Improving Your Judgment Like a Star Athlete Does

Andre Agassi has something to teach us about improving our judgment – we need to put ourselves in other peoples’ gym shoes.

This was published in the first Law.Com Online Issue March 3, 2014 -and is here by permission:

By Laura A. Kaster, Law.com ContributorPublished: Feb 28, 2014

Improve Your Judgment Like a Star Athlete Does

Andre Agassi was admitted to the Tennis Hall of Fame in 2011. He still has something special to teach lawyers about improving our judgment.

Lawyers are in the business of selling judgment. The focus of our training is the law so that we can understand it and inform our clients on its dictates or consequences for a project or problem that they face. However, we have a broader mission; we have obligations to share the kind of advice and information clients need to make an informed decision about their course of action in their particular circumstances. This often includes economic issues and predictions of outcome. Comment 2 to Rule 2.1 of the ABA Rules of Ethics provides: ”Advice couched in narrow legal terms may be of little value to a client, especially where practical considerations, such as cost or effects on other people, are predominant. Purely technical legal advice, therefore, can sometimes be inadequate.”

Although the science of decision-making has been a focus for Nobel laureates, psychologists and economists and even popular literature (e.g., Kahnemann’s Thinking Fast and Slow), now heightened by the advances in neuroscience, lawyers are seldom aware of the unconscious impediments to good judgment that they face.

Because of the very relationship that gives rise to our work, the client-lawyer relationship, we start with an unconscious cognitive bias that I call client-think. It is a species of groupthink, defined by Irving L. Janis, “Groupthink,” Psychology Today 5:6 43-44, 46; 74-76 (November 1971), after his examination of the Bay of Pigs strategic decision-making failures. Knowing the outcome our clients want and also suffering from a constellation of other particular unconscious influences endemic to our profession (See L.Kaster, Improving Lawyer Judgment by Reducing the Impact of Client-Think, Dispute Resolution Journal, vol. 67, no. 1 (Feb.-April 2012)), we examine evidence looking for supportive information, which leads to inattention blindness made famous by Christopher Chabris and Dan Simons in the Monkey Business Illusion. Inattention blindness causes us to miss evidence and information that may be critical to the ultimate result and that if known would have influenced our approach or strategic thinking and advice.

Andre Agassi knows something, whether intuitively or because of experience. He knows that a key to improved judgment (and performance) is to put yourself in the other person’s shoes. He did it almost literally. On January 16, 2014, New York Times sports reporter Greg Bishop wrote in “Seeking a Bigger Sweet Spot . ..” that Roger Federer was going for a larger tennis racket despite his long commitment to a smaller “magic wand.” But what fascinated me was a paragraph on Agassi, who “took the unusual step of buying rackets used by other top players and practicing with them.” The article notes that he did this not because he was considering a new racket but to “to see how certain rackets worked and ascertain which shots his best opponents could hit easily and which shots they could not. He could essentially scout Federer by using Federer’s racket in practice.” Agassi knew one way to understand the other side was to assume its position.

I asked Gerd Gigerenzer the leading German authority on decision-making if there was a single piece of advice to lawyers who wanted to improve their judgment. He said, tell them to put themselves in their opponents’ position and try to see things through their eyes. Daniel Kahneman recommends a pre-mortem, essentially a mind game in which you envision failure and dissect the reasons that caused that result – again an effort to change perspective. Assigning a member of our legal team, ourselves, or our client to assume the role and perspective of the opposition is one of the best ways to improve our judgment. Mediators too can help serve this perspective shifting function.

Nothing can be more important to our professional skills than learning how to improve the judgment we provide our clients; it is worth study, practice, and a change in perspective.

Bending your mind

It is often assumed that understanding the facts is the easiest part of developing a settlement number, a strategy, or a judgment as a neutral. But in fact, the science of judgment and decision making and studies in neuroscience teach us something else. The shortcuts or heuristics that our unconscious minds have to use to conserve energy — something like the compression necessary to send information through the Internet – may blind us to important information needed to assess our cases. Check out this illusion that occurs because over a lifetime of looking at faces, your mind must “see” things not as they are but as you anticipate. Google the Charlie Chaplin Mask Illusion

Judgment – Valuing your case for mediation

If there were a blue book value for cases, it is likely that parties could reach a zone of probable agreement in mediations. One of the impediments that can cause impasse in mediation is the very real differences in assessment that parties have made before they arrive. The question really is why do parties misjudge the value of cases — and we know they do. Randall Kiser has undertaken several important studies of lawyer judgment in his books Beyond Right and Wrong (Springer Verlag 2010), and How Leading Lawyers Think (Springer Verlag 2011), and “Let’s Not Make a Deal: An Emprical Study of Decision Making in Unsuccessful Settlement Negotiations” with Martin A. Asher and Blakely McShane 5 Journal of Empirical Studies, Vol.3, 551-591 (2008).

We know that 60 percent of plaintiffs’ counsel and more than 24 percent of defense counsel turn down settlements only to find at trial that settlement was a better deal. On average over a very wide range of cases, plaintiffs received nearly $50,000 less at trial — not accounting for all the costs and fees it took to get there. And, although defendants made settlement errors in fewer cases, the costs were nearly 20 times greater when they did err. Obviously the cost of misjudgment is substantial. Why are these mistakes made. The answer is cognitive bias and in this case, I have coined the phrase “Clientthink.” This is a variant of Irving Janis’ Groupthink, the problem that creates a kind of tunnel vision in which only light can be seen and information that might be readily visible is blocked by positive thinking. This occurs because both lawyer and client start with a very specific perspective and digest incoming information with their blinders on. A mediator can help by providing a way to take a different view, to assess facts differently and to undertake a case premortem that may lead to a more realistic assessment of the value of the case.

For a more detailed discussion, check out publications on this website.

NJ Mediation Confidentiality

New Jersey has an important new case that mediators and advocates in mediation should be aware of: Willingboro Mall Ltd. v. 240/242 Franklin Avenue Associates LLC , A-4589-09. The headlines in the news focus on the fact that it held an oral settlement reached in mediation may be enforceable if subsequently memorialized by a writing :”We hesitate to interpret the writing requirement of Rule 1:40-4(i) so rigidly that it becomes an impediment to resolution of a matter through mediation.”

I would like to focus on a different point in the case — the mediator’s privilege not to testify.

New Jersey has adopted a mediation privilege in its rules of evidence:
New Jersey Rule of Evidence 519 entitled “Mediation Privilege” provides that a mediation communication is privileged and shall not be subject to discovery or admissible in evidence in a proceeding unless waived or precluded under limited circumstances. However, the parties to a mediation may expressly waive the privilege, and in the case of the privilege of a mediator, it may be expressly waived by the mediator.

The evidence rule expands New Jersey Court Rule 1:40-4 “Mediation – General Rules” which include a “confidentiality” provision. It mirrors several provisions within the New Jersey Uniform Mediation Act, N.J.S.A. 2A:23C-1 to 13.

In Willingboro the defendant’s counsel sent an email with a draft memorandum of understanding subsequent to the mediation and also undertook to put moneys in escrow — There was no signed writing. But there was a 4-day hearing on a 1-day mediation that resulted in the enforcement of the oral agreement commemorated by an unsigned writing. The court held that all parties and the mediator waived the privilege:

“Here, defendants first breached the confidentiality of the

proceeding by supporting their motion to enforce the settlement

with a certification from the mediator. Thereafter, the

mediator was deposed and testified at trial. The extent of the

waiver was the subject of rulings by Judge Bookbinder during the

deposition of the mediator and at trial by Judge Hogan. We do

not understand any argument advanced by plaintiff to contest

those rulings.”

This is not a good outcome for a mediation or for confidentiality. The clear lesson for mediators is make sure there is a signed writing at the close of the successful mediation, consider asking the parties to draft an agreement or key terms in advance (without monetary terms), and enter into a confidentiality agreement with the parties before the mediation providing that they will not call the mediator as a witness.

Facebook and The Social Network Speak on Mediation

“Social Network” has come to life with lessons on how to prepare for mediation.

The storyline for this blockbuster movie, in case you missed it is that on “a fall night in 2003, Harvard undergrad and computer programming genius Mark Zuckerberg sits down at his computer and heatedly begins working on a new idea. In a fury of blogging and programming, what begins in his dorm room soon becomes a global social network and a revolution in communication. A mere six years and 500 million friends later, Mark Zuckerberg is the youngest billionaire in history… but for this entrepreneur, success leads to both personal and legal complications.” http://www.imdb.com/title/tt1285016/.

Those legal complications resulted in a recent Ninth Circuit decision that is of value even beyond the curiosity factor. The Facebook, Inc.; Mark ü Zuckerberg v. ConnectU, Inc., Slip Op. No. 09-15021 (9th Cir. April 11, 2011). The law suit was initiated by the twin brothers Winkelvoss, who claimed that Zuckerberg stole the idea for Facebook from them. Zuckerberg countersued and the district court in California ordered the parties to mediate. Facebook, the competing website ConnectU, and the Winklevoss twins were all party to the mediation. Before the mediation began, the participants entered into a confidentiality agreement that provided that all statements made during mediation were privileged, non-discoverable and inadmissible “in any arbitral, judicial, or other proceeding.” A full day of negotiations resulted in a signed, handwritten, one-and-a-third page “Term Sheet & Settlement Agreement.” In return for cash and a Facebook shares, the Winklevosses gave up ConnectU. The parties stipulated that the Settlement Agreement was “confidential,” “binding” and “may be submitted into evidence to enforce [it].” Slip Op. at 4902.

But, before the ink was dry, the parties were at arms. Facebook sought to enforce the settlement term sheet. The Winklevosses claimed material terms were omitted from the term sheet and that they had been defrauded (in violation of Section 10(b)-5) in the mediation, in particular focusing on a difference in their understanding of the value of the shares of Facebook that they had agreed to accept. The Court found the terms sufficiently definite, including the delegation of the drafting of the deal papers to Facebook. It further held that the dispute over the valuation of the shares was not particularly persuasive given the extensive prior discovery in the litigation and the presence of six lawyers and Winkelvoss pere who was a former accounting professor at the Wharton school. The release language agreed to in the term sheet was to be the broadest possible and to terminate all claims between the parties. The Court read this to include any claims, including unknown claims, arising out of the mediation itself: “An agreement meant to end a dispute between sophisticated parties cannot reasonably be interpreted as leaving open the door to litigation about the settlement negotiation process.” Id. at 4908.

Moreover, properly excluded proffered testimony about representations made during the mediation in light of the confidentiality agreement between the parties. Finally,the Court noted that the current valuation of Facebook appears to be three times what the Winklevosses were claiming they were entitled to, demonstrating that their advisors had made a perfectly good deal for them and all good fights must come to an end. Id. at 4912. The current value of the settlement appears to be $160 million, and was a mere $65 million at the time of the settlement. http://latimesblogs.latimes.com/technology/2011/04/winklevoss-twins-file-a-petition-for-another-hearing-in-their-fight-with-facebook.html. The twins have already petitioned for rehearing en banc. Id.

Most of us wish we could have the Winklevoss problem. But we may look beyond the story to the questions it raises. How could parties, and more importantly the advocates, come to such a significant mediation without having actually drafted key language? Without having key terms at hand? Why was a handwritten document required? The answer may be that despite the fact that that over 98% of cases settle, lawyers still prepare for settlement discussions and mediation far less carefully and assiduously than they do for trial. We have a system of checklists and protocols for trial preparation and no comparable system of preparation for settlement and mediation. Dealmakers do usually have a list of key terms but often resort to references to the “usual language” which does not really exist in most cases and leads to confusion or recrimination. Do yourselves and your clients a favor and suggest to the mediator that release language and key non-monetary terms be exchanged even in advance of the mediation, or certainly that the parties bring draft clauses to discuss at the mediation itself. If you have “standard” release language and a preferred confidentiality clause, bring them along. In fact, create a checklist of items and provisions that will have to be covered and your preferred terms for each of them. These terms may be agreeable to your opposing counsel and may even form the basis for small agreements that can lead to better resolutions. In any case, don’t let key assumptions go unstated and undocumented. Let the movies speak to you