Abby Tolchinsky and Ellie Wertheim ()
Whether your client is already deep into a mediation process or whether mediation is merely on the menu of process options to resolve a pending dispute, what follows are several concepts to help provide clients effective guidance. These considerations apply across the board regardless of whether you’re working in the context of a multinational company or a family business; an elder care conflict or a disgruntled or disgraced corporate executive. Though the structure of the mediation will be tailored to the particular context, but these tips address the universal:
You Don’t Have to Win Every Point. As mediators, we observe the dynamic of the parties in order to learn their communication patterns. The mediator’s role is to assist in breaking the conflict dynamic, in the hopes of prompting more effective and productive negotiations. Often we see that parties are “stuck” in a version of the fight they’ve likely been having for years. Each pushes the other’s buttons, perhaps even unwittingly. Indeed, often parties are entrenched in roles and characterizations that make the slightest shift in behavior and perception seem impossible—so much so that a compromise accommodating significant interests may be overlooked or even rejected. In the initial meeting with clients, we may inquire whether they think they can agree—in other words, whether any offer, even a good one, will be met reflexively with skepticism and mistrust.
In the corporate setting, decades of rivalry and competition—perhaps with even corporate espionage mixed in—and with stock prices at stake, the ingrained competitive patterns can make it difficult to move beyond a negotiation impasse. For example, in the smartphone wars, Apple wishes to cede no ground to Samsung as they have not been able to resolve patent violation disputes regarding technological advances. While we are not privy to the confidential negotiations, perhaps the duration and energy of the fight between the companies was simply too much to overcome in a mediation setting.
Try to Anticipate the Unknown Future. Yes, contracts are built to last. But their chance of standing the test of time is greatly increased if, throughout the negotiations, parties take into account both predictable shifts and those that are less easily accounted. Ideally, there should be a measure of flexibility and room to grow. In the family law context, for example, parents of young children may find it too challenging to conceptualize how their children’s needs will change or to agree to parenting terms that remain constant through adolescence and beyond. Therefore, the mediator, rather than avoiding this challenge, should flag the issue and help the parties develop a plan.
These plans may run the gamut from simply agreeing to return to mediation as needed to consulting with a parenting expert or setting in place a detailed schedule for re-evaluating parenting plans and financial support. Of course, the changes that come over time are addressed most effectively when both parties share the value that their children’s relationship with each parent is of primary importance. Then, their interests are aligned.
In the business world, synergy can crumble and terms of a contract may need to be renegotiated or voided should market conditions shift. Mediators, hoping to avoid litigation between the parties down the road, need to raise the “what if” scenarios to consider up front. A stark example from recent news: Years ago, Kraft and Starbucks contracted for Kraft to distribute Starbucks coffee to supermarkets. Starbucks sought to buy its way out of the contract as the coffee pod business grew and it found itself bound by a contract that limited it to selling its coffee in a pod size that only fit the Kraft-made machines.
Starbucks was losing a significant share of its potential market and therefore unilaterally terminated the contract. Had the parties anticipated the potential for new technology, for coffee brewing machines to take on a different form, for market shifts, they may have drafted clauses defining each one’s financial obligations and ability to modify terms. Contract negotiations call for nimble terms and reality testing how agreements may hold up over time.
Demonstrate Your Motivation to Reach a Deal. Mediation is no small effort. That said, our experience as mediators informs our perspective that the number one predictor of whether parties will reach a full and final mediated settlement is the parties’ motivation to resolve the conflict out of court. How can parties best translate that motivation into a productive session and ultimately a compromise? It requires exceptional listening skills; an ability to evaluate significant amounts of information, financial and otherwise; and the vision to determine where the parties’ needs intersect. It entails an ability to remain open and flexible while simultaneously knowing one’s bottom line. All of this requires determination, hard work and prioritizing getting through the negotiations.
Just last summer, JP Morgan was facing potential criminal and civil charges related to the sales of mortgage-backed securities. Jamie Dimon, the CEO, demonstrated he was determined to protect JP Morgan. Dimon personally took the lead, negotiating directly with the Justice Department, thus exhibiting a genuine commitment to making a deal.
Problem Solve Creatively. In mediation, parties can become deeply wedded to a specific result, such as continuing to live in the marital residence post-divorce. Perhaps the home offers stability in a time of flux or symbolizes financial security. But what if the other party wants or needs their share of the equity in the home in the near future? Any seasoned divorce mediator finds couples discussing this issue on a regular basis, and the resulting settlements can be quite creative. Another valuable asset may be traded, the home may be rented out, and a move within the neighborhood may satisfy the need to stay in the school district, to name just a few.
Just recently, the National Hockey League found itself in a league lockout, with months of cancelled games, lost revenue and a damaged public perception. In mediation, players were asked to concede a significant percentage of the income they had been earning from hockey-related revenue. Athletes, at constant risk of serious injury and with short-lived professional careers, did not want to give up income; their stated goal was clear: financial security.
A creative compromise solution—one that redirected the parties away from a seemingly zero sum game standoff—was to provide expanded pension earnings, among other settlement terms. In conceding short-term earnings, the players said yes to long-term financial security. The season was salvaged—because both sides pulled back and considered more creative options.
Beware the Scorched Earth. Time and again we have observed what initially appears to be a power imbalance, with one party seeking to impose terms without real input from the other. Or, even more forceful, there may be “take it or leave it” discussions with an explicit threat of litigation as the alternative. These dynamics often preclude successful mediations unless they loosen up significantly so that both parties can consider what will and what won’t work for them. And in court, judges do not tend to look kindly upon parties who freeze bank accounts or interfere with a parent-child relationship. In using these tactics, parties are generally not taking into account some of the strategies we outlined above. They may be vested in winning rather than mindful of long-term risks of a backlash. They certainly are not showing a motivation to settle and make a deal that works for everyone. And they are not looking to preserve an ability to work together into the future.
A recent example of this in the corporate world was Time Warner’s blackout of CBS programming to their cable customers. If you tried to watch The Good Wife last year, you will remember the anger and frustration from Time Warner’s unilateral move. This hardball strategy backfired in the “court of public opinion,” leaving Time Warner with a livid customer base and no choice but to back down, particularly as football season was about to begin. Short-sighted negotiation moves are often all or nothing propositions and therefore antithetical to the compromise positions needed to resolve conflict in mediation. By definition, they are high risk and more appropriate to high-conflict litigations.
Abby Tolchinsky and Ellie Wertheim are partners at Family Mediation.