Improve Your Negotiations With The 5 Golden Rules.   LEARN THEM

A friend recently expressed a great deal of frustration to me, saying he had already spent thousands of dollars on legal fees in a messy divorce with no end in sight. Given that few civil litigation cases go to trial — the vast majority end in negotiated settlements — he asked how he could speed up the negotiation process.

“Try mediation,” I suggested.

Mediation is a process where the negotiating parties hire an independent third party to help them communicate and negotiate. In effect, they hire an expert to help them more efficiently and effectively try to reach agreement. Importantly, though, the mediator has no decision-making power. He or she can only persuade, not decide.

In legal disputes, mediation is increasingly used in many contexts, since the sooner the parties resolve the dispute, the more they save in legal fees. But mediation also can be effectively used in business negotiations and other disputes as well.

Specifically, mediation can be particularly effective in helping resolve disputes where the parties have reached an impasse and/or those involving high emotions and potential future relationships between the parties. This may include disputes between family members, partners, neighbors, business colleagues and even with customers.

Instances where mediation can be especially helpful include situations where:

• The parties have an especially difficult time effectively communicating with each other;

• The parties have different perceptions about and disagree as to the issues or facts involved;

• Numerous parties are involved and all of them find it in their interests to hire someone to independently control and manage the complex negotiation process;
• The parties cannot agree on when, where or under what circumstances to meet (they cannot agree on important agenda issues); or

• One or both parties appear to have unrealistic expectations as to how the dispute may ultimately be resolved.

Of course, most negotiations do not and should not involve a mediator, and the parties can and should directly negotiate a resolution with each other. But if the parties reach an impasse or the process degenerates and becomes too overtly adversarial or emotional, mediation can be a very effective process.

The advantages of mediation in these instances include the following, many of which were originally described in Howard Raiffa’s classic “The Art and Science of Negotiation: How to Resolve Conflicts and Get the Best Out of Bargaining”:

• Providing a face-saving way for the parties to sit down in the first place;

• Establishing the appropriate environment in which to negotiate;

• Helping parties to skillfully navigate through difficult and highly emotional issues by bringing an independent and relatively detached perspective to bear;

• Efficiently helping parties explore their fundamental values and interests and how they define a successful result;

• Helping determine where the parties have shared, compatible and conflicting interests and selectively, where useful, sharing such information with the other party or parties;

• Systematically exploring mutually beneficial solutions and ways to “expand the pie” by focusing on the parties’ interests;

• Providing an independent, realistic, and possibly expert assessment of the parties’ needs and alternatives (their leverage) and assisting the parties in determining when to hold and when to fold; and

• Managing the offer-concession dynamic in a way that may reduce the role of the parties’ egos and increase the parties’ chances of reaching agreement.

We also should not overlook the disadvantages of mediation, which include a lesser ability to control the agenda and some costs in terms of time and money. But in the instances described above, there usually is little downside to engaging a skilled mediator if the parties still believe that resolving the dispute among themselves will likely be preferable to their alternatives. My friend’s future ex-wife, unfortunately, has not yet agreed to mediation. However, I continue to be hopeful. Right now, neither my friend nor his future ex-wife are splitting their assets. Instead, their lawyers are getting them.

Published April 2, 2004 The Business Journal

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