1. 1 A Tool to Prepare Your Client for Mediation Asia-Pacific Mediation Summit New Delhi February 15, 2015 George J. Siedel Ross School of Business University of Michigan gsiedel@umich.edu

2. 2 Agenda 1.Assumptions Mediation is a negotiation.Mediation is a negotiation. Mediation is different from other negotiations.Mediation is different from other negotiations. Decision trees can be useful in handling the difference.Decision trees can be useful in handling the difference. 2. Creating Decision Trees: Three Steps 3. Creating Decision Trees: Your Turn 4. Using Decision Trees Beyond Mediation 5.When Your Client Is the Problem: Life Goals Analysis (if time)

3. 3 Assumptions: Part I Mediation is a type of negotiation. Lawyers should prepare for mediation by using the same tools they use when preparing for lawyer-to-lawyer settlement negotiations (and other types of negotiation).

4. 4 Examples of Negotiation Tools Negotiation Planning Checklist Negotiation Style Assessment (for cross-cultural negotiations) Checklist of Psychological Tools Life Goals Analysis Free app: negotiationplanner.com (from “Successful Negotiation” MOOC)

5. 5 Negotiation Style Assessment

6. 6 Checklist of Psychological Tools 1.Don’t assume that you are negotiating over a fixed pie (and avoid reactive devaluation). 2.Use anchoring in developing a first offer strategy. 3.Avoid overconfidence when making negotiation decisions. 4.Frame the other side’s choices to your advantage. 5.Look beyond easily available information. 6.Look at negotiations from the other side’s perspective. 7.Encourage reciprocity from the other side. 8.Use the contrast principle. Source: Negotiationplanner.com

7. 7 Assumptions: Part II Although it is a negotiation, mediation is different from lawyer- to-lawyer settlement negotiations because of the active role of three additional parties: Your client Mediator Other side’s client

8. 8 Assumptions: Part III Lawyer must play role as a teacher to these three parties when: Preparing client for active role in mediation, Explaining client’s position and interests to mediator during pre-mediation meetings (?) and separate meetings, and Explaining case to the other side’s client during joint meetings. This role can be challenging when there are language differences. Visualization can help.

9. 9 Assumptions: Part IV Your client’s Best Alternative To a Negotiated Agreement is especially important because the BATNA is a key source of power in negotiations. In dispute resolution negotiations, the BATNA is often litigation or arbitration. A key teaching responsibility is to explain this BATNA to your client—and sometimes to the mediator and the other side.

10. 10 Assumptions: Part V Decision trees are useful tools for analyzing, explaining and visualizing the alternative to a mediated agreement. Decision trees can help the client understand the legal analysis. They can also be useful when communicating with the mediator and the other side—especially when language barriers. Creating a decision tree is a 3-step process.

11. 11 Continue Settle No access Software similar Invalid Copyright valid Software not similar Access

12. 12 Continue Settle No access Software similar Invalid Copyright valid Software not similar Access 6 M -300K 1.5 M.4.6.3.7.2.8

13. 13 Executive MBAs: What do lawyer’s statements mean? Similarity: “better than even” Access: “it is likely” Copyright Validity: “high probability”

14. 14 Executive MBAs: What do lawyer’s statements mean? “better than even” = 0-99% “it is likely” = 30-99% “high probability” = 25-99%

15. 15 Continue Settle No access Software similar Invalid Copyright valid Software not similar Access 6 M -300K 1.5 M.4.6 EV = 1.8.3.7 3.2 M.2.8 4.7 M

16. 16 Create Your Own Decision Tree Your client (a supplier) claims that a customer owes 4.6 million. Customer says components your client supplied were defective. If the claim is litigated, there is a 50% chance you will find email evidence resulting in win for your client. If no evidence, you lose. If litigation, estimated legal and other expenses are 400,000 each for both sides. You are preparing your client for mediation. What if other side offers $2 million? Accept?

17. 17 Litigate Settle Win (obtain email evidence) Lose (no email evidence)

18. 18 Litigate Settle Win (obtain email evidence) Lose (no email evidence).5 4.2 M -400 K 2 M

19. 19 Litigate Settle Win (obtain email evidence) Lose (no email evidence).5 4.2 M -400 K 2 M 1.9 M

20. 20 Using Decision Trees with Psychological Tools 1.Don’t assume that you are negotiating over a fixed pie (and avoid reactive devaluation). 2.Use anchoring in developing a first offer strategy. 3.Avoid overconfidence when making negotiation decisions. 4.Frame the other side’s choices to your advantage. 5.Look beyond easily available information. 6.Look at negotiations from the other side’s perspective. 7.Encourage reciprocity from the other side. 8.Use the contrast principle. Source: Negotiationplanner.com

21. 21 Litigate Settle Win (no email evidence) Lose (email evidence).5 -400 M -5000 (-4600 + -400) -2 M -2.7 M Look at Case From Other Side’s Perspective; Anchor Them on EV Loss (2.7 M)

22. 22 Other Uses for Decision Trees Sensitivity Analysis (for example, in budgeting discovery costs) Expert Witness Fees

23. 23 But remember… Decision analysis helps “identify and sort out the issues in the case…[but nobody commits to anything by merely engaging in the analysis.” David Hoffer, “Computer-Based Risk Analysis,” quoted in Siedel, “Using Decision Tree Analysis to Break an Impasse in Mediation,” in Mediation Techniques (International Bar Association, 2010)

24. 24 When Your Client is the Problem …try a Life Goals Analysis. Family goals. Do you want to spend more time with your family? How will you spend that time? Leisure goals. What do you enjoy doing when you aren’t at work? Retirement goals. When do you plan to retire and what will you do during retirement? Financial goals. What are your financial plans and how will you achieve them? Business and career goals. Do you have any plans to start a business or move to a new job? Relationship goals. Do you anticipate any changes in your personal relationships? Service goals. Do you want to increase your community service? Lifestyle goals. Do you have any health concerns? Do you want to change your lifestyle? Free app: negotiationplanner.com