Litigation Risk Management Institute

Litigation Risk Management & Settlement Valuation

The Litigation Risk Management Institute’s Negotiation Strategies methodology enables companies to anticipate and shape the outcome of complex negotiations. We provide clients with:

A process and analytic tools to support the development of negotiating strategies.
Assessment of negotiating risks
Ability to compare alternative strategies
Knowledge of the best negotiated outcome
The right negotiation strategy to get the best outcome

Effective negotiation strategy is a four step process.

Problem Framing & Defining Issues

Data Assessment

Analysis

Strategy Development & Execution

First step. Frame the problem and to define the issues

Problem Framing & Defining Issues		Data Assessment		Analysis		Strategy Development & Execution
Scope of project Define objectives Issues for negotiation Identify stakeholders Identify who has best information on stakeholders Confirm with senior management

The Components of a Negotiation

Negotiations focus on determining the outcome of one or more issues.

Need to be clear about issues being negotiated

Outcomes are the product of competition among stakeholders with conflicting views.
Need to include all the relevant stakeholders
Organizations
Individuals–need not be explicitly identified

Can be represented by a surrogate
i.e.—Sam Smith or someone with similar characteristics

Second step. Assess the influence, salience, and positions of all the parties.

Influence is the power to shift the views of others to reshape the outcome of the negotiation.
It is a relative measure.
If party A and party B can easily impose an outcome on party C, then the sum of A’s and B’s influence is significantly greater than C’s.
We assess the relative influence among the institutions involved in the negotiation.
We assess the influence that each individual has within their own institution.

Salience represents the importance of the negotiation to each individual. Think of it as the priority the negotiation commands for individuals

A salience of 99 means that they would leave the death bed of a loved one to attend to the negotiation
A salience of 20 means that it is on their radar screen, but that it is very low priority.

Finally, we assess the current position of each individual. The position is the specific outcome that individuals advocate for each issue.

This is not where they want to end up, or what they think they can get, but their currently stated or implied position.
We can calculate the institution’s position from the positions of the individuals.
Often, the only position presented is that of the institution.
We can use this position as a surrogate for the positions of the individuals.

Third Step. The first pass analysis will suggest ideas and opportunities that can be refined into alternative strategies with further development.

Problem Framing & Defining Issues		Data Assessment		Analysis		Strategy Development & Execution
				Fully analyze negotiation Presentation of results of analysis Identify negotiation risks Identify opportunities

Results of the Analytic Process
The model uses game theory and decision theory to provide a round-by-round simulation of the prospective negotiation.

The “base assessment” illustrates the logical outcome of the negotiation based on the data provided.

To assist the client in achieving a favorable outcome, the model can illustrate the likely result of different negotiation strategies and identify opportunities to influence specific stakeholders.

Fourth step. Develop and execute the best strategy, refining it as negotiations proceed.

Problem Framing & Defining Issues		Data Assessment		Analysis		Strategy Development & Execution
						Discuss possible strategies Choose initial strategy Refine strategy as negotiation proceeds

The process delivers practical answers to key questions.

To whom should we be talking?
How aggressive should our opening position be?
Who should participate in the discussions?
Should we present a unified position?
Whom can we influence?
If an agreement is possible, what terms are anticipated?
Will negotiations break down?

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