Legal Negotiation in Practice
A. Scope
Legal negotiation, perhaps more than any other activity, has a claim to be the core legal role. It arises both in the context of transactions (non-contentious proceedings) and in disputes (contentious proceedings).34 The form of legal negotiation differs considerably according to context.
In litigation the terms of settlement of an action are agreed by negotiation. In commercial matters, agreements, from the sale of goods30 DJ Luban, ‘Milgram Revisited’ (1998) 9 Researching Law: An American Bar Foundation Update 1, at 4.
31 Fisher, Ury and Patton, Getting to Yes (n 14).
32.See generally RA Johnson, Negotiation Basics: Concepts, Skills and Exercises (London and New Delhi, Sage Publications, 1993) at 77 and Condlin (n 20).
33 C Provis, ‘Ethics, Deception and Labor Negotiation’ (2000) 28 Journal of Business Ethics 145; W Ross and J La Croix, ‘Multiple Meanings of Trust in Negotiation Theory and Research: A Literature Review and Integrative Model’ (1996) 7 The International Journal of Conflict Management 314.
34 See generally Gifford, Legal Negotiation (n 11) at 38-42; MA Eisenburg, ‘Private Ordering Through Negotiation: Dispute Settlement and Rulemaking’ (1976) 89 Harvard Law Review 637. to company transfer, are agreed through negotiation. In conveyancing, lawyers must agree dates for exchange of contracts or completion of the transaction.
Negotiation may be conducted by a range of communication methods, both verbal and written. A matter may be settled by a single telephone call, follow intermittent exchanges or uninterrupted discussions lasting several days. It may be based on a standard contract or follow years of formal and informal information exchange. The agreement may be bounded by well-established conventions or be completely novel.
B.
FormalityNegotiation often results in a binding agreement. The outcomes of some negotiations are endorsed by third parties. For example, settlement of a dispute that has reached trial may be formally approved by the judge. Other agreements, such as those affecting parties suffering from lack of capacity, may also need some formal approval. Some negotiated settlements may not be formally recorded, but merely recorded by a lawyer in a file note. Nevertheless, as with other contracts, a verbal agreement is enforceable, subject to proof of terms, intention and other formal requirements.
C. Process
i. Choice of Method
Research presents practical legal negotiation across jurisdictions as a prosaic, routine activity.[2934] In the UK, this is so for both solicitors and barristers.[2935] It is often bargaining on the telephone, using a positional process and at fairly ‘low intensity’, particularly in low value matters. Initial attempts may lead to re-evaluation and later attempts to settle. High value matters receive more intense and focused attention. Some commercial matters, for example, need to be concluded to a schedule. They can involve negotiating teams, with different personnel responsible for different parts of the deal.
Gifford reasons that many lawyers entering a negotiation first try a competitive approach. If this is unsuccessful, they consider using either a co-operative or integrative approach.[2936] The chosen strategy is adapted in response to the other side. Many accounts of legal negotiation suggest that it often take the form of co-operative positional bargaining.
Very few research studies have found evidence that lawyers make much use of problem-solving approaches to negotiation, such as principled negotiation.[2937] Heumann and Hyman, for example, found that US litigation lawyers used positional bargaining in 71 per cent of cases and a ‘problem-solving’ approach in only 16 per cent of cases. In fact, many studies suggest that co-operative positional bargaining is normal in legal negotiations, even at the Bar.[2938]
ii.
Possible Factors in Choice of MethodA number of factors may encourage the use of positional bargaining in legal work. For example, the use of standard form contracts reduces the scope of negotiation and may encourage positional bargaining. Use of positional bargaining may also be due to cultural factors. Practitioners frequently describe a process akin to a ‘market place’ haggle as a recognised way of transacting business.
a. Negotiator Competence
Lack of negotiator competence or highly complex cases produce incentives to simplify strategy. An example of this is a practitioner account of a negotiation he conducted as a novice. His supervising partner instructed him that nothing in the client’s standard form agreement could be changed. He concluded a deal on the terms of the agreement, although he understood hardly any of its contents, by responding ‘it’s not negotiable’ to every proposal by the other side.[2939] Gifford suggests that claiming lack of authority to increase an offer is a tactic used by insurance companies.[2940]
b. Client Engagement
Another reason behind the use of simple negotiation strategies is the limited potential for client engagement. In some circumstances, clients’ aspirations are obvious and opportunities for exploring them limited.[2941] In other situations, involving clients in settlement discussions would be disproportionately expensive. Clients may not want to be involved in the settlement process. An employment and pensions practitioner explained that his instructions were limited to maintaining certain positions. He represented the attitude of his corporate clients as ‘This is what we want—get on and do it’. He suggested that ‘If you kept calling up saying “this is where we are, what do you think?” they’d soon get fed up’.[2942]
c. Profitability
One of the explanations of co-operative bargaining among lawyers is the desire to reach settlement. This may be good for business or it may be seen as a proportionate response to low level or problematic legal cases.
The concern is that lawyers may not do the best possible for clients for these reasons. Life is easier and they still get paid for less than diligent performance. Clients who are unable to judge performance, personal plight ‘one-shotters’, for example, are not in a position to complain. There are, therefore, particular reasons for concern when lawyers have incentives for inadequate efforts on behalf of clients.d. Professional Relationships
A co-operative orientation to negotiation in legal practice may be encouraged where there are continuing relationships between professional ‘repeat players’. Repeat interactions may lead to the development of strong professional relationships. These relationships are sometimes valued more than the duty of loyalty to clients. Therefore, in criminal cases in the US, defence lawyers recommended plea bargains for reasons that were in the lawyer’s interests, not the client’s.44 These included reducing the workload and protecting their relationship with prosecutors. In personal injury settlement negotiations, also in the US, plaintiff lawyers prioritised relationships with insurance company representatives over those with their clients.45
e. Inequality of Arms
There is some support for the proposition that a situation of unequal resources between the parties may justify the weaker side using tactics that would otherwise be deemed unfair or unethical.46 The argument tends to be found in literature from the US and is not a widely accepted.
IV.