Thursday, June 26, 2014

The art of Small Talking

My friend and "She Negotiator", Victoria Pynchon blogged this week about women and small talk.  Essentially, she reminded me that women are sometimes superior at making idle conversation (the social grace in us!) and yet in professional settings have often tried to mask or hide this innate ability, for fear of appearing shallow.
Here is a cute little reminder from none other than Larry David that small talk can be the key to forming the cornerstones of trust, rapport and cooperation at the beginning, middle and end of a negotiation.  It is an art best practiced at dinner parties and while waiting at elevators, but is an art worth developing.  Invariably, if you work at it, you can find some common experience or interest with most everyone you meet.  A genuine curiosity about their interests will also serve you well.  After all, mediation is designed to be a way to open up communication between two sides of a dispute who have shut down.  Small steps towards creating a lifeline between the two will invariably break down the barriers built up to shield them from the discomfort of the dispute.  World Cup Soccer anyone?
What efforts do you make to engage your opposing counsel or mediator in "small talk" in order to create rapport and get beyond polarity?

Thursday, June 12, 2014

Lessons from my Father: The Value of a Hearty Handshake

With more and more mediation hearings occurring before the litigation gets fully underway, many disputants and opposing counsel have never met before the mediation hearing.  For this reason, I'm finding it increasingly vital that every mediation hearing begins with a quick "meet and greet" between the parties and a genuine handshake.  Research backs me up on this.  In a studyhandshake conducted at the Harvard Business School, subjects were asked to negotiate a mock purchase and sale of a piece of real estate.  The control group was requested to begin with a handshake.  The other group were seated across the table from one another and most of them entered into an immediate negotiation without bothering to shake hands beforehand.  Surprisingly, the results for the two groups were different.  After a handshake, both buyers and sellers tended to be "less misleading" according to the study, and both sides reported arriving at a deal that seemed fair and evenly distributed, in contrast to the other group, who reported that the deal was less fair and imbalanced in many instances.
My father was a successful business man for over 30 years.  For him, "his word was his bond" and he would routinely buy merchandise for resale in a face-to-face negotiation which began and ended with a genuine handshake.  Last week, I conducted a pre-litigation mediation.  The defense counsel had flown in from Northern California and had never met the (very compelling) Plaintiff nor her (very well prepared) Counsel.  All interaction up to that point had occurred via email.  There were no depositions and no court appearances to rely upon.  We began with a sincere meet and greet and it really did set the tone for a successful, deliberate, polite and reasonable negotiation for the balance of the day.  (Of course, unlike my father, the ultimate settlement was reduced to a writing signed by all parties at the conclusion).
Even in cases in which the parties or the mediator decides to dispense with an initial joint session, this little gesture of a meet and greet and some human interaction, even touch, may go a long way towards getting even the most contentious matters resolved civilly and efficiently.  Do you insist upon an initial handshake amongst disputants and counsel?

Wednesday, June 11, 2014

Ethics and Legal Bargaining: When the Pre-Mediation Goes Up at the outset

It has happened to me twice in the past two weeks.  The Plaintiff's lawyer has sent a demand letter asking for settlement in a certain amount without the authorization of her client.  The response to the demand letter was a willingness to attend a mediation, which is then scheduled for 1-2 months after the demand was communicated.  Then when they arrive at mediation, the demand doubles or triples--simply so that they can get back to an ultimate settlement at very near that original demand.
While it may be a breach of ethics to make a demand to settle a case without specifically gaining the client's authority, the other challenge is that it creates  some awkward moments as the negotiation begins by going backwards, not forwards at the start of the mediation hearing for both client, mediator and the other side of the dispute.  For a mediator, it is a minefield when this discrepancy or intention is discovered for the first time in an initial session with Plaintiff and his counsel.  Where it occurs, I have had concerns about a breach of fiduciary duty to the client and may first discuss the issue privately with the Attorney and then, if they insist upon opening with a demand that is higher than their pre-mediation demand, unless there are new facts or circumstances, I will ask them to articulate the basis for that move directly to opposing counsel.
In both instances, simply walking gently down the path of understanding why the attorney made the initial demand and why the client insists upon starting at a higher demand may be all it takes to untangle the mess and advance the negotiation instead of jump backwards and head towards an impasse.  One of the best ways to avoid this is to question the lawyers before the mediation hearing as to any pre-mediation settlement dialogues and whether anything has changed to cause them to re-evaluate those numbers as a starting place.  They will likely reveal their issues during that pre-mediation conference call and allow you to break through this ethical minefield with all parties and their counsel in tact.
What do you do when there is this apparent reversal or re-appraisal at the mediation hearing?

Thursday, June 5, 2014

Foreign Exchange: When Eastern Yuan meet Western Dollars

This week I mediated an interesting dispute between a Chinese employer and it's former employee, who was an American citizen working in America for the Company at the time of the termination of his contract.  It was interesting to learn that apparently the remedy in China for the wrongful termination of an employment agreement is a maximum of eight weeks of earnings.  Here, the remedy may include actual lost earnings (back pay), front pay for some reasonable period of time (the reasonable amount of time estimated it will take to find alternative equivalent employment), emotional distress and attorneys fees.  In California, this often results in even higher settlements when issues surrounding wage and hours are factored in.  In this case, it amounted to a (confidential) six figure settlement.  But that is where the real cross-cultural challenge began, not ended.
As a student of International Relations in the 1970's, there simply was no discussion about concepts like "money laundering" and business ventures with the New Republic of China.  At that time, China was a Communist country which was not open to conducting business with U.S. citizens.  As I recall, it was not yet open to American tourists either.  So it was some surprise to learn that the Chinese employer here considered the problem of transferring hundreds of thousands of Chinese Yuan to America in a lump sum completely daunting.  In all likelihood, he believed it would be held up by the Chinese government and may take many months and great efforts to get the money out of the Country.  On the other hand, there was so much distrust between the parties that neither one were comfortable with a protracted payment plan which could be in the maximum of $10,000.00 USD increments. That seemed to be the magic number which could fly under the radar of the government and not be flagged for scrutiny or held up upon transfer.
Ultimately, the creative and cooperative lawyers, once they arrived at a deal on the settlement of the case, agreed to using a Chinese escrow.  Defendant will put all of the money into an account, and the escrow will be charged with sending the funds over a period of months until fully paid directly to the Plaintiff's lawyer.   The use of a trustworthy neutral third party is, of course in my view, brilliant!
I offer this as a lesson in cross-cultural negotiation in an arena that I have never had to delve into before.  What creative ways have you developed to move money from one currency and country to another safely and legally?