Dear Pinky and Spike:
Well! You’re both back in Santa Barbara, you’ve been reading the saga of Ralph and Rebecca Robinson, and you want to know how to prevent what happened to Ralph from happening to you.
First, I must memorialize the fact that, after 54 letters, you are finally asking me for advice. Unfortunately, my answer to your first question is: not much.
Let’s re-imagine the situation from Ralph’s position. His lawyers tell him there is a 90 percent probability that he will successfully defend against Rebecca’s claim for $75,000 (which is half of the support Ralph paid to his first wife during their marriage).
Ralph’s lawyers feel confident of victory because they have found a statute in Ralph’s favor that trumps the appellate decision that Eunice Heep cites as authority for Rebecca’s claim. At the settlement conference, Heep emphatically and insistently argues that the case she cites trumps the statute, and she says that she can predict Rebecca’s victory with 90 percent certainty.
In this particular instance, Heep is sincere, but Ralph’s lawyers are correct when they tell him that Heep is such a shameless bluff that she’ll knowingly mislead the court on a point of law. If caught and chastised she reacts as though she’s playing a game and has finally been caught for infractions she’s committed several times before the referee notices. There is no way to tell if she believes what she’s saying, so that should be left as an unknown.
Assume that Ralph is anxious to settle. On what information can he base a compromise? His lawyers tell him he has a 10 percent chance of a loss, so he could offer Rebecca 10 percent of $75,000.
Rebecca’s lawyer tells her there is a 90 percent chance of victory, so she might discount her claim by 10 percent. So Ralph has gone up from zero to $7,500. Rebecca came down from $75,000 to $67,500. I can think of only two ways to bridge that $60,000 gap:
» At the settlement conference the settlement facilitator could ask the lawyers to seriously consider representing their clients, on this single issue, on a contingency basis — and they should encourage their clients to agree to that kind of arrangement if their attorneys are adventurous enough to offer it. After all, when a lawyer works on a contingency, they have a strong enough belief in their case to put their own money at risk.
If Heep prevails she gets 33 percent of the $75,000 for $25,000. If Ralph’s defense holds up, he would be required to pay his lawyers $25,000. A further condition would be that, in the unlikely event of a settlement, Ralph would pay the lawyers’ share immediately. If the lawyers don’t want to take on the risk of the contingency, they will come up with lots of reasons why. Their clients should appreciate the tension between a strong prediction of success and a refusal to make fees contingent on that predicted success.
» In the unlikely event the lawyers and their clients agreed to such an arrangement, they would know that, while they would get $25,000 for winning, they would get a third of one half if they settled in the middle. That would be an immediate check for $12,487 without taking a risk and without doing any more work. Whether this would cause a re-evaluation of the case would depend on how badly they needed the money.
The first approach would give the parties a chance to see the case from the perspective of the other by using the lawyers as corrective lenses. This is done by having the lawyers each argue — in front of both parties — the other side of the case.
When you hear your own lawyer make a persuasive argument for the other side, you can’t help but reconsider the evaluation. In addition to your lawyer’s abstract prediction, you have your own direct observation of what a judge is likely to hear. You can then put yourself in the judge’s position — what would you decide? If the decision is not necessarily in your own favor, the prediction should be tempered by your own direct experience. If you thought both lawyers were equally persuasive when arguing the other’s case, you might change the prediction for a positive outcome from 90 percent to 50 percent.
For this to have any chance of working, the lawyers have to be willing to put their best effort into arguing the “wrong” side of the case — and both clients must have the same reaction and radically devalue their cases in the same way.
One would think that the lawyers would attempt to make weak arguments for the other side, but that’s not what happens. They wisely fear that both parties might perceive their weak argument as weak advocacy by a weak advocate. No lawyer can stand taking the risk of being seen as a weakling.
Furthermore, lawyers are told a thousand times in law school that they are being trained to “think like a lawyer” and to be able to argue both sides of a case. This may be the only time in their career when they actually get to do it.
. . .
Recall how Ralph left his lawyers’ office by writing $37,500 on a flip chart and then flipping a coin. The number is equal to half of Rebecca’s claim. After the judge denied the claim, she ordered Ralph to pay $37,500 in attorney’s fees. By flipping the coin Ralph was probably telling his lawyers that they didn’t win anything. The result was the same as compromising at 50 percent of Rebecca’s claim. The only difference the trial made was that Ralph pays $37,500 to Heep and a similar amount to his own lawyer, so both parties suffer a complete loss! Rebecca gets nothing and Ralph pays approximately the full amount of her claim against him but not to Rebecca.
. . .
While the Robinson case was highly resistant to settlement, it’s not unusual for both lawyers to tell their clients that a case, or an issue within a case, is a toss-up. When mediating, they will tell me, in confidence, the same thing. When presented with this situation, I explain to the parties and to the lawyers that there are certain identifiable conditions in which the best way to resolve an issue is by chance, and this may be one of them.
If the decision by the court can’t be predicted with confidence and a sizable investment in attorneys’ fees will be required to obtain the unpredictable outcome, why not get the outcome without paying the fees? Moreover, if the lawyers can’t predict what a judge is going to do, how can there be a right or wrong? There is only lucky and unlucky dressed up in expensive costumes to impersonate right and wrong. Instead of participating in the delusion, why not decide your differences by chance. They might ask, “What do you have in mind?”
You should come up with your own method, but some examples are: tossing a coin, drawing cards, flipping cards, tossing dice, drawing straws or, my favorite, the best of three rounds of rock-paper-scissors.
No one has ever done it. I mean no one, as far as I know, has ever done any of them. I don’t understand why, and I’d appreciate any opinions from readers explaining why this happens, or, more accurately, doesn’t happen. In the next letter I’ll share and discuss any answers I get (or think of myself), and then I’ll start to describe and explain some interventions that can break an apparent deadlock.