move toward one another and the gap between them narrows, they experience bargaining success and become psychologically committed to a final agreement. They do not wish to see their efforts fail, and they become more accommodating with each other. They continue to move together until they finally achieve mutually acceptable terms. This is why fewer than two percent of civil law suits go to trial in federal courts, and fewer than five to ten percent of such suits go to trial in state courts. It also explains why most transactional bargainers reach agreements that are preferable to their non-settlement alternatives when they endeavor to structure business deals.

When negotiators are disappointed by the seemingly insurmountable distance between their stated opening positions, they should not give up. They should patiently keep the discussions going over several weeks or months, and, in rare cases, over several years. They should do this in a pleasant and professional manner. They must allow the process to develop in a deliberate manner designed to encourage both sides to lower their preliminary expectations and to contemplate options not initially considered. As they begin to move closer together, they greatly increase the likelihood they will achieve final agreements.

Charles B. Craver Photo
Charles B. Craver is the Freda Alverson Professor of Law at George Washington University. He is the author of Effective Legal Negotiation and Settlement(7th ed. 2012 LEXIS); Skills & Values: Legal Negotiating(2nd ed. 2012 LEXIS); and The Intelligent Negotiator (2002 Prima/Crown), and is the coauthor of Legal Negotiating (2007 Thomson/West) and Alternative Dispute Resolution: The Advocate’s Perspective (4th ed. 2011 LEXIS). He can be reached at [email protected]

Copyright © 2012 Charles B. Craver
Copyright ©   2012  The Negotiator Magazine
The Negotiator Magazine  (August, 2012)