Creating Value

(This is the tenth in a series of posts on preparing for mediation.)

Most lawyers tend to think of the settlement of a lawsuit as cutting up a fixed pie. The bigger piece my client gets, the smaller piece your client gets, and vice versa. The size of the pie is fixed. In game theory, this is known as a zero sum game. If the settlement is $1.5 Million, where my client paid $1.5 M and your client received $1.5 M, that’s a zero sum, because $1.5M minus $1.5M equals zero.

Here’s the classic example of creating value. Two sisters are arguing over who gets an orange. They are very positional and neither is willing to give in. A directive or evaluative mediator might cut the baby (orange) in half, giving half to each. A facilitative, interest-based mediator, however, might ask questions about the underlying reasons each sister has for wanting the orange. In doing so, it is uncovered that the older sister wants to use the rind for flavoring in a cake, and the younger sister wants to use the pulp and juice to make orange juice.

Under the directive or evaluative approach, the older sister gets half an orange and makes a cake flavored with the rind of half an orange. The younger sister gets half an orange and makes half a glass of orange juice. Under the facilitative, interest based approach, the older sister makes a cake flavored with the rind of the entire orange and the younger sister makes a full glass of orange juice. The mediator in the latter case, just by asking good questions, has created value for both parties.

Facilitative mediators are trained in asking questions that encourage the parties to think about expanding the pie. Rather than considering these questions for the first time at the mediation (in reaction to a mediator’s thoughtful questions) why not be proactive: think of them ahead of time in preparing for the mediation. In the quiet (ha!) of your office, not the heat of the negotiation, you may think of some great new approaches to settlement.

Consider apology. Consider the use of a portion of the settlement funds for an altruistic and meaningful tribute. Consider pieces of the settlement the other side might find more desirable than your client does and brainstorm ways to make the settlement work for both sides by creating value.

Professors Stephen Goldberg (Northwestern) and Frank E. A. Sander (Harvard) published certainly a more erudite article which goes into greater depth in last Summer’s issue of Litigation magazine: “Selecting a Mediator: An Alternative (Sometimes) to a Former Judge.” (Subscription required. I am petitioning the ABA to get a non-subscription link. Stay tuned.)