Beyond Winning

by Robert H Mnookin

  But often emotions cloud a party’s judgment and make it more difficult to reach agreement. Whether in a bitter divorce, the dissolution of a business partnership, or a hostile takeover, anger, resentment, and revenge may motivate litigants more than rationality. In deals, competition, anxiety, frustration, fear, and envy can complicate bargaining.

  An attorney may be able to help his client by empathizing with the client’s fears or anger or by serving as a more moderate emissary to the other side. For example, two lawyers might help repair a joint venture where the managers on each side feel so angry that they have lost sight of conspicuous long-term gains. Attorneys can also intensify an already emotional negotiation, however. A lawyer may take up the gauntlet and act out his client’s passions against the other side, escalating the emotional nature of a negotiation. Or a lawyer may add fuel to his client’s fire, providing examples of how the client was wronged, why the client should be angry, or how vengeance might be possible.

  THE CHALLENGE OF LEGAL CULTURE

  A lawyer’s ability to help a client overcome these effects, and engage in constructive problem-solving, may be further constrained by legal culture—the set of implicit assumptions, expectations, and roles by which both lawyers and clients attach meaning to their relationships.18 What are the scripts by which lawyers and clients play out their roles? By which lawyers deal with one another? What does it mean to be a lawyer? To be a client? To have a legal conflict?

  Tacit cultural assumptions about what game you are playing can have a profound influence on negotiation and the ease with which cooperation can be established. Consider some highly suggestive research in which two sets of subjects were asked to play a game and were given identical instructions, identical opportunities to cooperate or defect (that is, to try to exploit the other side), and identical real-money payoffs. The only difference was that one set of subjects was told it was playing “The Community Game,” while the other set was told it was playing “The Wall Street Game.”19 What would you expect occurred? True to the experimenters’ hypothesis, those subjects playing “The Community Game” cooperated more frequently and more durably than those playing “The Wall Street Game.” The latter group tended toward defection, based on their assumptions about what Wall Street play is like.

  To the extent that legal culture conjures up notions similar to those created by “The Wall Street Game,” it makes negotiating in a value-creating, problem-solving mode harder for lawyers. Of course, there is no one dominant and homogeneous legal culture—different subcultures prevail in different parts of the country and in different practice areas. The American legal profession is a diverse and decentralized body, and it would be wrong to pretend that one could identify a single set of cultural norms shared by all members. Indeed, one of the great strengths of the legal profession is that local professional norms can develop and flourish in ways that facilitate and sustain cooperative behavior between attorneys.

  Nevertheless, many lawyers and clients share a mindset that encourages adversarial confrontation rather than collaboration. Consider the following cultural themes that often seem to prevail in legal negotiation.

  The Zero-Sum Mindset

  Lawyers and clients too often assume that legal negotiations are purely distributive activities. “Our interests are opposed to theirs; what one side wins, the other side loses.”20 This zero-sum mindset is powerful and pervasive. Lawyers often report that legal negotiating is, by definition, strategic hard bargaining. Although they acknowledge that sometimes value-creating moves are possible—particularly in deal-making—they assume that value creation is merely icing on the cake, which still has to be sliced up through a distributive struggle. Clients frequently share this view and expect their lawyers to behave accordingly.

  The Adversarial Mindset

  Many lawyers and clients see legal negotiation as combat. The tougher, braver, more aggressive negotiator wins, and the weak or more conciliatory one loses. Some lawyers say that only a pit bull can survive.21 Any attempt to change this modus operandi is seen as soft or confused. In response to a growing call for greater civility between lawyers,22 for example, in 1997 the New York divorce lawyer Raoul Felder wrote an editorial in The New York Times, arguing that lawyers are hired to be adversaries and that the legal profession is about conflict. His op-ed piece was entitled “I’m Paid to Be Rude.”23

  Many players in the legal game enjoy fierce competition, whether they admit it or not. Thus, legal culture offers a convenient smokescreen that allows lawyers to be as aggressive as they please while blaming their behavior on the other side and on an intractable system. And clients like to compete, too. They often enroll attorneys as their agents of aggression, to act out their most hostile fantasies and to voice those things that the clients could never bring themselves to say to the other side. As one litigator recently commented, “Clients love nasty lawyers; we’re hired to do the dirty work they don’t want to or can’t do. ‘Sue the bastards’ isn’t idle talk. When you’ve been harmed, you want your pound of flesh. So the evil lawyer pulls in the big bucks. He or she is mean, tough, unrelenting, pushing, jabbing, demanding, withholding as befits the opportunity to thwart the other side. Let’s face it, being difficult has . . . great rewards.”24 Some clients are not satisfied unless their lawyer draws blood. Although clients increasingly acknowledge that blood is expensive25 and claim to want their lawyers to behave in a more efficient and civilized manner, many clients continue to assume that legal negotiation is supposed to be characterized by threats, power tactics, and emotional fireworks.

  Of course not all lawyers are warriors and not all clients want pit bulls. These attitudes undoubtedly mark the litigation process more than deal-making. But in both domains, many lawyers and clients implicitly assume that the lawyer’s role is to be a fighter who will go in swinging.

  The Hired-Gun Mindset

  Clients may expect lawyers to behave aggressively when they deal with the other side, but in lawyers’ dealings with their own clients everything is supposed to change. Within the cozy confines of the lawyer-client relationship, the lawyer is expected to transform himself from a pit bull into a golden retriever. Of course, every client is entitled to loyalty, confidentiality, and diligence under the lawyer’s code of professional ethics. Here we are talking about something else: the notion that a lawyer should adopt his client’s agenda uncritically—and fetch on command.

  Clients often expect more than just empathy from their lawyer—many clients expect doglike devotion.26 And many lawyers believe that they have to provide it. But uncritical devotion is usually not best for the client in the long run. If a lawyer adopts a solely empathic, nonassertive role with his client, he may not probe his client’s interests adequately. Moreover, in taking an adversarial stance with the other side he may fail to listen, inquire, or demonstrate understanding, and he may not communicate the other side’s views effectively to his client—because his client may not want to hear them.

  To the extent that a client expects only empathy and agreement from her lawyer, a lawyer who pushes back may take the client by surprise. This can have serious repercussions for the entire system of relationships that constitute a legal negotiation. A lawyer needs to help his client clarify her own interests, and he needs to be sure that his client has realistic expectations about the opportunities and risks of alternative courses of action. However, a lawyer who is unsure of his relationship with his client may find it easier not to rock the boat; adopting a sympathetic stance toward the client and a highly adversarial stance toward the other side will reassure the client that the lawyer is acting in the client’s best interest and will not open room for doubts about the lawyer’s loyalty.

  But when such a lawyer goes to negotiate across the table, he may be unprepared to take a problem-solving approach because he doesn’t know his client’s interests and hasn’t thought about possible value-creating opportunities. If the other side appears to be playing hardball, the lawyer may be even more t
empted to follow the standard script. And if he does try to understand the other side’s point of view, how is he going to explain that to his client? Won’t she think that her lawyer is being disloyal if he starts explaining how the other side sees the situation?

  We call this the assimilation problem. Just as nations worry that their international diplomats have “gone native” and adopted the customs, practices, or beliefs of their host country—to the potential detriment of their ability to represent their homeland’s interests—so in legal negotiations a client may fear that her ambassador (her lawyer) has switched allegiances during the negotiations. This fear may lead the client to discount the lawyer’s advice, or to marginalize or even replace the lawyer because of doubts about the lawyer’s ability to advocate forcefully for the client.

  It can be easier to badmouth the other side than to assert appropriately with one’s own client. Sometimes lawyers create solidarity with clients by demonizing the other side—creating an us-against-them dynamic. An attorney may describe the other side’s actions to her client in a way that provokes the client, not in a way that favors rational decision-making. The attorney’s attempt to shore up his relationship with his client may ultimately damage the lawyer-lawyer relationship, the client-client relationship, and—potentially—his own lawyer-client relationship (if it gets back to his client that he has exaggerated his story about the other side).

  CONCLUSION

  Both dispute resolution and deal-making present a host of strategic and interpersonal challenges: tough, high-stakes distributive issues, primarily about money; explosive emotions and sometimes unfriendly relations; temptations to exploit, defect, escalate, and stonewall; and opportunities to use lawyers and the legal process to gain advantage at the negotiation table. Irrationality, emotion, and adversarial cultural norms all can complicate the process of managing the three tensions of negotiation.

  The zero-sum mindset increases the tension between creating and distributing value because it inclines lawyers and clients to assume that the pie is fixed and that the lawyer’s task is simply to fight over its division. When lawyers or clients overvalue their own case and fail to grasp the merits of the other side’s, it becomes harder to reach agreement. The adversarial mindset may lead lawyers to emphasize assertiveness across the table at the expense of demonstrating understanding of the other side’s views. Partisan perceptions may make each side quick to blame the other for differences or conflicts and make it hard to listen to the other side’s opinions.

  Then there are agency challenges. If disputes and deals turn into combat, it is easy for a lawyer to justify rising costs by blaming the other side. Rather than accepting appropriate responsibility for his own part in a wasteful conflict, a lawyer can hide behind the system of relationships and focus his client’s attention on others in that system. Moreover, a lawyer can manipulate his client’s psychological biases and emotions to increase or justify fees. If a client is overconfident, a lawyer may bolster the client’s opinion rather than test it against reality. If a client has partisan perceptions, a lawyer may adopt the client’s version of events in order to prolong litigation or a deal-making negotiation. A lawyer may—consciously or unconsciously—frame choices to her client in such a way as to make it more or less attractive to settle, depending on the lawyer’s interests. All of these factors can make it harder to manage the third tension in legal negotiations.

  In Part III we offer advice to lawyers to help them better manage the three tensions in the context of the system of relationships. We emphasize the lawyer-client relationship and the importance of working with your client to change adversarial assumptions. We also demonstrate how you can confront and tame adversarial behavior on the other side of the table.

  III

  A PROBLEM-SOLVING APPROACH

  Jake and Samantha Greene married eight years ago, right out of college. Jake went to graduate school to get an MBA and now works in marketing for an east coast food distributor; he earns $85,000 a year. Samantha worked in journalism for a few years, but when she and Jake decided to have their first child she began writing copy for a children’s web site run by a major publishing house. They now have two children—Gordon, age 5, and Jimmy, age 2—and Samantha continues to work out of their home two days a week, earning approximately $20,000 per year. They own a house that they bought six years ago for $110,000, which is now worth about $190,000. The mortgage balance is $79,000. They have two Hondas, one two years old, the other five; the newer car has a loan with a $6,200 balance, payable at $300 per month. They have $22,000 in savings and checking accounts, and Jake has $45,000 of stock he inherited three years ago from his grandfather. Jake also has about $35,000 accumulated in his pension account.

  For a variety of reasons, about six months ago at Samantha’s request they separated. Jake rented a small apartment near their home, and they have been seeing a counselor on a weekly basis. During this time, Jake frequently came by the house to see the children, and they paid various bills and handled finances as before. Two weeks ago Samantha announced that because she thought a reconciliation was not in the cards she wanted to proceed with a divorce. She has since retained a lawyer and has filed a petition to initiate the process. In her divorce petition she demanded sole physical custody of the two children, monthly child support payments, and ownership of the family home. She also demanded “permanent alimony”—monthly spousal support with no set termination date. Jake was surprised to receive the petition because he didn’t expect Samantha to rush into filing. He was also shocked at what he felt were her unreasonable demands. He is about to meet with his attorney, Tony Watson, for the first time to discuss what to do next.

  Part III outlines our vision of how a problem-solving lawyer might effectively manage the challenges of a legal negotiation such as this one, both with his own client and with the lawyer on the other side. By now the goals of a lawyer who wants to approach negotiation as a problem-solver should be reasonably clear. The overarching aim is to manage the distributive aspects of bargaining efficiently and create value whenever possible. Each of the three tensions suggests subsidiary purposes as well:

  • To search for value-creating trades that make use of differences in relative preferences; to minimize transaction costs and to protect the client from opportunism; and to tailor a negotiated agreement to your client’s interests in light of the legal opportunities and risks

  • To demonstrate understanding of the client’s story, interests, and priorities; to assert your client’s views effectively to the other side; to demonstrate to the other side your willingness to listen; and to help your client better understand the other side’s views

  • To establish an effective relationship with the client that efficiently allocates roles and responsibilities; to use incentives and monitoring to minimize agency costs; and to be aware of the agency relationships on the other side

  A lawyer’s ability to problem-solve depends, in part, both on her relationship with her client and on the lawyer and client on the other side. In the easiest case, everyone in the system wants to problem-solve. The underlying client-client relationship may be solid and friendly, you and the lawyer on the other side may have a prior working relationship, and both clients may have worked with their respective lawyers productively. In such situations, conditions are ideal for problem-solving. In a more mixed case, the lawyer on the other side may want to problem-solve but his client doesn’t. Or all the players in the system may want to problem-solve except your own client. In that situation you will have to try to educate your client about the benefits of problem-solving while meeting the client’s needs and expectations.

  Sometimes both lawyers may want to problem-solve but neither client may agree. The two lawyers may have a strong and productive past relationship, and each may have worked with their respective client previously. But the clients may have a conflict-ridden relationship marked by bitterness and past insults. An employee suing a former employer for age discrimination may
be angry that he was passed over for a promotion. A wife suing for divorce may be bitter about her husband’s new relationship with another woman. Two corporations may have a long history of distrust that pre-dates any current conflict. Even in deal-making, two parties may approach each other warily if they have a tradition of past disagreements or bad faith. In these situations problem-solving may still prevail. The past lawyer-lawyer relationship may assist these attorneys in working together to help resolve their clients’ problems. And the existence of past lawyer-client interactions may make suggestions to problem-solve more palatable and persuasive to otherwise skeptical clients.

  In some instances, of course, you and your client will want to collaborate with the other side, but the other side won’t want to go along. They may start negotiations in a very adversarial posture and try to take advantage of you. In this situation the problem-solving lawyer and client must decide whether they can persuade the other side to come along or whether they will have to adopt a different strategy in order to protect themselves.

  The final, and perhaps most difficult, case is one in which a lawyer wants to problem-solve but no one else in the system does. You find yourself caught in the middle between your client and the other side, seeing no allies. You have vowed to protect your client’s interests, and you face pressure from both your client and the other side to negotiate with your cards close to the chest. Despite the best of intentions to find value-creating opportunities and to balance empathy and assertiveness, you may not see any way to do so without running the risk that your client will be exploited and your own reputation weakened. This would be the most demanding context in which to take a problem-solving approach.