1. WHAT EVERY BUSINESS EXECUTIVE NEEDS TO
KNOW ABOUT DISPUTE RESOLUTION
Part II: Litigation and Negotiation
© 2009 by Ronald W. Brown

2. In the Past, Dispute Resolution Took Many Forms
And the Outcome Could Be Uncertain

3. Some Overlooked “Collateral Damage” Aspects of
Disputes
• Uncertainty is damaging to a company in many, many
ways. Depending on the size of the conflict, it could make
lenders less interested in lending, customers concerned
about the future, etc.
• It is challenging for the owner-of-a-dispute to
compartmentalize a conflict to the point that it does not
spill over into the business executive’s personal life and
their effectiveness as a leader of the business.
• Any method of dispute resolution can be misused, for
example as a delaying tactic or method of preventing
forward progress, using up resources such as time and
money. Recouping this lost opportunity cost is nearly
impossible.

4. ALTERNATIVE DISPUTE
RESOLUTION
LITIGATION
© 2009 by Ronald W. Brown

5. Two Essential Things Every Business Executive
Should Know About Litigation: #1
• ”Every legal dispute is a business problem requiring a
business solution.”
• “Instead of handing over disputes to the lawyers with a ‘you
take care of it’ attitude, managers need to take responsibility for
their disputes. They need the same negotiating skills they use
to close an acquisition or negotiate a contract to try to settle. If
a case goes to litigation, you have already lost. As Priceline
founder Jay Walker put it, it's not a matter of who wins, it's a
matter of who loses less.”
• “If the initial settlement efforts fail, the manager in charge
needs to continually reassess whether it makes sense to
continue litigation or put another offer on the table.”
Constance E. Bagley, “Using The Law To Strategic Advantage”, Harvard Business School,
Working Knowledge, December 12, 2005

6. Two Essential Things Every Business Executive
Should Know About Litigation: #2
• “Most civil litigation in federal court settles either during
pretrial discovery or right before trial ‘on the courthouse
steps.’ Settlements at the pleading stage are relatively
infrequent. Notoriously few civil cases in federal court are
tried.”
• “Particularly because most cases settle, pretrial discovery is
of critical importance. Pretrial discovery is often used to
determine the boundaries of settlement discussions.
Frequently, the amount of the settlement reflects the parties’
success or lack of it during the discovery process. “
• “If the case is one of the few cases which is tried, it is likely
that the parties’ presentations will rely heavily on evidence
they developed during discovery.”
Robert L. Haig and John P. Marshall, “Corporate Discovery Strategy In Complex Litigation”,
Law Department Management Adviser, Issue No. 217, April 1, 2001

7. Reject A Settlement Offer
and Do Better Going to Trial?
A recent ABA Journal article, “Most plaintiffs Who Reject
Settlement Offers Do Worse At Trial” found four things:
1. “The gamble of going to trial doesn’t pay off for most
plaintiffs, according to a study of more than 2,000 civil suits from
2002 to 2005.”
2. “Sixty-one percent of plaintiffs who turned down settlement
offers ended up faring worse at trial, according to a
New York Times story on the study. The average settlement offer
was $48,700 and the average award at trial was $43,000, a
difference of $5,700.”
ABA Journal Law News Now, Posted Aug 11, 2008, 06:49 am CDT, By
Debra Cassens Weiss

8. Reject A Settlement Offer and
Do Better Going to Trial?
 3. “Defendants were wrong in just 24 percent of the
cases, but for them the cost of a bad gamble was much
larger. The average plaintiff’s settlement demand in those
cases was $770,900 and the average verdict was $1.9
million, a difference of more than $1.1 million.”
 4. “Plaintiffs were more likely to make poor choices
about going to trial in contingency fee cases. On the
defense side, defendants were more likely to make poor
choices when there was no insurance coverage.”
ABA Journal Law News Now, Posted Aug 11, 2008, 06:49 am CDT, By
Debra Cassens Weiss

9. Simplified Overview: The Civil Litigation Process In
Nine Steps (with a flow diagram)
1. Plaintiff’s Summons and Complaint
2. Defendant’s Answer to the Complaint,
Affirmative Defenses, Counterclaims
3. Motions
4. Discovery (Depositions, Interrogatories,
Production of documents)

10. Simplified Overview: The Civil Litigation Process In
Nine Steps (with a flow diagram)
1. Pre-Trial Conference and Motions
2. Jury Trial or Bench Trial
3. Judgment
4. Motions After Trial and Appeals
5. Enforcement of Judgment

11. A FLOW DIAGRAM
FOR A CIVIL
LAWSUIT
Prepared by TFC-Associates.com
http://www.tfc­associates.com/suit.html

12. What Do Litigators Charge?
• A straight hourly rate can range
from three to four figures.
• There are many variations to the
straight billable hour.
• Joel A. Rose & Associates, Inc.,
Management Consultants to Law
Offices, lists 21 different creative
billing arrangements that law
offices are using as alternatives to
the straight billable hour.
(http://www.joelrose.com/articles/creative_billing_arrangements.html.)

13. “Traditional litigation is a mistake
that must be corrected…For some
disputes trials will be the only
means but for many claims trial be
adversarial contest must go the
way of ancient trial by combat…
Our system is too costly, too
painful, too destructive, too
inefficient for really civilized
people.”
Quoted in “The Reasons for Mediation’s Bright Future” by
Edna Sussman, NYSBA New York Dispute Resolution
Lawyer, Fall 2008, vol. 1, no 1. p 57
Warren E. Burger,
former Chief Justice United States Supreme
Court

14. “The notion that most people
want black-robed judges, well-
dressed lawyers, and fine
paneled courtrooms as the
setting to resolve their dispute
is not correct. People with
problems, like people with
pains, want relief, and they
want it as quickly and
inexpensively as possible.quot;
Warren E. Burger,
former Chief Justice United States
Supreme Court
http://adr.navy.mil/adr/slideshows.asp

15. Alternative Dispute Resolution
Negotiation

16. Five Memorable Thoughts About Negotiation
1. “Let us being anew,
remembering on both
sides that civility is not a
sign of weakness, that
sincerity is always
subject to proof. Let us
never negotiate out of
fear, but let us never
fear to negotiate. “
President John F. Kennedy, in an address to the United Nations
General Assembly

17. Five Memorable Thoughts About Negotiation
2. “ We cannot
negotiate with those
who say: ‘What’s
mine is mine, and
what’s yours is
negotiable.”

18. Five Memorable Thoughts About
Negotiation
• 3. “Negotiation is a process in which people learn to
accept an available compromise as a satisfactory
substitute for that which they thought they really
wanted.”
• 4. “Negotiation is the sum of all the ways in which
we convey information about what we want, what
we desire, and what we expect from other people---
as well as how we receive information about other
people’s wants, desires, and expectations.”
---George H. Ross, Esq., Executive Vice President and Senior Counsel for the
Trump Organization

19. Five Memorable Thoughts About
Negotiation
• 5. “If you can’t go around it, over it, or
through it, you had better negotiate with
it.”
---Ashleigh Brilliant

20. A Three Point Perspective: Negotiation As A Foundation For A
Successful Relationship
• 1. “To begin with, almost all negotiations have
conflicts and how the parties deal with those
conflicts can set an important precedent as to how
different types of conflicts will be dealt with in the
future. To the extent that disagreements arise,
lawyers should consider — rather than engaging in
costly e-mail wars demanding concessions based
on the insistence that quot;their way is the right wayquot; —
working to foster a method of handling the conflict
that is most likely to quickly resolve it. An example?
Identify real business issues quickly and have the
business parties discuss them in as amicable a
manner as is possible.”
ABA Section of Business Law Volume 12, Number 5 - May/June 2003 , Win the Battle or Build
a Relationship? How Japanese Style Could Help American Negotiators. By Darin Bifani

21. A Three Point Perspective: Negotiation As A Foundation
For A Successful Relationship
• 2. “Negotiating lawyers can also help strengthen the
business relationship of the parties by avoiding words and
actions that are likely to embarrass or surprise the other party
and use words and actions, which, as much as possible, put
the counterparty and the business relationship in a positive
and long-term light. Skilled negotiators typically have an
arsenal of adversarial tactics at their disposal, such as
mastery of technical minutiae, which others do not completely
understand. This can surprise the other side with
uncomfortable or unflattering data or corner less skilled
negotiators with references to sources or facts that they may
not know. “
ABA Section of Business Law Volume 12, Number 5 - May/June 2003 , Win the Battle or Build
a Relationship? How Japanese Style Could Help American Negotiators. By Darin Bifani

22. A Three Point Perspective: Negotiation As A Foundation
For A Successful Relationship
• 3. “While these tactics may win concessions on
contractual language in a crowded negotiating
room, they also can leave a lasting negative
impression in the mind of the other party. As one
lawyer once mentioned, it is often a good idea to
share potentially damaging or explosive information
with the other side before discussing it in public
because, among other reasons, the counterparty in
negotiations quot;may often be your client's client.quot;
ABA Section of Business Law Volume 12, Number 5 - May/June 2003 , Win the
Battle or Build a Relationship? How Japanese Style Could Help American
Negotiators. By Darin Bifani

23. Principles of Negotiation: Getting To Yes—
Negotiating Agreements Without Giving In
• Separate people issues/relationship issues from substantive
problem issues,
• By Focusing on interests not positions.
• Search for mutual options for mutual gains that satisfy the
parties interests (Avoid: making premature judgments;
searching for the single answer; assuming the pie is fixed in
size; thinking that solving their problem is their problem)
• Insist of using objective criteria or standards of what is
realistically fair and reasonable.
• Have a Best Alternative to a Negotiated Agreement
(“BATNA”)

24. Eleven Additional Important Points
About Negotiation
1. “It's easy to come up with a recipe for disaster
when the subject is negotiation. As in chess, once
you sit down at the table every move counts. So
many factors compete to undermine an optimal
settlement: the emotions of both participants; the
potential for misunderstanding what could be
gained (or lost); differing interpretations of what
constitutes fair play.”
---Martha Lagace, “The Art of Negotiation”, Harvard Business School Working Knowledge, May 23, 2000

25. Eleven Additional Important Points
About Negotiation
2. “The cooperative approach to negotiation postulates that all
parties must come away having gained something.”
3. “There are three things you need to know in understanding
negotiation. First, it is not a science. Second, it is not a
situation in which winning is everything. Third, it is not an
event with continuity—the parties involved, their motives,
and their goals are all different and are all subject o change
at any moment during the course of the negotiation.”
---George H. Ross, Esq., Executive Vice President and Senior Counsel for the
Trump Organization

26. Eleven Additional Important Points
About Negotiation
4. “Find common ground with the other side.”
5. “Establish a good rapport.”
6. “Be a nice person to deal with.”
7. “Find the appropriate level of communication.”
8. “Understand the other side and its needs.”
9. “Cement feelings of trust.”
10. “Learn flexibility.”
11. “Become known as a deal maker and not as a deal
breaker.”
---George H. Ross, Esq., Executive Vice President and Senior Counsel for the
Trump Organization