June 01, 2017

Settlement Negotiations: Balanced Beats Brazen

The single most important element of effective negotiations is being informed.

Dan A. Bailey

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Too often we think that the best settlement can be achieved only through overly aggressive and blustery tactics. The meaner the lawyer, the better the result. That’s sometimes true, but not always. While a negotiator who takes firm positions and creates the impression of having limited room to compromise can get good results, there is a big difference between a tough approach and an arrogant, audacious, or emotional “junkyard dog” style. A truly skilled negotiator is far more effective at getting a good settlement than someone who relies merely on bullying tactics.

The single most important element of effective negotiations is being informed. The negotiator should have a good understanding of the relevant law and facts, the strengths and weaknesses of each party’s positions, and the litigation goals of each. Knowledge is king. Do you have a strong case or a weak case? How will further litigation of the dispute help or hurt your client or your opponent? What are the risks if you lose at trial? What are the financial and nonfinancial costs to settling as compared with litigating? Consider the impact on each party’s reputation, the distraction and emotional toll from further litigating, and the precedent created or avoided by settling or litigating. Also assess the loss of other opportunities by further litigating.

The analysis must be as objective as possible and not be skewed by the natural emotions inherent in most disputes. Clients believe their positions are clearly the correct ones. It takes a skilled—and brave—lawyer to convince them otherwise. Chutzpah has no role in that part of the process.

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