Let us suppose that you are an attorney representing a client at a mediation. The following occurs:
Your clients, the defendants, have told you that you are authorizedto pay $750,000 to settle the case. In settlement negotiations, after your offer of $650,000, the plaintiff’s attorney asks “Are you authorized to settle for $750,000?” Can you say, “No, I am not.”? (See below for citation.)
How do you respond?
In May 2011, I posted a blog about a study by Art Hinshaw and Jess K. Alberts about ethics in negotiations using practicing attorneys from metropolitan Phoenix and metropolitan St. Louis, Missouri who were asked how they would react in hypothetical situations during mediation. The results indicated that only about 62% of the attorneys would act ethically in a hypothetical negotiation while 19% indicated they would not act ethically, and the remaining 19% were not sure how they would react in the hypothetical situation.
Professor Hinshaw, together with Peter Reilly and Andrea Kupfer Schneider have now published an article entitled, “Attorneys and Negotiation Ethics: A Material Misunderstanding,” 29 Negotiation Journal 265 (2013) ( SSRN-id2337060.pdf ) in which they discuss several studies on this issue.
In response to the above hypothetical (Id. at p. 269), they found that a majority (61.86%) of the attorneys did answer correctly, by stating, “No’. However, a sizeable minority (38.14%) answered, “Yes”. (Id. at pp. 269, 270).
In this newer study by Professor Schneider, she asked three additional questions testing the participants’ ethics in a negotiation. (See, pages 269-274.) Again, in each instance, while a sizeable majority (60% and 77%) answered the questions correctly, disconcertingly, a sizeable minority (40% and 22%) did not.
From the various studies conducted by these authors, they conclude that “… (e)thical behavior appears to be a strong norm….” (Id. at p. 277.) But, at the same time, they point out that their surveys did not replicate real life situations in which an attorney is having to make ethical choices in the face of business considerations such as collecting her fee, keeping her client happy and advancing her career. The authors opine that “in actual practice adherence to ethical rules tend to decrease.” (Id. at p. 277.) Why? Because, assuming that the lawyers simply make a mistake in applying the ethical rules rather than intentionally violating them, the authors suggest that the lawyers either over think the rules and/or have only a superficial understanding of them. (Id. at p. 278.) As most lawyers will acknowledge, a tension exists between loyalty to the client and insuring “justice” to the point that, at times, zealous advocacy reigns supreme. (Id.)
To insure that negotiations do remain ethical, the authors suggest several negotiation strategies which, in essence, rely on the notion that information is crucial in any negotiation.
The first strategy is to create rapport or a positive relationship with opposing counsel. Get to know the other party. This will, inherently, help build trust and prevent lying. (Id. at p. 280.) It will provide you with a “baseline” of how the other attorney behaves, so that if she does attempt to lie or her behavior changes, you will readily detect it. (Id. at p. 281.)
The second strategy is to always check your own actions by asking yourself whether you would be comfortable if your behavior was “…being reported on the front page of the New York Times… (or…) posted on Facebook or being described to…
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