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today.
Welcome to the audio edition of BHBA's Mediation Training.
In this episode, your host, Sidney Kanazawa of Alternative Resolution Centers, will guide
you through breaking impasse and bringing closure.
Let's dive in.
I'm Sid Kanazawa, and I'm going to share a few thoughts on impasse today.
First of all, I want to put in context what we're talking about.
We're talking about mediation where the only outcome that is possible is a voluntary agreement.
We're not talking about arbitration or trials, judge or jury trials, where an arbitrator
or a judge or a jury can make a decision for somebody else, can force an agreement.
Basically in the context of mediation, we're talking about a voluntary agreement, but the
voluntary agreement is not limited to the narrow question that is being presented to
the arbitrator or to the court.
It can be anything.
The parties can agree to apologize.
The parties can agree to have payments or retire.
The parties can agree to cross license.
The parties can agree to just about anything, even though that remedy is not available in
the context of an arbitration or a court or jury trial.
But sometimes when we are negotiating, we get stuck.
We can't get past a certain issue or we can't get past understanding each other.
And somehow we get stuck and we call this an impasse when we just don't agree at some
point in time.
Why does this happen?
There's a lot of reasons.
Sometimes it's because we're not ready.
We don't have enough information.
Or sometimes it's because we're not emotionally ready to decide.
Sometimes it's a lack of understanding, of not understanding what the other side is seeing,
what they're concerned about, what their interest is, what they're really worried about in terms
of the resolution of this case or this mediation.
Sometimes the parties have different visions of what's going to happen in the future.
And sometimes we have to work out ways in which we can come to an agreement about taking
into account these different types of perspectives about the future.
And so we have to be creative in thinking about how we take into account the different
perspectives about the future so that we can agree today and agree on better terms than
our expected futures.
Sometimes it's because we just simply distrust our opponents.
We don't trust their motivations.
We don't trust their intentions.
And we think that they're leading us down the path towards something that we don't want
to go towards.
Sometimes it's just plain ego that we want to win or we feel disrespected and we don't
want to agree because we're not being given the dignity we think we deserve.
And sometimes it's because of the consequences that we're worried about what our boss is
going to say, what our family is going to say, what our other relationships, how they
might be affected by the decisions that we make.
Sometimes it's because we're just looking at things from our perspective.
We expect everybody to see the world the way we see it.
We expect everybody to see the same thing and agree to the same perspective that we
have.
Sometimes it's because we're afraid.
We're fearful of making a mistake or being thought of as a fool or loser in agreeing to
a particular resolution.
Sometimes it's because we're afraid of being inconsistent with what we've announced as
our principles or sometimes it's because we're afraid that we're going to appear to be weak
or that we're going to encourage bad behavior or sometimes it's because we're afraid that
we may be not prepared enough for making a not well-wisened judgment about the situation.
In any of these situations, most of the time we get stuck because we're boxed into the
trial story.
We're boxed into that story about that narrow segment of questions that a judge or a jury
or an arbitrator is deciding, the cause of action.
Is it liability, no liability and just a dimmer switch as to how much?
That very narrow question is oftentimes why we get boxed in.
It's a binary choice.
Like I said at the very beginning, the voluntary agreement is not limited to the binary choices
at trial or in arbitration.
In fact, although we set things up as the plaintive versus defendant, and it's obvious
that this is why we think in these binary terms and we think about this as a contest
between us and them.
We think of it in terms of zero sum kinds of conclusions.
This story assumes that force and power is what is going to get us to an agreement.
That we talk about threats and twisting arms and using leverage.
We use language of war about fighting and attacking and shooting down and beating up
the other side.
We're low to talk about compromising or giving up or agreeing with the devil because it is
in this binary kind of concept, this trial story.
It's about winning.
It's about winning and not losing.
Normally the mediation is set just before trial because we want to get all the discovery
and do all the pretrial motions and get all the things that we can do before the trial
done so that we have maximum leverage to force an agreement.
But like I said at the very beginning, this is not about a forced agreement.
This is about a voluntary agreement.
Every party that comes to the mediation has a choice whether they want to agree or not
agree.
Whether they want to stay or leave.
It is only if they want to agree that we have an agreement.
It's a voluntary agreement.
And so we have to question whether this trial story, this traditional story of force and
power really makes sense when we're talking about mediation and coming to a voluntary
agreement.
We see it all over the world when Hamas attacks Israel but don't say, oh, okay, you're right.
We're going to have to give you whatever you want.
When Russia attacks Ukraine, Ukraine didn't say, okay, come right in.
You can take whatever you want.
When people attack, they have three responses.
The responding party can either freeze, they can flee, run away, or they can fight.
And almost everybody when they're in this situation where they're trying to get past
the other side for whatever reason and they are in a conflict where they have litigation
or some kind of a dispute, both of them are feeling powerless.
And in this powerless state when one side threatens the other, when one side tries to
use leverage over the other, the normal reaction of most people is to fight back.
And so the more we threaten, the more the other side fights back and more it goes back
and forth and we escalate the dispute rather than de-escalate the dispute.
Now some would say, well, World War II is a very good example of how we overwhelm the
enemy and we ultimately won and we brought peace through that win.
But what was the cost of achieving that win?
In World War II there's an estimate that there was something like 62 million deaths,
most from civilians.
And if you look at where those civilians were, the Allied civilians accounted for 82% of
the deaths, the side that won.
82% of the people that died in World War II were on the side that won that war.
And I know a lot of people would say, well, it ended with Germany and Italy and Japan
being our allies.
Some of our closest allies today.
But really the story of how Germany, Italy and Japan became our allies today and our
allies then, China and Russia are now our enemies.
The reason is not so much the overwhelming force that we applied to the Axis forces,
but rather it's the Marshall Plan.
It is that plan after the war where we helped to rebuild the economies of Germany and Italy
and Japan.
It is that kindness that reciprocated into these countries becoming our allies.
Again, we're talking about a voluntary agreement.
We're not talking about a forced agreement.
And so when we get stuck in this impasse, when we get stuck, oftentimes it's because
we're thinking in binary terms.
We're thinking that we have to win or lose on one particular issue.
And we're thinking only in terms of questions that a court or a jury or arbitrator has to
decide.
We forget that no matter what the situation is, there are many perspectives that people
bring to the problem.
We all have our own life experiences where we grew up, the kind of circumstances that
we grew up in, our particular beliefs and experiences as we're going along.
And as a result, we see the same thing from different perspectives.
This chair is an example.
Sometimes you can look at it in their four legs.
Sometimes you can look at it in their three legs.
Sometimes you can look at it in those two legs.
Sometimes you can look at it and there's no legs.
Our perspective may be very different, but when we try to reach an agreement, part of
the challenge is to understand that there is no one perspective.
We can't assume that everybody is going to see the same thing we see.
Mediation is about a voluntary agreement.
It's not about winning.
It's not about defeating the other side and making them, forcing them to see our perspective.
Now here's the optimistic part of it over.
Although we are talking about a conflict, a dispute, a situation where the parties do
not agree, ultimately, most of them agree.
We only try about 2 to 5% of the cases and 95 to 98% of the cases get settled out on
a court.
The green bar that you see on the screen, that's 2% of the black that you see.
5% is the green and the yellow is what you see on the screen.
The 95 to 98% of the cases is all the rest of the black on the screen.
Basically what this means is that 95 to 98% of the cases, we reach an agreement.
The good news is we normally will reach an agreement at some point in time.
There's only about 2% of the cases and some jurisdictions, it's as little as 0.5% of the
cases.
But overwhelmingly, we will eventually agree.
When we reach this voluntary agreement, is a situation not of us treating each other
as enemies, as opponents, that we're going to have to defeat and overwhelm and leverage
against, but rather it is two different forces that are coming together to become one team.
And we are agreeing on a path forward.
So the only question that is presented is when and how we're going to resolve the dispute.
That whether 95 to 98% of the cases we're going to settle and agree on, it's only question
of when and how.
So how do we transform opponents into teammates?
How do we bring people together?
Well, there's some people that have thought about this.
Robert Chaldini wrote a book called Influence.
And basically he was curious about this question, so how people voluntarily agree to buy certain
services and products from salespeople.
And so he signed up for all of the sales courses that he could find, and he followed
around the best salespersons to try to figure out what is it that they do to get customers
to buy a product or service.
And he came up with six principles as to how that happens.
And another professor in Southern California, William Cranall, he wrote a book called The
Rules of Influence, Winning When You're in the Minority.
And he looked at the problem from a different angle.
He was wondering, why is it that some ideas become majority ideas?
Every idea starts with one person.
But why do some minority ideas become majority ideas?
And why do other minority ideas simply die and never percolate up to become the majority
idea?
And so both of them looked at various aspects, and they actually agreed on several of the
principles as to what it takes to get somebody to agree, to voluntarily agree to either buy
a product or to adopt a new idea.
One of the most important things that they found was identification.
That people buy products from people that they like, people that they can feel that they
are in the same tribe with, people that they can trust that are just like them.
And so Robert Chaudini found that a lot of salespeople would go out and they would find
the things to talk about that would make them identify with their customer.
They went to the same school.
They're from the same town.
They have the same kind of interests and likes.
And basically, that identification allowed that person to feel that that salesperson
is not a stranger that's trying to sell me something, but somebody that I can trust.
It's part of my tribe that I can rely on to steer me straight in terms of whether to
buy this product or service or not.
William Crano looked at it from a different perspective, and he looked at it in terms
of what kind of person, what is the status of the person that has an idea that eventually
percolates up to become a majority idea.
And he concluded that one of the most important things is the person that has that idea has
to be looked upon by the majority group as one of us, not one of them, but one of us.
And so in a simple example, LeBron James of the Lakers went to an opposing coach and said,
you know, you should really run this play.
This is a play that we cannot defend against.
So you know, you should run this play.
The opposing coach would think, why should I listen to LeBron James?
He is a warrior on behalf of a different team.
Why is he telling me this?
And the coach would understandably be suspicious as to why the star of the opposing team is
telling him to run a particular play.
And so it is unlikely in that circumstance that the coach will adopt a suggestion of
LeBron James.
By contrast, if somebody who was on the Lakers, either as a player or as a coach, came over
to the other team and became an assistant coach.
And he says, you know, when I was with the Lakers, there was this one play that they
could be defending against or there was this one play that, you know, would be very effective
against the Lakers.
And he would tell the coach that because that person now is part of the opposing team, there
is a greater likelihood the coach will listen to him and adopt that particular play.
He's one of us.
And so one of the fundamental principles of how you get people to agree, to voluntarily
agree is that you have to figure out how to create a scenario where you're part of the
team.
You're one of us, not one of them.
Another principle that Chaldeany talked about that was very critical in terms of whether
a person would buy a particular product is this idea of reciprocality that oftentimes
people will give away something and their kindness and giving away encourages the other
people to repay and kind, to be kind in the same way.
And we see it in Settlement Conferences, you know, that when there's a $100,000 case and
somebody demands a million dollars, the other side reacts in the opposite direction where
they offer $5 or something of that nature.
Both of them understand the cases probably should settle in the $100,000 range, but the
extreme of one side would invite an extreme response on the other side.
We're reciprocal in this fashion.
We react in the way that we're treated.
And so it also applies to this idea of whether you're in my tribe or not in my tribe.
If I view you as a friend, I will treat you as a friend and we will reciprocate in that
fashion.
But if I view you as an enemy, I will treat you as an enemy.
If you view me as an enemy, I'll treat you as an enemy.
And we will reciprocate in that fashion and will not be persuaded.
The third thing that both of them, both William Carano and Chaldean talked about is this idea
of consistency, that if you can get people to agree with or to announce their position
publicly about something, it is very difficult to get them to change your mind.
In fact, it is much easier to get them to agree to bigger and bigger things once they
agree to something small.
So for example, Chaldean looked at people that go to a racetrack and he said, you know,
and people when they're about to bet on a horse, they think, you know, I'm not sure
if this horse is going to win and they're trying to bet which horse is going to bet
on.
But once they make the bet, immediately thereafter, they're very confident that this is the horse
that's going to win.
They're consistent with their bet.
Their belief system is transformed into being consistent with the bet.
Even though a few seconds earlier, they were uncertain about whether that horse would
win.
Chaldean also talks about a very interesting experiment involving ugly billboards.
And they went to two different neighborhoods.
And in one neighborhood, they went to each of these houses and they asked the homeowners
if they could put up this big billboard in their front lawn that said drive safe here.
And 80% of the homeowners in one neighborhood said no.
And so they went to another neighborhood that had the same kind of demographics, same kind
of layout, same kind of economic and social, economic and social is similar to the other
neighborhood.
And they asked the homeowners in that neighborhood if they could put up this big billboard in
their front yard.
And 80% of the people in the second neighborhood said yes.
And so the question is, how?
Why?
Did one neighborhood, 80% said no?
And the second neighborhood, 80% said yes.
And the secret was two weeks before they asked about putting up the billboard in the second
neighborhood.
They went to each one of these households and asked those homeowners to put up a small
sticker in their window that said the same thing as a billboard, drive safely.
And it was that agreement to put up those stickers, that commitment to this public safety message
that made them more inclined to permit them to put up this ugly billboard in their yard.
We are people who want to feel consistent with our announced beliefs and get out to vote
efforts.
People often call up potential voters and to encourage them to vote and to get them to
voluntarily commit themselves to voting.
They will ask the voter, you know, when are you going to vote?
What time are you going to vote?
How are you going to get there?
Who's going to watch the kids?
What route will you take to get there?
And the more detailed they are about how this person is going to vote, the more committed
that person feels and the more likelihood, likely, that they will follow through and
vote as indicated in that total call.
It is this public announcement of the position that makes people compelled to follow through
and be consistent.
This kind of automatic response to different types of situations and all that was talked
about and developed by Daniel Kenner.
In fact, he won a Nobel Prize for his work in looking at these types of automatic responses
that we have, this thinking fast that we have.
And he wrote a book, Thinking Fast and Slow.
He won a Nobel Prize in economics because there isn't a Nobel Prize in social psychology
or more like that.
But it's appropriate that it's in economics because the story underlying economics is
that we are rational beings, that we are maximizing our personal interests.
And what Daniel Kenner tried to show is that we are not as rational as we think we are.
A lot of our thinking is not necessarily rational.
And he showed how people are willing to bet if they have 80% chance of winning.
But they're less inclined to bet if they have a 20% chance of losing.
And so it's not pure rationality that they're acting upon.
It is how the story is told and their emotions, perceptions, fast thinking that dictates
how they respond to a particular situation.
In his Nobel Prize biography, he talks about a situation that he experienced as a young
child growing up in Nazi-occupied France.
It sort of illustrates how our thinking, we are assuming oftentimes what other people
are thinking and we may be completely wrong.
But it is our fast thinking that makes us jump to conclusions, jump to assumptions about
what the situation is being presented.
And it is that jumping to conclusions that often leads us astray.
Daniel Kenner grew up in Nazi-occupied France and he was about nine years old at the time
and he was playing with a friend.
And at that time, because Kenner was a Jew, he had to wear a symbol on his clothes in order
to show that he was a Jew.
And so he was playing with a friend who's not Jewish.
And it got a little late and he was past the curfew hour so he had to go home.
But he was worried that he would be stopped because he's a Jew and it's after the curfew
hour.
And so he took his sweater and he turned it inside out so that the symbol would be on
the inside rather than the outside and he started to walk on.
And as he was walking home, he saw a German officer approaching him in the opposite direction.
And as he got closer, he saw that the German officer was wearing a black uniform and he
was warned that you should avoid Nazi officers with black uniforms.
And so as he got closer, he got a little bit more worried.
And as he got closer still, he noticed that the Nazi officer was looking at him and as
he got closer, the Nazi officer waved to him to come to him.
And as he got closer to the officer, the Nazi officer came within arms length and grabbed
him and picked him up and lifted him in the air and he put him back down.
And then the Nazi officer reached into his coat, pulled out his wallet and took out
of his wallet a picture of his grandson and showed it to Daniel.
And he wanted to show that Daniel looks just like his grandson.
And now both the Nazi officer and Daniel Kanahab had completely different pictures in their
mind as to what was happening in that particular scenario.
And it is this fast thinking that often leads us astray and makes us stuck in negotiations
because we are assuming that we know what the other side is thinking.
We're assuming that we know what they want and we're not openly asking and trying to
figure out how we can solve each other's problems.
This idea of understanding the other side and also showing the other side that you can
identify with them and you can see their perspective is talked about in a book called Never Split
the Difference.
It's written by an FBI hostage negotiator, Chris Voss.
And he talks about how you get hostage takers to give up the hostages.
And the Never Split the Difference title is basically when you're negotiating to release
hostages, you can't say, you keep four, I'll give me four and we're good.
You try to get all of them.
And you try to get the hostage to cooperate and agree on a path for it without everybody
getting hurt in the process.
And so Chris Voss talks about how the FBI does this.
And he says that the secret weapon for the FBI is open-ended questions.
It is open-ended questions that allow the hostage taker to tell the negotiator what
they're thinking, not to ask directed questions.
Did you do this?
Or isn't it true that this is what you're trying to achieve or not even saying anything
and assuming that you understand what they're trying to achieve, but instead asking open-ended
questions to try to understand the perspective of the other side.
And Chris Voss says the ultimate goal is to get the hostage taker to say, that's right.
That you ask these questions and you test your understanding to the point where the
hostage taker says, that's right.
Not your right.
Your right means go away.
I don't want to talk to you anymore.
But that's right.
Means that you have shown that you have been able to see the world through the eyes of
the hostage taker.
Not to agree with it, but rather just simply to be able to see it so that we can work together
to try to solve that problem.
Aristotle several thousand years ago analyzes question of how do you persuade, how do we
get people to voluntarily agree to some type of action.
And he understood this or he described this process in three steps, ethos, pathos, and
logos.
Ethos is the credibility and reliability of the speaker.
Ethos is the emotional or moral justification for following the speaker's lead.
And logos is a logic for following the speaker's lead.
And basically what Aristotle said is that in order to persuade, the most important thing
is ethos, the credibility and believability of the speaker.
That if you cannot establish your credibility and believability, then the audience is not
going to listen to you.
And so just as Chris Voss asked open-ended questions to try to understand and connect
with the host taker and be credible and believable, that effectively did two things in Aristotle's
model.
One, it showed that the negotiator is sincerely trying to understand the perspective of the
other person.
And it also emotionally connected the pathos, emotionally connected the hostage taker to
the negotiator to the hostage taker, to show the hostage taker that I am trying to solve
your problem as well as mine.
It's a connection with the audience, the emotional connection with the audience.
Because Aristotle said that ethos and pathos is what persuades.
Pathos does not persuade.
Logic does not persuade.
Logic just fills in the brain.
Once you believe the speaker, once you feel the speaker is right, you will find the logic
to justify the actions that the speaker encourages.
Now here's the problem for us as lawyers.
When we go to law school, we learn to think like lawyers.
And what that means is we turn this model of persuasion, these three steps of persuasion
that Aristotle developed thousands of years ago.
And we turn it upside down.
We assume that logic is most important.
The one thing that does not persuade, we assume that passion shouldn't matter.
The one thing that Aristotle says you have to connect with in order to persuade people.
And we assume that all people are created equal.
And we discount the fact that we have to establish our personal credibility and believability
with the audience in order to get them to believe and to connect emotionally to follow
our lead.
Ultimately, this is about building trust.
It is about finding a way to get, whether it's a customer or whether it's the audience
to trust us, to believe in us, to follow our lead.
And this idea of developing trust was kind of expanded in a book called Positively Connected,
where Sam Adderley, who is a mediator, used David Meister's trust equation and kind of
changed a few of the concepts to make it more understandable to us as mediators.
I said trust is like a fraction equation.
On the top is credibility, reliability, and vulnerability.
The more credible we are, the more likely our audience is going to trust us.
The more reliable we are, the more likely our audience is going to trust us.
And the more vulnerable you are, the more likely the audience is going to trust you.
The vulnerability, the weakness, the authenticity of yourself is actually something that invites
people to trust you.
On the bottom of this equation is self-orientation.
And the more we are self-orienting, the more we are interested in ourselves, the more we
are interested in what are we going to get out of this deal.
The more we are interested in protecting ourselves, the less we trust you.
So the more selfless we are, the more vulnerable you are, the more we can gain the trust of
our audience, the more that we can break through these impasses and work towards a voluntary
agreement.
So how do we go from being opponents to being teammates?
How do we get to this point of reaching a voluntary agreement?
One of the key ways in which we can become teammates as opposed to opponents is that
we change the story.
We change the story from being on opposite sides of the table to being on the same side
of the table by us collaborating and working together as we on the same side of the table
and we throw our clients and our problems and issues on the other side of the table
and we work together to solve the problems on the other side of the table.
That's how we get past and in-pass.
The problem is that we have in the United States a canceled culture.
We are very good at separating people out and saying that some people are not one of
us, not part of our tribe.
And here is an example where in terms of the native countries, we incarcerate more people
per capita than anybody else among the native countries.
In fact, we incarcerate people more than almost any country in the world.
We're very good at dividing our people up and saying you're not part of our tribe.
Even with respect to the government, back in 64, 77% of the people thought that the
federal government did the right thing just about all the time.
And today, it's only about 16% of the people that believe in the government that we consider
ourselves as one, as all together.
And it's the same with respect to lawyers that the public doesn't trust us either.
That only about 16% of the public thinks lawyers have high or very high honesty and ethics.
By contrast, the nurses, every single year that Gallup runs this poll, they come out
in the 8% range.
They're at the top of the chart every single year.
And it goes back to that equation, that trust equation, that the more selfish we are perceived
to be, the more self-interested we're perceived to be, the less people trust us.
The more selfless we appear, the more people trust us.
And if you look at this scale, it kind of follows that pattern of people or professions
that we consider to be more selfless are at the higher end of the scale.
And the people that we conceive as being more selfish are on the lower ends of the scale.
But it wasn't always like this.
Back in 1952, when Nixon was on the vice president show, was a vice president, vice president
candidate on the Eisenhower ticket, there was a slush fund issue that came up, a controversy
regarding his use of campaign funds for personal purposes.
And there was a lot of talk about him being taken off this presidential ticket and being
replaced by someone else.
And so Nixon went on television and delivered what is called the checker's speech.
Checkers was his dog.
He talked about his dog.
He talked about his wife's coat and a bunch of things.
So probably one of the more interesting things about that speech is he decided to give St.
Dunn-Quarcher, reviewing the receipts and approving of those receipts that back then
lawyers were considered not selfish, but selfless in promoting the rule of law as opposed to
protecting their particular clients.
In the McCarthy hearings.
The hearings were stopped when a partner, a Boston partner, Joseph Welch, defended
an associate in his office and gave that famous line, Senator, at long last, have you left
no sense of decency?
And that stopped the McCarthy hearings.
And this was a lawyer defending another lawyer.
In the Supreme Court, the Supreme Court at that time was nine white men.
And yet these nine white men unanimously issued the Brown versus Board of Education decision
and thereby revolutionized and changed the entire history of our law at that point in
time.
The reason that lawyers had such prominence back then and not so much today was the story
we told about ourselves was different.
What, who we thought we were and how we conveyed that to the rest of the public was different
than it is today.
In the original canons of professional ethics that was issued in 1909 and existed until
1969, the preamble to that professional canons is entirely on this screen.
It was just as one paragraph.
And it emphasized our role of giving the public absolute confidence in the integrity and impartiality
of the administration of justice.
In 1969, the new preamble for the ABA model rules continued to emphasize the rule of law
and respect for the dignity of the individual.
And again, it was this idea that we were there to promote a free and democratic society,
help things beyond ourselves, selflessly promoting this larger purpose.
But in 1983, our story changed.
And the emphasis became on zealously representing our client, of being zealous advocates.
And we even went so far as to say that if two sides are represented by zealous advocates,
we can assume that justice will be done.
We have no obligation to make sure that justice is done.
We can assume justice is done if two sides are represented by zealous advocates.
And we became a different kind of attorney, not one that is promoting this rule of law
and fairness to everybody, but one who is representing clients.
And so back in 1909, the emphasis was on integrity and impartiality.
Today the emphasis is on clients.
And the word client appears in the preamble 17 times, the word zealous appears three times.
And those words never appeared in the prior versions of the preamble of our ABA model
rules.
This increase in defending a client looks a lot more selfish than selfless.
So how do we, in light of all this, how do we transform from being zealous advocates
into being teammates and being on the same side of the table?
Well, again, the goal is a voluntary agreement.
And the key to getting a voluntary agreement is this one word, we, that if we think of
our objective being how do we reach an agreement, we are more likely to be able to overcome
any type of impasse or being stuck in the agreement because we're not thinking solely
about ourselves or our clients and what is good for us and our clients.
How do we get there?
How do we show that we are interested in we?
How do we show that we are interested in solving all of our problems so that we can voluntarily
agree?
One of the most important things that we have to do to be able to get past these impasses
is we need to be curious.
Need to ask open-ended questions so that we can understand the perspective of the other
parties that are involved.
Classic example is a mother who has two children that are fighting over a lemon.
And she decides to cut the lemon in half and give half to each of the children.
And both of them are unhappy.
And she does that when she cuts the lemon in half and gives it to both children.
She is not being curious.
She is not wondering what is each child going to be doing with this lemon.
What is the, why are they fighting about this lemon?
And her lack of curiosity means that she is relying on her own life experiences, their
own life experiences, her own perspective, her own view of that chair to decide what
is the right thing to do in this particular circle of sets to cut the lemon in half and
give half to each child.
Had she asked open-ended questions, she might have found out that one child wants the lemon
for the zest to make lemon rang pie.
The other child wants the lemon for the rind to make lemonade.
And so had she been curious enough to ask what each child was going to do with this
lemon, she might have been able to satisfy both of them 100% by just being curious.
So one of the keys to getting to the same side of the table and working together to
collaborate to solve the problems of our clients is to ask open-ended questions.
Who, what, when, where, how?
Tell me more.
What do we get here?
Where do we need to go?
How do we get there?
And there's a great book about this written by Alexander Carter, who is a Columbia Law
professor, but she was a mediator first and then became a litigator.
And so she had this appreciation about how to get people together.
You have to show them that you are listening to their particular interests and identifying
with them.
She has in your book 10 questions, five questions that you ask yourself and five questions that
you ask the other side.
But it's 10 questions for any negotiation.
And it is this basic concept of trying to understand the other side.
The one question that is not included is why.
Not all of why is exactly what we want to know.
Why are we having this dispute?
Why are you insisting on a particular position?
Why does this solution not work?
We want to know the answer to why, but the problem with asking why is it goes back to
that consistency principle.
The asking why forces a party to announce publicly a position, a line in the sand, as to why
they are taking a particular posture in the negotiations.
And once they announce publicly that posture, that position, it becomes very hard for them
to back down from that position.
And so that's the one question that we don't want to ask because of this consistency.
I'd like to demonstrate to you how powerful open-ended questions can be.
About a few years ago, I was in charge of the largest oil spill on the Port of Los Angeles.
I represented a foreign shipper who was refueling their ship, and they had an overflow.
And it contaminated seven miles of shoreline, and there was oil all over the harbor.
And the harbor had to be closed all of a sudden.
And it was like COVID-19, where all of a sudden the harbor was shut.
Nobody could go in or out.
And nobody knew how long it was going to take before we could clean things up and open up
the harbor again.
In order to process the 2,000 claims that came about as a result of that oil spill, we put
together a claims office and tried to figure out a process for resolving all the claims.
About two days after the spill, we had a meeting with all the potential claimants, and we tried
to explain how we're going to process all of their claims.
I had hired a claims manager, and he got up on the podium and tried to explain what the
process is going to be and how we're going to process all of the claims.
He got shouted down.
Everybody thought that he was yelling at him and saying, you know, saying our clients were
stupid and they shouldn't have had this spill, and they messed everything up, and they shut
down the harbor and they just kept yelling at him and not listening to his explanation
to how we're going to process the claims.
So I got up to the podium, and the next person that yelled at me, I asked them, what do you
think we should do that we're not doing already?
And that person said something about communication.
And one of my guys was standing next to a big whiteboard that we were using to map out
how we're going to clean up the harbor, and he wrote down what that person said.
The next person that yelled at me, the same thing.
I asked them, what do you think we should be doing now that we're not doing already?
And we wrote down what that person said.
And each person that yelled at me, I asked the same question and pretty soon he filled
up the entire board.
And then this guy in the back of the crowd got up and he said, I don't give a damn about
any of this.
Where's my money?
And that this lady in the front row, shut up, turned to the back of the crowd and said,
sit down and shut up.
These guys are trying to help.
And I was completely surprised because this group that was in the front row, including
this woman, were organizing to bring a mass action against my client.
Before the meeting started, they were milling around, getting contact information from everybody
to bring a mass action against my client.
But the act of asking the open-ended questions, and it's not that I knew what to do at the
time.
I'm looking back.
And now that I'm a mediator, I'm looking back and trying to figure out what happened
back then because at the time I didn't know what happened.
But the act of asking an open-ended question not only helped to try to figure out what
the audience was thinking, but it invited the audience to be a collaborator.
We didn't agree with everything that people were saying, but we wrote down everything
that they said.
And so they invited them to collaborate with us, to be on the same side of the table, to
solve this particular problem.
And it was amazing because after we had this discussion, that group of people that were
organizing against us became our leisons with a lot of the claimants.
And we were able to settle 600 of the 2,000 claims within two weeks of this film.
And settle all 2,000 within three months of this film.
And when I look back on it now, I now realize that that open-ended questions that I accidentally
asked had a powerful effect in getting us past this impasse, getting us past this obstacle
of being on opposite sides and becoming collaborators on the same side of the table.
I find that in the pandemic, one of the greatest things that has happened is that we have these
online platforms.
And on the online platforms, we get to see people's background, whether it's virtual
or the background that they have in their house or office or wherever it is.
And we see a lot of things in the background that we would not see if they were in a conference
room.
And sometimes we see kids and pets and people walking by that we would not see if we were
in a conference room.
And those backgrounds give us an opportunity to conduct some small talk.
And that small talk gives us an opportunity to engage, ask open-ended questions that have
nothing to do with the dispute, but allows us to find ways in which we can empathize
and identify with all the people that are involved.
Not necessarily to agree on anything, but rather to show that we are not so selfish or more
selfless to make us all a little more vulnerable and to basically try to get everybody on the
same side of the table.
Part of the agreements too, the way in which to get past these impasses, is that we have
to expand the possibilities.
We can't think only in terms of what's going to happen to trial and what the amounts are.
And we can't think only in terms of money.
We have to expand what the possibilities are and the kinds of things that we talk about.
We have to expand the story that we're going to tell in order to get people to agree to
a resolution and not be stuck in the binary trial story.
In essence, in order to get past this impasse, this being stuck, we have to kind of think
of the larger story.
How do we get us all on the same page so we can walk together out of this mediation with
a story?
It doesn't have to be the same story, but with a story that each of us can tell ourselves
that makes us want to agree.
We have to change perspectives and we have to think of the problem as being a we problem,
not a me or them or us or them problem.
Let me give you a couple of examples of how this happens.
How we can transform a situation that is focused on me to a situation where we can talk about
we.
You know, the Obergefell versus Hodges case is a very interesting example.
It's the same sex marriage case.
Back in 2000, there was a proposition in the California ballot that said that they wanted
to amend the constitution, the California constitution, to say that marriage is only
between a man and a woman.
That proposition passed by over 60% of the vote.
It was overwhelmingly popular amendment to change our California constitution to ban
same sex marriage essentially and to say that marriage is only between a man and a woman.
Some 13 years later, polling indicated that we were in exactly the opposite position.
That 60% or more than 60% of people supported same sex marriage as opposed to those that
opposed.
What happened in that intro?
One of the main things that happened is William Grace was the most popular sitcom on television.
Back then, we didn't have all separate streaming channels or anything like that.
We generally had a few channels and we're all watching the same programs.
William Grace was the most popular sitcom during this period of time.
It wasn't popular with just a LGBTQ segment of the population.
It was popular with everybody.
Although the show featured LGBTQ characters, what the storyline told us was that these
LGBTQ characters are more like us than different.
They have the same problems, they have the same issues.
The identification caused others to come out and LNGPGeneres came out and Vice President
Cheney's daughter came out.
Basically, we started to realize that there's a lot more LGBTQ people around us than we
imagined and it normalized the LGBTQ community in our society.
They stopped being in other and became more of us.
Basically, the messaging by the LGBTQ community also changed.
That rather than saying that back in 2000, the messaging was, we are different and we
have a right to be different.
The messaging in the 2013 period was, we're just like you.
We have families just like you.
We have kids just like you.
We are just like you.
That identification as being just like everybody else is what causes change in the perspective
about same-sex marriage.
How do we go from us and versus them to we?
We have to look beyond the game.
Here's another story that exemplifies this idea of looking beyond the narrow perspective
of the often-on switch of trial or arbitration.
Sarah Tuchowski was in a championship college softball game.
She is a diminutive woman and she had never hit a home run in her life.
But she got up to the plate and this is a championship game.
She got up to the plate and she hit the ball out of the park.
She was so excited that she ran to the first base and rounded the corner and started going
to second base.
The first base coach said, hey, Sarah, you got to touch the base.
She turned back to go to first base and something popped and she fell to the ground and she
couldn't get up.
She tried crawling to the base and she finally touched the base but she couldn't stand up.
One of her teammates asked if they could pick her up and take her on bases and the Empire
said, no, it will be a single if you touch her.
Mary Hopen was the first baseman on the opposite team.
She asked the Empire, what happens if I touch her?
He looked to the book and said, I don't have any problem with you touching her.
Mary called her right fielder, Liz Wallace, and Liz and Mary picked up Sarah and touched
her base, touched her foot on second base, on third base, and at home.
As a result of this home run, Mallory and Liz lost this championship game.
But the reason that they did this was Mallory was a home run champion and she appreciated
the idea of having home runs and didn't think it was right for Sarah to have hit the ball
out of the park and for it to be counted as a single.
So she fought beyond the game and figured out a way to give Sarah this home run.
This was back in 2008 and I'm still talking about it today.
It is looking beyond the limited opportunities of the court.
The court can't decide that you should pay overtime, the court can't decide that they
should be cross licensing, the court can't decide whether perhaps a business deal is
coming up down the line so maybe we should give the other side an opportunity to invest
in that business deal.
Court can't decide that one party should apologize to your party.
A limited role is an off-and-off switch with a dimmer, but the parties can agree to anything
and that's the opportunity.
You have to think beyond the game and think beyond the court's questions.
Let me give you an example of this.
A few years ago I was caught out to a factory where an employee died in a sandside.
They got sucked on the sandside and he died for all the wrong reasons.
There was no safety harness, there was no radio, there was no watchman, there was no information
regarding a person that was trying to clean out the sandside and somebody turned it on.
That's how he drowned in the sandside.
I got there the morning after this accident occurred and the district attorneys, investigators
were there and the OSHA investigators were there.
They were all trying to figure out what happened and planning to bring felony charges against
individuals and the company and OSHA charges as well.
While I was there, the shop steward was coming out of a meeting with the investigators and
I stopped him and I asked him, what do you think we should be doing when this happened?
It's kind of a question I kept asking, I guess, and I didn't realize the impact that
we have.
He said that a lot of people are really hurting and they're concerned about working at this
Petitor Factory because of the safety issues.
Listening to that, we got the management of the company to basically bring in some mental
health professionals to talk to all the employees.
We went to the family's house and sat with them and took care of the criminal expenses.
We brought in a safety expert to look at all the safety issues and change everything in
the factory so that it would be a safer place to work.
Then I went to the district attorney and I went to OSHA to see if we could resolve the
matters with them.
They said, well, we haven't even brought charges yet.
We don't even know what we're going to charge yet.
I said, it doesn't matter, the people are hurting and we really want to get this resolved
and try to figure out how we can move forward.
Both the OSHA representatives as well as the attorney thought this was premature.
I heard from them enough to understand that they were really sincere in terms of wanting
to create better working conditions and wanting to take care of employees.
I told them that basically we're going to give them everything that we have in terms
of all the documents and everything that happened before this particular incident.
We're committed to becoming a good citizen from this point forward.
We can't change the past.
What happened happened.
But we're going to turn over new leaf and we're going to be a good citizen from this
day forward.
I told them that if you got to treat good guys that are willing to cooperate before
you've conducted any discovery before you've brought charges, you've got to treat good
guys better than bad guys that are going to be withholding documents and not giving you
information.
Otherwise, there's no point in being a good guy.
That story of treating good guys better than bad guys was the basis for both the district
attorney and OSHA to rethink how they wanted to treat this particular company.
Although the company had done everything wrong, the reframing of the story to expose their
vulnerability and to increase their selflessness allowed the district attorney and the OSHA
people to trust us a little bit more.
It also allowed the shop steward to trust us a little bit more.
As a result, when we went to the district attorney and to the OSHA to try to resolve the dispute,
the shop steward came with us and we all worked together to try to resolve this claim.
As a result, the charges were filed and dismissed the same day because we already worked out
all the details of the criminal charges as well as the OSHA charges.
But it is this effort to increase our vulnerability, decrease our self-orientation so that we're
more selfless that allowed us to change the story and get us on the same side of the table
to try to resolve the problems on the other side.
An example of this effort to understand the other side and to think not so much about
our own interests but to understand the other side's problem is Jerry Bus.
Jerry Bus owned the Lakers from 1979 to 2013.
During that period of time, he went to the finals.
The Lakers went to the finals 16 times.
They won the finals 10 times.
You wonder, how did he do that?
How did he take these Lakers and take them to the finals so often and to win so many
championships?
Franchises are happy if they win one championship, but he won 10 during the time that he owned
the Lakers.
At his funeral, his business partner talked about how Jerry Bus did business and it really
exemplified this concept of solving other people's problems.
Looking at the problem not just from your own perspective but trying to see the problem
from the other perspectives.
His business partner told the funeral audience that Jerry Bus, when he did business, he would
look at the deal from all sides.
If he thought it was fair to all sides, he would do the deal.
If he didn't think it was fair to all sides, he wouldn't do the deal.
One time, he agreed to do a deal, but after the fact, he thought it was unfair to one
of the parties.
He threw in a couple of players just to make it fair.
Think about how you would feel negotiating with Jerry Bus as opposed to another owner
that might want to take everything for themselves and try to take as much as they can off the
table for themselves and give as little as possible in the negotiations.
How would you feel about protecting yourself and opening up and trying to cooperate and
work together and work on the same other table to solve problems if you were dealing with
somebody like Jerry Bus as opposed to somebody who won't take everything for themselves?
What's interesting about Jerry Bus is that he started out as a USC professor.
He used this way of working from the time that he started buying small apartment buildings,
fixing them up with his friends and selling them.
They did this and they got bigger and bigger apartment buildings as they were going along.
By the time he bought the Lakers, he owned the Chrysler Building in New York and traded
the Chrysler Building in New York for the Lakers.
This idea of looking at the problem from the other side is how we can start to get on the
same side to get past the impasses.
Talk about small talking.
Again, here's an example of how that works.
Chris Bus says that when he talks to the hostage takers, he wants them to say, that's right.
That to affirm that he can see their perspective and he can identify with them and now they
can hear him and now they can collaborate and work together to try to solve the hostage
taking problem.
One of the greatest examples of this small talk and how important it is in terms of resolving
disputes and getting past these situations where we're stuck is Nelson Mandela.
Nelson Mandela was imprisoned by the apartheid, Afrikaans government for 27 years of hard
labor.
He had every reason to hate, he had every reason to be resentful, he had every reason
to not want to cooperate and to continue to try to seek revenge against the South African
Afrikaans government.
But instead, he realized that his guards were just as much imprisoned as he was in terms
of viewing the world in black and white terms.
He started to extend compassion and understanding to his guards and showing them this reciprocal
respect and initiating concern and empathy for their families and what they were doing.
In that manner, he didn't just simply react to what the apartheid government had done
to him, but rather he started the reciprocality by extending this idea of understanding and
empathy for the guards and their families.
And that resulted in their respect for him and eventually a level of respect that allowed
Nelson Mandela to negotiate a bloodless transformation of the apartheid government in South Africa.
That's how powerful this small talk about issues that are not directly involved in the
controversy can result in getting out of the impasse and being stuck.
Alright, let's talk a little bit about techniques.
What kind of techniques can we use to try to get on the same side of the table when working
together as we?
This is how we talk as lawyers.
Yes, but.
And we start to make our argument.
By using this way of talking, we basically discount what the other side said.
We're just waiting for our turn to talk.
In the improv world, they use this way of talking.
Yes, and they basically affirm what the other person did or said, and they build on it so
that they don't simply stop the other story.
They continue the story by listening to the other person's words and actions and trying
to build on it and continue the story forward.
This is described in the book Yes, and by the founders of Second City.
And it is this idea of continuing the story rather than cutting off the story of listening
and expanding upon what other people are saying.
This idea of expanding the discussion avoids being stuck in these binary discussions.
It avoids us arguing over and over again about our perspective and how we see the case and
all that.
And it forces us to try to listen very carefully to what the other side is saying and find
out by listening whether there's any commonality that we can draw out of it, whether there's
any avenue that we can take that will be consistent with the positions and interests that the
other side is expressing.
It also allows us to understand whether we can find a way to use the interests of the
other side to blend with our own interests to find a path forward.
But it depended upon us understanding, liking, and respecting the other side.
Another way of thinking about this is the fact that we have different interests is not
necessarily a showstopper, that we don't need to have common ground.
We can have uncommon ground.
We have different valuations of various things so that something that the other side may
think is not that valuable, we may think is very valuable, or we may want to do something
right now or the other side may have a longer time horizon.
So we can adjust and negotiate between different types of interests that might have risk tolerance
and we can shape the agreement if we understand the interests of the other side.
And again, it requires open-ended questions.
It requires a lot of probing to try to understand what the underlying interests of both sides
are so that we can start to find opportunities.
We also need to listen, just like I talked about with respect to the sidal case.
Now to listen to what are the goals of the other side.
What are their objectives and how do we craft the story so that it's a victory for the
other side?
How do we describe what we're doing in such a way that the other side thinks that this
is a good thing, they want to voluntarily agree to this resolution?
One way of exploring the possibilities is to use what if.
What if we do this?
Not so much I offer this or I demand this, but rather what if.
What if we do this?
It's sort of a non-committal kind of thing that allows us to feel out each other and
see whether there is a possibility, a path forward that we can both agree on.
And while we're doing this, it is so important to listen, listen and observe and see how
we can affect each other, how we can use the reciprocality of people to a positive advantage.
See how they're reacting, their first reaction to proposals or what if proposals.
See if there's ways in which we can set out a bunch of alternatives and see which one
is more of interest to the other side than the other.
You know, it's rather than just one offer, one demand, several different possibilities
that we're agreeable to that allows us to understand what is important to them and what
is not important to them.
And in the process, we have to understand that we are messaging.
We are letting the other side know what we are interested in.
And so we have to be very conscious of what we are messaging in the process of this negotiation.
Ultimately, the focus has to be on now.
We can't change the past.
The past is already done.
Whatever happened, happened.
We can only change today and tomorrow.
And so we are seeking some way in which both sides can walk forward together because it
is not something that we can force the other side to agree to.
It is only something that we can collectively and jointly agree to.
It is a voluntary agreement that we are seeking.
Talk a little bit about a mediator's proposal.
mediator's proposal involves this concept of some area, the zone of potential agreement,
where you have a sense that the party offering is willing to offer more than the demands
of the other side.
So there's an overlap between the demands and the offer.
When you have NOPA, which is no opportunity for potential agreement, it means that the
bottom line of the person making demands is above the ceiling of the party that is making
the office.
So there's a gap between the two sides.
And so the mediator's proposal attempts to find that zone of potential agreement or create
that zone of potential agreement by getting the parties to a position where you can encourage
them to come to some kind of a meeting point between the two sides and all that.
There are a lot of people, Mark Lemke and a lot of others, they have much more sophisticated
discussions about how you use mediator's proposal.
The mediator's proposal is one way to help the parties try to get on the same table,
to get into a common perspective about how the case can be resolved.
And the way that it works is both sides are given a number and a certain amount of time
to decide.
And if both sides agree, then we have an agreement.
If one side doesn't agree, then the other side will never know whether they agreed or
didn't agree.
All they will know that if they don't agree, then there's no agreement.
If they said that they agreed, then they'd know that the other side didn't agree.
But basically the idea of a mediator's proposal is to try to encourage that center point for
an agreement.
But one of the problems with mediator's proposal and the idea of brackets, brackets is another
way of getting to that overlap, is that it is oftentimes limited to the narrow binary
two-dimensional trial story that would be in trial or arbitration and what that decision
might be.
It's difficult to force the discussion into this trial story.
And it's easier to tell the largest stories about how and why we should get to a particular
point.
There are also other tools.
And Chabini talks about social proof and authority and scarcity, looking at other verdicts, looking
at what the experts say, being up against a trial so that we have a scarcity of kind
to be able to make a decision.
These are all other ways in which we can try to encourage the parties to work together
to try to resolve this particular dispute.
And ultimately, it's above a voluntary agreement.
The goal in all of these efforts at getting pass and impasse is to get to we.
And we get to we by being curious, by looking beyond the off and on switch, by looking to
solve the other person's problems, to understand the other person's problems, figure out how
we can solve their problem and give them a victory speech as to why they want to agree.
And we get there by gaining their trust, by having this small talk that allows us to engage
them in discussions that allow them to trust us to work out agreement together.
The pandemic introduced a new opportunity for getting passed impasses or getting passed,
getting unstuck when we have mediations.
At the beginning of the pandemic, when everything shut down, I had a whole bunch of cases that
were not ready for mediation.
The parties had not yet conducted discovery.
And so they didn't have enough information in which to rationally negotiate a resolution.
And so what we did was we transformed the meetings on Zoom into five to 15 minute status
conference.
And we use that five or 15 minutes to try to figure out what information each side needed
and how we're going to get it to the other side.
At the time, we didn't know when there was going to be a trial.
And at the time, we didn't know whether we'd go to court for any motions because the courts
were essentially closed for all except emergency motions.
And the result of these status conferences was that we were able to engage in a lot of
small talk in the five or 15 minutes.
Taking the backgrounds, we were all stuck at home and we only could speak to people in
our households.
And so it became a window to the outside in these status conferences.
And we started to observe each other's backgrounds and pets and kids and all kinds of things
were going on and started to joke and identify with each other.
And in the process, we realized that something had changed.
This status conference had changed the whole nature of mediations and how to get unstuck.
That having status conferences from the very beginning of the case allowed us to avoid
a lot of the entrenchment that happens when we are just throwing pleadings and correspondence
back and forth to each other.
That it allowed us to talk and to find out whether there's ways in which we can avoid
the expenses of discovery to try to resolve the case.
I think there are a number of things that helped.
One, it was very convenient.
It didn't take any time at all to get onto a conference call on Zoom and to have a discussion
about what information we needed and how we're going to get the other side.
Like I said, the status conference will take about five or 15 minutes.
In addition, the format of the Zoom conference was such that all the people were the same
size.
And so the idea of dominance, of size dominance or anything like that, was sort of eliminated
because everybody was about the same size.
The camera size or the boxes that we were in were such that we were actually very close
to each other.
We could see each other's faces in such a way that we could observe reactions of other
people to what we're talking about, which became very useful in terms of getting a sense
of what people were really thinking in our discussions.
And I think probably one of the most important things about this status conference was that
we could see ourselves.
And so in a conference room, you can see everybody else, but you can't see yourself.
You can't see how you appear to other people.
And I think that had an effect in tempering everybody's comment.
People who are a lot nicer online than they might have been in person.
They could see themselves, they could see the effect that they're having on other people.
This status conference also did another amazing thing.
It took away the threat as being the way in which we negotiated.
The threat of trial.
We didn't know when we were going to go to trial.
The threat of motions.
We didn't know when the courts were going to entertain motions about discovery or anything
else.
And the threat of leaving a mediation was also eliminated because basically everybody
was at home already.
So where are you going to go?
Are you going to turn off your camera and leave the mediation?
But you're right there.
We could bring you right back by just calling you up and saying, hey, come back on the mediation.
And so by eliminating threats, we started to negotiate in a different fashion.
And I think that that resulted in a much, much higher level of resolution of all these
cases.
And most of the mediation were a lot shorter as a result of this online status conference.
Probably the most valuable thing, though, about these status conferences is that we
didn't have these marathon sessions anymore.
That we could meet and figure out what information that we needed in order to resolve the case.
And we could take a break, get that information, or get the right person to come to the mediation
to be able to talk about a particular thing.
And in this fashion, the mediation actually became segmented as opposed to one continuous
time when we depended on exhaustion as the basis for a resolution.
Now it's a matter of everybody agreeing, voluntarily agreeing to a resolution.
The other thing that came about because of the pandemic that helped us to get past these
impasses and get unstuck was an interest in early dispute resolution.
And there's an early dispute resolution institute that is started by Peter Silverman, Michael
Hawash, and Jordan, who introduced me to this concept of decision trees and a free website
that can help us to evaluate cases.
This is the website, the QR code there.
If you put your phone on it, you can go to that website.
The only problem with this website is that it's not intuitive in terms of how to use
it.
And so I'm going to kind of demonstrate a little bit about how we use this particular
website.
This is a website, Silver Decisions.
It's a website out of Poland.
And this is the first screen that you will see if you go to SilverDecision.pl.
If you click on the run box, you'll get a screen that looks like this.
And again, because it's not intuitive, it's a little bit difficult to use, but I'm going
to show you how it's done.
Basically, if you right click on your mouse, you get two choices here, or several choices,
but the main one is whether to add decision node or a chance node.
And decision node is where we start.
And then you'll see that there's two exclamation marks, and that means that this is an incomplete
model.
This decision tree model is incomplete, and it says the path not ending with a terminal
mode.
There has to be a terminal node in order to complete this decision tree.
And so I'm going to make this a little bit bigger, and I'm going to add, by right clicking
again, we can now add a decision node, a chance node, and a terminal node.
And so I'm going to add a chance node.
This is where we get choices.
And again, here you see the double exclamation mark, and it says that this path is not ending
with a terminal node.
And so the probabilities do not add up to one.
So now I'm going to add a terminal node.
And you'll notice there's no exclamation mark now, because there is a terminal node.
This one choice, it indicates the probability.
So it's 100% going to this chance node, 100% going to this terminal node.
But if I add another terminal node, what happens is it divides the probabilities in half.
And so if you look at the probabilities on any one of these legs, you'll see that there's
a hashtag under probability.
And the hashtag just simply means that the probability will be divided equally between
however many legs you have.
And so if we added another terminal node, the hashtag divides the probabilities for these
outcomes by one third.
So in looking at this decision tree, we can start to build a little bit of a model to
think about the future without actually having to live the future.
And so this first leg of the model is what we'll label as a trial.
And this is what it's going to take us to get and go through trial.
And then next level, it's this payout or payoff.
And here we have to put in what it's going to cost us to go to trial.
And so because it's going to cost us something, it's going to be a negative number.
So we're going to put negative, let's say $100,000.
So if it's going to cost us a negative $100,000 to go to trial, and if the result in all the
probabilities is zero going to trial, the current value or the expected value right
now of not going to trial is that we would pay out $100,000.
So if we were going to go to trial, it would cost us $100,000.
And if we were at the probabilities where we're going to get nothing in our trial, then
the value to the defendant would be to pay $100,000 rather than expend this $100,000.
And there's no benefit in expending the $100,000 going forward.
Now if the likelihood of a high verdict was, say, a million dollars, or we could lose a
million dollars, so it would be a negative for the defense.
Now the value of not going to trial, if there's a 33% chance of a high verdict or a million
dollars, the value is $433,333.
That's taking into account the cost of trial and the possibility of a negative verdict.
So anything less than $433,000 for the defense might make sense because it's less than what
it's going to cost and the probability of one third chance.
So it's not a million dollars, it's a one third chance of getting a million dollar award.
And if we flat the low verdict might be $500,000, again it's negative because it's what the
defense would have to pay out.
And there's a 33% chance that it's going to be $500,000, not 33% chance that it's going
to be a million dollars, and 33% chance that it will be zero and let's call this the defense
verdict.
Then the value of the case is $600,000 of not going forward.
These are our risks and we want to avoid these risks then it's worth paying $600,000 today
to avoid these possible risks.
And if we thought that the defense likelihood was actually much higher than 33% and we thought
it was more like 60% then we would put in.6 and it would change the equation and where
we had running hashtags it just simply equals out the probabilities.
So 60%, the 40% probability is divided equally 20%, 20%.
So the 60% chance of defense verdict now the value is $400,000.
But you can see how we can put in whatever numbers we want and there's no match to any
of these numbers but you can put in different numbers that will help us to see what the
likelihood of things going forward might be and we put in our own estimates of what the
likelihood is.
But it gives us an indication of what that's worth today in today's dollars.
So if we could pay less than $400,000 if this is what we think is likely to happen then
it's a better deal than going through this whole process and risking this particular
outcome.
Now we can also look at it from the plaintiff's perspective and say from the plaintiff's perspective
the cost is $100,000 and so again the payoff is a minus $100,000.
So the cost to the plaintiff or going to trial if they're going to win nothing is minus $100,000.
But if they think that they're going to win a million dollars then it's a positive number
because this is something we're going to keep.
So now the case is worth $100,000 going forward if there's a 40% chance of a million dollar
verdict.
Now let's say the little verdict is $500,000.
It's positive.
And again it's a positive number because it's what the plaintiff will recover.
So the plaintiff is better off if they got $200,000 rather than going through and risking
this particular scenario.
Now defense, they might think that defense chances are not 60% but is only about 40%.
I think it's only 4% chance.
And so the value of resolving the case today is $350,000.
This is the risks that we may encounter going forward.
And so you can see how the plaintiff's version and defense version are very different in
terms of what it looks like and how you value it the case.
Now how do you use this?
This is not an exercise in everybody agreeing on what the high verdict is, what the low
verdict is, what defense like reviewed is or anything like that.
That's not the purpose of this at all.
The purpose is to help people to evaluate what they're thinking, to get out on paper
their thoughts about what the future looks like, what the risks of the future look like.
And by doing that we're able to show people what the future looks like without, according
to them.
Again, the numbers are just numbers.
And there's no magic to any of these numbers.
It's just a probability analysis, decision tree probability analysis.
And so the only purpose of this analysis is to help people to see for themselves what
their future looks like according to their own assumptions.
You can't use the defense assumptions and impose it on the plaintiff.
It's like forcing somebody to agree with a different set of facts.
And you can't take the defense, the plaintiff numbers and enforceable defense.
The numbers only work for the people that are using them.
The only people that they're important to is the ones that are putting these numbers
in.
So the defense puts in their own numbers, the plaintiffs put in their own numbers.
And what they're looking at is not whether this is true or not.
They're looking at, given their assumptions, what that future looks like and what that
means in terms of what the case is worth today, this expected value number today.
And oftentimes you'll see that the expected value number overlaps, even though their assumptions
about the numbers and the defense likelihood and the like don't overlap.
Just another tool in getting people unstuck.
Well, thank you very much for listening to my thoughts about how to get unstuck.
How do we get past these impasses and how do we get on the same side of the table to
reach a voluntary agreement?
As we talked about, the goal is to think we, to get on the same side of the table and try
to understand each other so that we can solve together the problem on the other side of
the table.
We have to be curious in order to reach that goal.
We have to look beyond just the decisions that are made in court and realize that we
can agree to anything.
And we can understand each other's interests and what we want to get.
Maybe there's opportunities for other types of agreements that will make sense for everybody.
We don't have to be limited by what the court can decide or can't decide.
But in order to do that, we have to not think solely about ourselves and about protecting
ourselves.
We have to try to understand the other side's perspective.
We have to try to solve the other side's problems.
And we do that by building trust.
And we build trust through small talk, through just talking about things unrelated to this
particular dispute so that we can build the kind of trust and relationship that allows
us to get on the same side of the table and think as we to solve these problems.
Thank you.
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