4 PerspectivesJanuary 30, 2009

One Tire Too Many: An Unexpected Lesson in Trust

The story might be better if I could make it more dramatic, but tires aren’t all that exciting. My car had turned 5 and rolled past 45,000 miles, and there was little debate — I needed new ones. I braced myself for an expensive day, pulled into Sewell Lexus, and asked for four new tires. My unexpected lesson in trust came when my service rep suggested that wasn’t really what I needed.

One Tire Too Many

As you might imagine, I wasn’t in the mood to reconsider my need for tires, and my request hadn’t been ambiguous. But my longtime service advisor pushed, and I listened with patient annoyance. She explained that she’d be happy to sell More…

Categories: Communication,Education,Negotiation,Theory

3 PerspectivesSeptember 26, 2008

Rule 68 and Offers of Judgment Part II: Why They Work and How to Use Them

While I wrote previously about how Rule 68 works in Rule 68 and Offers of Judgment Part I:  How They Work and Why You Should Care, most people haven’t considered why it works.  This post outlines some of the reasons why offers of judgment, under Rule 68 or otherwise, can be so effective in getting cases settled.

As outlined in Part I, Rule 68 imposes a penalty on a plaintiff who refuses a reasonable settlement offer and doesn’t beat that offer at trial.  At risk are court costs which, admittedly, don’t create a significant financial exposure.  Big numbers or not, the Rule can still be effective if used under the right circumstances.

Why Does Rule 68 Work?

Rule 68 works because lawyers have to communicate settlement offers to their clients, and a Rule 68 offer of judgment is a settlement offer that creates a downside risk for the plaintiff. More…

Categories: Rule 68,Settlement,Strategy,Theory

Add Your PerspectiveSeptember 9, 2008

Why It May Be a Bad Idea to “Send them a Message”

“Our next move needs to make it clear that we mean business.”  I have heard that line (and others like it) before, and you have, too.  But a concept in a popular business book recently helped me understand why this isn’t the great approach I once thought it was.  In Made to Stick:  Why Some Ideas Survive and Others Die, authors Chip Heath and Dan Heath explain how the “The Curse of Knowledge” impacts how we communicate.  With the help of their book, I now see how some negotiations succeed while others fail.

Do We Outsmart Ourselves?

At some point in almost every negotiation we are tempted to use our actions to send a message – a customer hoping to “get tough” demands the supplier come to her office; a home purchaser makes a “low ball” offer to signal that the house is priced too high; and a policyholder reduces his claim More…

Categories: Communication,Negotiation,Selected Posts,Theory

Add Your PerspectiveSeptember 5, 2008

The Power to Walk Away: Do You Really Know Your Downside?

I wrote recently on The Sid Hill Rule, where “the power to negotiate is the power to walk away.”  While others may disagree, I believe there is no more important rule for any negotiator.  A corollary of this rule is that, before you decide to walk away from the negotiating table, you had better know what your downside is.  My recent search for a beach house reminded me just how hard that analysis can be.

Surfing to seaside.com

One of my favorite places growing up was a tiny spot on the Florida Panhandle near Grayton Beach.  Then a destination virtually unknown, I watched a nearby idea called “Seaside” take hold and grow – by all appearances into a quaint, family-oriented community that would serve as the ideal backdrop for any American’s Fourth of July photo.

When a recent urge to take a vacation hit me I typed the logical guess “seaside.com” into my browser.  I was surprised to see More…

Categories: Fundamentals,Negotiation,Settlement,Theory,Walk Away