Perhaps the single least recognized, most effective\u00a0strategy for\u00a0managing streams of commercial disputes is early intervention.\u00a0 The bundle of skills implicated by this strategy include Planned Early Negotiation, Early Case Assessment, Risk Analysis, and Decision Tree Analysis.\u00a0 But the objective of all of these tools is the same:\u00a0 To place the decision-maker within the client in a position to make an informed choice on how the matter will proceed, driven by business — not legal —\u00a0objectives.<\/p>\n
The ABA Dispute Resolution Section recently hosted a Task Force on Planned Early Negotiation, chaired by Prof. John Lande.\u00a0 More recently, the Dispute Resolution Committee of the ABA Business Law Section offered a trenchant panel of experts on the topic, headed by Duff & Phelps’ John Levitske.\u00a0 Much wisdom was offered.<\/p>\n
Kathy Bryan, President of CPR Institute and former head of litigation for Motorola, conceded at the outset that it was easier for in-house counsel to perform an Early Case Assessment than for outside counsel to do so.\u00a0 At the very opening of her remarks she reminded us that business, not legal, interests fuel the management and inform the outcome\u00a0of business disputes — a theme to which many spoeakers reverted over the course of the discussion.\u00a0 Because the dispute itself is not profitable to the company, but rather the outcome of the dispute, then reducing transaction costs, defining the risk of unknowns, and reaching an early and valuable outcome are of premium importance to business dispute managers.\u00a0 She cited abundant evidence that early outcomes not only are cheaper than later ones, but produce better commercial outcomes.<\/p>\n
Bryan offered a ten-step process by way of a template of managers:<\/p>\n
1.\u00a0 Gather information<\/p>\n
2.\u00a0 Review the facts giving rise to the dispute<\/p>\n
3.\u00a0 Raise the business interests immediately and define a successful outcome in business terms<\/p>\n
4.\u00a0 Perform the same analysis from the counterparty’s perspective<\/p>\n
5.\u00a0 Perform risk management and decision tree analysis<\/p>\n
6.\u00a0 Perform a legal analysis<\/p>\n
7.\u00a0 Determine the cost\/benefit of best, worst and likely outcomes<\/p>\n
8.\u00a0 Set a settlement value<\/p>\n
9.\u00a0 Create a preliminary litigation plan<\/p>\n
10.\u00a0 Devise a mechanism for feedback and modification of the analysis over time<\/p><\/blockquote>\n
Ben Picker reluctantly offered that, based on his years of experience helping parties settle lawsuits, litigators prefer a later closure and clients prefer an earlier one.\u00a0 Business relationships are continually negotiated, so clients are not unfamiliar with the process of negotiating problems or conflicts.\u00a0 The dispute is “owned” by the business person at first, and slowly gets taken over by the lawyer; the result is that\u00a0business\u00a0objectives often get more and more remote.\u00a0 As time passes positions become fixed, resources get invested, and the effects of cognitive dissonace become more pronounced, with parties and counsel increasingly unwilling — even unable — to entertain data that is inconsistent with their (by this time well-formed) opinions and conclusions.<\/p>\n
Jim McGuire gave a stirring talk on his decision to develop a practice as settlement counsel.\u00a0 He said he just stopped litigating and spent two years or so studying why, how and when disputes settled, in the hope of being the best at settling them.\u00a0 And, by cracky, he is.\u00a0 His materials distributed at the session are\u00a0available on the ABA Business Law website and are superb.<\/p>\n
David Burt, in-house counsel at\u00a0E.I. DuPont, reflected many of the themes of the other speakers.\u00a0 He spoke of what he has experienced as the “Golden Hour,” \u00a0when the client comes to his office and explains a prpoblem that he thinks may be headed for formal litigation.\u00a0 During this conversation, said Burt, the client will describe a business deal, or an engineering joint venture, or a rocky business relationship, with a narrative cogency that will never again be duplicated.\u00a0 One verifies the details with others promptly, but it needs to be done early.\u00a0 Later, the story is tinged with self-protection, or becomes stale, or is couched in a particular way.\u00a0 At the early “Golden Hour,” the lawyer gets the best chance to understand what the business problem really is, and to serve the client.<\/p>\n