And to Think That I Learned Mediation from Mulberry Street
Many mediators rely on former titles or the length of their resume to prove they know how to close a deal for you. While that may work for some, I have found that long before I began my legal career, I had all the advice I needed to make sure I was successful in helping people find a way to reach a deal. As it turns out, I learned everything essential about mediation from my grandfather.
My grandfather, who I had the fortune to be raised by, was born and raised in Springfield, Massachusetts, between the future site of the Naismith Memorial Basketball Hall of Fame and the end of Mulberry Street - made famous by fellow Springfieldian Dr. Seuss in his book And to Think That I Saw It on Mulberry Street (yes, it’s a real street … home to Milton Bradley Elementary School … yes, THAT Milton Bradley … the alma mater of both Dr. Seuss and my grandpa).
While growing up, aside from learning of the intersection of a pretty random collection of American History, I learned everything essential to guide you to success in your next mediation. And while I can’t deliver it in anapestic tetrameter (heck, I can't even make it rhyme), I hope it will help you nonetheless!
I. You Won’t Get What You Don’t Ask For: Make an ‘Embarrassing’ Offer
Why it Works
What to Watch For
Don't be afraid to make an embarrassing offer - you can use it to your advantage if you’re willing to put yourself out there.
You have no idea what pressure the other party is under, especially what they are hiding from you. Because of this, they may be willing to accept an otherwise embarrassingly low or high offer. So, it would be best if you rolled the dice.
In my experience, the embarrassing offer will be accepted or negotiated about 5% of the time. So, yes, 19 out of 20 times, it’ll be immediately dismissed - but that one time is golden. I once had a technology licensing matter where the parties had tried mediation before and failed to reach an agreement. The court ordered them back to mediation nonetheless, and I had the ‘luck’ of getting them through my service on the court’s panel. In pre-mediation discussions with either side, I quickly learned the size of the problem before us. However, I also learned that, unbeknown to the other side, one side had a cash crunch (I later learned they had a significant investor pull-out at a bad time for them). I also learned from the other side that they were not opposed to the total pricing but did not want to spend on something they weren’t sure would work out.
With this in mind, we were able to craft an opening offer that had significantly lower up-front payments and only had valuable later payments upon the overall success of the underlying product being developed by the licensing firm using the technology. The licensor was shocked when the licensing party responded and negotiated upon this (due to their more immediate cash crunch). But it just proves that you don’t know what the other side is facing.
Furthermore, you have so little to lose. Many people don’t want to make the embarrassing offer because they believe it will derail the negotiations. But, honestly, if someone walks out of a negotiation because of a low-ball or high-ball offer rather than giving you a chance to ’correct’ your miscalculation, I have news for you - they weren’t going to settle anyway. They weren’t ready to do so and were looking for a reason to leave the negotiation. So, take the chance and start making a killing on 5% of your negotiations.
II. Remember Your Mistakes …: Keep Perspective on How Smart You Are
Why it Works
What to Watch For
People tend to believe that intelligence is a defense against being fooled, but that is not the case. I’ve seen many brilliant, well-educated, street-smart people be BS’d mercilessly in business dealings or political matters.
The problem is that brilliant people fail to ask the same questions as less intelligent people - the critical questions that would expose BS - from others and in themselves. Intelligent people are no less prone to problems with critical thinking (such as cognitive biases) - sometimes because they are hearing what they want to be the truth and other times because it would take great effort to uncover the truth, actions that they might not be willing to make or might not be able to make.
In one mediation I handled, the parties could not agree on the value of a property because they were both under the assumption that the property had additional value when combined with an adjacent property owned by one of the parties. Further, the party holding the adjoining property was an otherwise savvy landlord managing other properties. (This one came through an inheritance situation, which added additional emotional baggage.) When I investigated the zoning regulations and determined for them that there was no possibility of combining the lots for a much larger project (without a Conditional Use Permit and overcoming significant local opposition), the parties all had to re-adjust their understanding and sense of the value of the subject property. Painful as this was, it allowed them to begin the negotiations anew and, this time, reach a settlement.
Bear in mind, though, if you’re trying to understand the other side’s motivations, you might not be able to do so - and that’s ok. Your job is not to make them make sense; it is to get them to a place where you can make a deal that benefits you. You only have to remember your mistakes - don’t worry about theirs!
III. But Move On Quickly: Maintain Your Confidence
Why it Works
What to Watch For
Mistakes are an inevitable part of the human experience. We all make errors, misjudgments, and blunders from childhood to adulthood. Feelings of inadequacy, frustration, and disappointment can often accompany these missteps. However, keeping your mistakes in perspective is critical for personal growth and resilience. Nonetheless, a mistake does not mean that all is lost.
In the mediation I discussed above, the parties who did not own the adjacent property had a variety of responses. Indeed, most other parties believed that almost all the property’s value was tied up in the hypothetical development of a much larger project after the future combination of the lots. They were ready to make significant concessions when they learned that no larger project was possible. Yet in doing so, they would have tossed away the value to the party that owned the adjacent lot in owning his neighbor - always a valuable proposition. Indeed, in this case, it was more valuable than the market would justify to the party who held the adjacent lot and was perceived as more financially savvy by the other parties.
By holding the line on their side, they could secure a more advantageous settlement than I suspect they would have been willing to accept in the immediate aftermath of having learned their mistake. Keeping their wits about them - driven by one member of their team (a non-owner spouse of one party in the room) allowed them to recover significant value.
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IV. Kill Them, With Kindness
Why it Works
What to Watch For
Kill them with kindness by responding to their negativity with positive words and actions. You can strengthen your case by showing them respect and compassion, whether deserved or not, and trying to understand their origin.
Keeping cool lets you control your emotions, focus on your goal, and think more clearly. You remain in control by avoiding getting into a fight and instead concentrate on responding in a way that will help to de-escalate the situation. As a result, you can direct the negotiation and the eventual resolution.
One mediation I worked on involved a large corporation for whom the dispute was a rounding error against a gentleman for whom the dispute was substantial. Further, the corporate side was represented by in-house attorneys who could easily keep the matter going for years at a low cost while the individual was paying monthly for his attorneys. Finally, the individual came from a business where performative negotiation antics were normalized.
As you can probably imagine, the individual tried every tactic possible to exercise his performative negotiation skills - in one instance, refusing to negotiate further and storming out of the room while cursing the other side. But it didn’t get him anywhere.
When the business was sold to another party, and the new party made an attempt to mediate the dispute, he brought a very different approach. The new counsel appreciated this approach and, I suspect, resulted in the new party obtaining more value in his mediation by getting a lower price than even what the in-house counsel had authority for in the earlier session. Plus, it served to help repair the business relationship between the large corporation and the new owner’s acquisition - paving the way for future value.
V. Be Flexible Whenever You Can: Find Multiple Ways to Succeed
Why it Works
What to Watch For
Too often, being stubborn is thought of as equivalent to being a good negotiator. But such rigidity only ensures that a deal will be harder to reach at a greater expense of time or money and perhaps missed entirely. Flexibility means being open to multiple ways to succeed, not just looking for ways to give in.
One often underutilized technique is making multiple offers of relatively equal value. This technique can be used in various situations, such as when negotiating a salary or when trying to purchase a product or service.
For example, for a job offer, you could counter an initial offer from a potential employer by responding with three options: One that is 10% more pay, one that is 5% more pay and two more weeks of vacation, and one that is the same dollar amount with four more weeks of vacation leave.
This multitude of offers allows the employer to signal what they are willing to give more on (say, vacation time) and what they are willing to give less on (say, additional salary). In this example, if you were to negotiate these separately (that is, negotiate your salary first, then the amount of vacation time), then you might very well never get to start work, as the fight over the salary might have ended the negotiations or even driven so much ill will that the negotiations broke down.
Also, note that multiple offers mean you can have an extreme offer in the mix, and there is no risk of offense. That’s one more way that by making multiple offers, a negotiator can increase their chances of getting the best deal possible.
VI. Be Clear About What You Need: Get to the Point
Why it Works
What to Watch For
We all know it’s essential to get to the point, but sometimes, that can be hard to do when it means overcoming our instinct in a negotiation to keep information from the other side. Alternatively, I’ve seen some who open the floodgates and overshare.
Undersharing can be a problem because the settlement will take longer, and there might be a better settlement that could’ve been reached. If you’re in doubt, use your mediator to share information with them privately. Once the mediator knows what is important to you and what is not, the mediator can focus on getting you the best value by concentrating on what is essential for you and your client. If the mediator doesn’t know what is important to your side, they can’t guide the discussions to focus on that. Instead, the discussions will take up more of your time, the other side’s time, and the mediator’s time by discussing different things that don’t matter as much.
For example, I once mediated the split of a three-party partnership. The woman who had taken over the company’s operations kept throwing up roadblocks to prevent an agreement with the two other owners. When I pushed her about this and pressed her to give me an offer that she would commit to accepting before my taking it to the other side, she gave me an offer that I knew the other two would take. Rather than play a game of going back and gaining the acceptance of the other two, I called her out on the offer and said, “I know they will take this. When I return with that acceptance, what will you need that you forgot to mention here?”
Of course, she added one last thing: the continuing income stream from the business as it operated until it sold. She broke down when I pointed out the value involved and that the other party would ask more questions about how much was being made precisely. She told me this was more important to her than an even greater amount from the final sale price for other reasons.
Once I knew this, we could negotiate a deal that would provide her with the continuing income stream she desired and secure the best value for her on the sale price. Further, it did so without creating a risk that the size of the income stream would be discovered by the other two parties during the settlement and, thereby, risk the completion of the sale of the business.
Ask yourself, in your next mediation, if there are similar ways that you can share additional facts or information with your mediator to help them help you. Without that knowledge, the mediator can’t get you the best deal, and you might unnecessarily leave value on the table.