One of my favorite books about negotiation is Getting To Yes by Roger Fisher and William Ury. As the book jacket suggests, it really is “for everyone who has ever worried about what to do in a disagreement or dispute.”

Since I suspect that the majority–if not the vast majority–of negotiations are between parties of unequal bargaining power, I thought it might be interesting to dip into the book and see what Fisher and Ury recommend one do when he/she/it is negotiating against a more powerful opponent. One of the tools the authors advocate in this situation is for a negotiating party to formulate a Best Alternative To A Negotiated Agreement (BATNA). Just by knowing their BATNA a party becomes empowered in any negotiation.

The easiest way to get a feel for what the authors are talking about is by using their example:

“Consider a wealthy tourist who wants to buy a small brass pot for a modest price from a vendor at the Bombay railroad station. The vendor may be poor, but he is likely to know the market. If he does not sell the pot to this tourist, he can sell it to another. From his experience he can estimate when and for how much he could sell it to someone else. The tourist may be wealthy and ‘powerful,’ but in this negotiation he will be weak indeed unless he knows approximately how much it would cost and how difficult it would be to find a comparable pot elsewhere. He is almost certain either to miss his chance to buy such a pot or to pay too high a price. The tourist’s wealth in no way strengthens his negotiating power. If apparent, it weakens his ability to buy the pot at a low price. In order to convert that wealth into negotiating power, the tourist would have to apply it to learn about the price at which he could buy an equally or more attractive brass pot somewhere else.” (Id. at 107.)

Since I’ve visited the Bombay railroad station–it’s actually called the Victoria Terminus–this was an easy bargaining situation to picture. The authors just left out the part about the cows wandering along the platform. In any event, as they point out, “the relative negotiating power of two parties depends primarily upon how attractive to each is the option of not reaching agreement.” (Id. at 106.) If you can have a very attractive BATNA, your chips have greater value.

How do you strengthen your BATNA? The authors suggest this “requires three distinct operations: (1) inventing a list of actions you might conceivably take if no agreement is reached; (2) improving some of the more promising ideas and converting them into practical options; and (3) selecting, tentatively, the one option that seems best.” (Id. at 108.)

If we transition this discussion into a familiar setting, the pre-suit mediation of a hypothetical employment dispute, it may become easier to see how the whole BATNA thing might play an important role. Consider, for example, a single plaintiff who has a claim against her employer for gender discrimination. The parties engage in a mediation to see if the case can be resolved before she actually files a lawsuit. The individual employee might be anxious going into the mediation, since her employer is a large corporation with sophisticated lawyers at its disposal (at least they look sophisticated) and both she and her lawyer know it will cost a lot and be an uphill battle to pursue the case if the corporation is not inclined to settle. This sounds like an unequal bargaining position, doesn’t it? If they go in “cold” as it were, hinging their hopes on the corporation’s generosity, they’re likely to get steamrolled into agreeing to a settlement far below full value.

What can they do to enhance their BATNA and take away some of the corporate defendant’s power? Let’s apply the 3 step approach from Getting To Yes. First, the plaintiff and her lawyer “invent a list of actions” they might take if the dispute doesn’t resolve at mediation.  Here are some I invented for them:

• Go ahead and file a lawsuit and serve aggressive discovery. (True, it’s not very original.)
• Explore pursuing a class action instead of a single plaintiff case.
• Aggressively investigate whether there are quality witnesses who will support plaintiff’s case.
• Propose a second mediation session after the plaintiff has completed some (hopefully damaging) discovery.
• Associate additional reputable counsel to help level the playing field.
• Explore forum shopping options. Perhaps the corporation expects a lawsuit would be subject to mandatory arbitration, but the facts or current state of the law weakens the assumption that arbitration will be a suitable forum?

Step 2: “improving some of the more promising ideas and converting them into practical options.” I like the idea of a class action as a practical alternative option to a single plaintiff case. This is bound to put pressure on the corporation, as a class action carries both greater risk and greater expense. How to “improve” this idea? Do some investigation. Talk to plaintiff’s female colleagues. Even if their cases would not be particularly strong if pursued individually, they might have a chance in a class action situation.

Step 3: selecting which option seems best. Let’s assume there is some chance the plaintiff and her lawyer could organize and successfully pursue a class action (but would still prefer to settle her single plaintiff case at mediation), the question becomes whether to share your option with the opponent during the bargaining process. The authors say this:

“The desirability of disclosing your BATNA to the other side depends upon your assessment of the other side’s thinking. If your BATNA is extremely attractive–if you have another customer waiting in the next room–it is in your interest to let the other side know. . . However if your best alternative to a negotiated agreement is worse for you than they think, disclosing it will weaken rather than strengthen your hand.” (Id. at 109.)

Here you will need to make an honest assessment. Is the notion of converting the plaintiff’s case into a class action really just pie-in-the-sky? The corporation’s lawyers are naturally going to wonder, if the plaintiff reveals her class action alternative, why her lawyer isn’t pursuing that in the first place if there’s really a viable class. The corporation, knowing class certification can be a challenge which, if lost, tends to shake out meritless individual claims, might not be particularly cowed by the prospective of a weak class action.

On balance, I would probably not reveal this BATNA to the opposition, even if the plaintiff and her lawyer believe a class action is a viable alternative. What’s important is the actual balance of power, not just the corporation’s perception of the balance of power. Going into the mediation with the knowledge that she has a decent BATNA should give the plaintiff and her lawyer the resolve not to cave too easily.

So much in our lives, both professional and personal, lies outside our control. Focusing on the professional, most lawyers will never be fortunate enough to be able to limit our practice to only perfect clients who march into our office carrying a perfect set of facts which, when presented to a judge and jury, are virtually guaranteed to yield an excellent outcome.

A less pessimistic view is to recognize that what makes our practice so interesting and challenging (on those occasions when it is interesting and challenging) is the fact that we are forced to take a set of imperfect facts, involving a group of imperfect actors, and turn water into wine, capitalize on the positive, downplay the negative and procure the very best result for our clients. Sometimes this means pulling a rabbit out of a hat.

Given that so much is beyond our control, it would seem to me to make all the sense in the world, at least professionally, to take steps wherever we can, flex our muscles, to influence an outcome to the greatest extent possible. In the interest of progressing beyond the general to the particular, I’m referring once again to the issue of preparation.

This time, though, my focus is on preparation for settlement discussions. I’m thinking specifically about a recent settlement conference I attended in an employment discrimination case. The case was nearing trial and this settlement conference was the parties’ one last chance to talk turkey. Because this case was pending in federal district court, there had been a pretty decent interval of time, a few months, between completion of discovery and the settlement conference (in state court, by contrast, at least in California, the parties may not complete discovery until a month or less before trial). I made the assumption that because I was immersed waist-deep in writing motions in limine and formulating trial strategy, that my opponent–an older, more seasoned lawyer–was surely equally immersed and conversant in the facts and theories of the case.

Eh . . . Not so much. While we were sequestered during the first part of the conference, the judge ultimately decided to bring all the lawyers together because he figured we might make more progress debating the merits mano a mano. It then became abundantly clear that my opponent didn’t know his case. (In hindsight, I might have been tipped off to this by the fact that he had just days before served 17 motions in limine, several of which had nothing to do–literally nothing at all to do–with the facts of our case.) Worse, not only did he not know his case, he was haughty, bombastic and steadfastly indignant about the absolute, unquestionably unquestionable merit of his client’s discrimination claims, only he had no evidentiary basis to back them up. It was kind of ridiculous, really.*

What kind of message does it send for a lawyer to be out of touch with the key facts of his client’s case so close to trial? I can tell you what kind of message it doesn’t send. It doesn’t inspire fear or grave concern. It doesn’t, and didn’t, make us rush to write a check. The case did ultimately settle, but it was a “cost of defense” settlement in the purest sense. Actually, it was a-little-less-than-half-the-cost-of-defense settlement. In other words, great outcome for my client, not such a good outcome for my opponent.

In fairness, the plaintiff didn’t have a kick ass case to start with. In fact her case sucked. And we knew it. So this story might not be the most potent example of how preparation can make a difference in settlement negotiations. But it is a cautionary tale, because counsel was so out of touch with the facts that, even if his client had had a really good case, we still wouldn’t have paid much. His lack of preparedness made his client’s case weak, regardless of the facts or evidence.

*For example: the plaintiff’s employment was governed by a collective bargaining agreement. This was no secret. The agreement had been produced and referenced repeatedly in discovery, and the fact that plaintiff’s employment was so governed constituted a major component of our defense. When given his turn during the joint session of the settlement conference to articulate his client’s position, however, almost the first words out of my opponent’s mouth was a suggestion that “this was the first he’d ever heard” about any collective bargaining agreement. Just ridiculous.