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Poker Lessons

Negotiators Should Use Mediators As Friendly Dealers   

 

 

by Myer J. Sankary

 

"If you're gonna play the game, boy, you gotta learn to play it right

You've got to know when to hold 'em, know when to fold 'em
Know when to walk away, know when to run.” (C)

 

Kenny Rogers, The Gambler

 

With each draw of the cards and each bid by a player, information is revealed requiring a judgment on counsel's part, either to add more to the pot, stand pat or fold.   The lawyer should be alert in the mediation process constantly assessing the information provided to him by the mediator and the other side.  Too often, legal negotiators leave the mediation process without the opportunity to make a final reality assessment, either because they were not given sufficient information, or they were not alert to the clues provided. 

 

As attorneys spend more and more of their time negotiating settlements through mediation,  they are learning they need to improve their negotiating skills in order to represent their clients competently.  Indeed, failure to represent a client competently in mediation may be the new fertile field for future malpractice claims.

 

Despite the proliferation of new literature about improving negotiation skills, attorneys seem fixed in the belief that mediation is nothing more than a friendly settlement conference, with the mediator carrying proposals and counterproposals to each of the parties like a waterboy for a football team.  The supposition is that if each attorney persuasively argues his points of fact and law as though in trial, that eventually the mediator will convince one side it is likely to lose in trial and the other side will win, thereby dictating a rational settlement. 

 

However, rarely is the mediation process so simple. And the failure of an attorney to learn new negotiating strategies and tactics leads to results like the perennial gambling novice who consistently loses at poker games. 

 

Poker and The Mediation Process

 

The game of poker provides interesting insights and rules of engagement for lawyers in high stakes mediations. One of the most important lessons to learn from experienced poker players applicable to competitive legal negotiations is that counsel needs to be alert when participating in the game.

 

As in poker, each move must be studied and understood to determine whether counsel has a winning hand or whether an opponent can win.  Every card the parties show has an affect on counsel's next move.  The advocate must decide whether to draw another card, raise the bid, or call.

 

To decide how best to play the game, counsel must observe an opponent's actions to determine whether opposing counsel's behavior reveals something about the advocate's hand that will suggest counsel's next responsive move. Counsel must determine whether the opposing party's information is believable and can have an impact on the case, or whether counsel is being deceived with claims that are not substantiated and can not be proved. 

  

Playing The Game

 

It may be helpful to view the mediator as a friendly neutral dealer with no bias or stake in the outcome. In this role, the mediator is more than someone who keeps track of the bidding.  Rather, as a friendly dealer, he is able to obtain information in confidence from each side that can be helpful to each player.

 

Although the mediator may not be able to fully disclose all the cards of each opponent,  the neutral can provide important insight, including:

 

-The strength of each player’s hand

-The apparent veracity or falsity of the information

-Whether a player is bluffing or has winning cards

-Whether and how much a player is committed to his position

-The apparent bankroll of each player

-The likelihood and cost of continued bidding

-An assessment of how a bid will be received by each of the players

-Recommendations about the most effective next moves for an acceptable outcome 

  

Knowing The Difference

 

The major difference between poker and legal negotiations is that the purpose of mediation is not to have one winner take all at the expense of the other players. Rather, the goal is to achieve an agreement that satisfies the interests of the participants and avoids the risk and uncertainty of trial where the outcome can be as a zero-sum  game.

 

The mediator should be able to assist participants in evaluating not only the legal merits of each side, but also to read the commitment, capability and risk tolerance of each party. Players can then more accurately assess the merits of their own hands in light of the information provided by the mediator and reduce the risk of miscalculation.    

 

Winning Hands

 

Strategic Approaches From Top Players

 Successful card experts know the rules of engagement when bluffing is the name of the game.

Winning poker approaches [1][1] include:

 

Rule One:

When you have nothing, get out. The player who has the patience to stay out of pot after pot, for hours if necessary, is the player who, in the long run, will win. 

 

Astute lawyer should  follow this rule. Don’t file a lawsuit in a case that has no merit.  Don’t rely on winning by bluffing.  After your initial investigation, if the facts of your case do not justify pursuing the matter, decline to represent the client.  As in poker, more cases are lost because the lawyer fails to exercise good judgment at the outset and undertakes a losing cause.

 

Rule Two:

When you're beaten, get out. You may improve your hand, but the odds are against it. Except for going in on nothing, trying to beat a big pair with a small one loses more money than anything else in poker games.

 

If you have decided that the case appears to have merit when you commenced the lawsuit, the next rule for the competent lawyer is to recognize after thorough discovery whether you will be beaten because the other side holds a better hand.  Just because you filed a lawsuit does not mean that you must take the case to trial when it is likely your client will suffer defeat.  It is indeed a difficult judgment to terminate a lawsuit after you have invested your time and money, as well as incur the possible displeasure of your client, but it is much better that you do so early when you have learned that you are beaten, than having a judge or jury tell you so incurring potential added financial losses for both you and your client. 

 

Rule Three:

When you have the best hand, make your opponent pay.  

 

This rule is a good one for the litigator to follow.  If it is your judgment that you have a winning hand, then you should have the courage and conviction to hold your ground to maximize the recovery for your client.  You should also know how to negotiate the best deal for a client in this situation by carefully considering what should be your opening demand as well as what concessions you may be willing to make in order to achieve you and your client’s objective.   After all, a well-negotiated settlement that achieves a good result for your client is generally preferable to obtaining a similar result after the expense, uncertainty and anxiety of a trial.

  

Tough Calls

 

At some point during the negotiations, however, you may be faced with the perplexing question: Iif you believe that you have a strong winning hand based upon your analysis of the law and facts that support your case, should you nevertheless consider that your client settle for something less than the full value that you have placed on the case?

 

There are those who might argue that to take less than the full value means that you are either not confident in your case or in your advocacy skills.  When you have a full house, a winning hand, the confident litigator might say you should go for the jugular – demand and receive the full value of the case. 

 

The answer to this question is not as simple as it may appear.  Legal negotiating requires many skills, including the ability to think strategically and make smart decisions based upon the realities presented during the negotiations.  Learning game strategies can be helpful to answer difficult questions such as how to make moves including opening offers, responses and counter proposals. 

 

  • Playing By The Rules

Understanding and applying additional basic ideas of winning poker can be instructive.

 

  • Each Game is Different.

Make sure you fully understand the rules of the present game. Don’t assume that the rules of a previous game still apply.  Each round of bidding is new and different.  The facts and applicable rules of law are different.  When you are in mediation, use the friendly mediator to confirm the rules of the game you are in now.

  • Make an Assessment.

Second, make sure you have assessed the capability and commitment of your opponent in this game. He or she may be better prepared, well financed and more committed to staying to the end than your previous opponent. This can force you into an unwanted trial, as opposed to folding, as an earlier opponent may have done.

  • Review the Bidding.

Make sure you have a winning hand.  Can you be  sure your opponent cannot beat you?  Have you got the highest cards, the strongest facts and supporting legal claims?  In poker, a full house will win 9 out of 10 times,   but it can be beaten by a Royal flush, a straight flush and four of a kind.   The friendly mediator should provide invaluable information to help you make sure that you have that perfect winning case or something less. 

 

  • Nothing Is Certain.

In legal negotiations, even if you have an appellate case supporting your position, the functional equivalent of a winning hand, such cases have been known to be distinguished or overturned by other appellate courts.   In the Estate of Eugene (2002) 104CA4th 907, 128 CR2d 622, the Public Administrator objected to the petition for probate of decedent’s will, claiming the will was defective because only one of the two witnesses signed.  Because of Prob. C. §6110, and cases that supported their position, the Public Administrator made no attempt to compromise with the charitable institution, the sole named beneficiary under the will.  To the surprise of the administrator, the appellate court reversed the lower court decision declaring that the failure of the witness to sign the will at the same time the testator executed the document did not invalidate the will, because the witness who had failed to sign, the decedent’s attorney, testified that he was present and witnessed the will, but by mistake, failed to affix his signature in the presence of the testator.  The court found there was no likelihood of fraud in this case which was the purpose of the law requiring two signatures, and to invalidate the Will would frustrate the clear intent of the testator.   The State of California played a zero-sum game because it thought it had an unbeatable hand.  They were winners in the trial court, but lost everything on appeal.  Instead of sharing, the entire estate goes to the charity and the State gets nothing. 

 

The lesson to learn is that even though you think you have a winning hand,  it may be wise to settle for something less than 100 percent, because you can never be certain that your opponent will not end up with a hand that beats you. 

 

The value of the mediation process is that it is the best place to sort out the many complex factors that can lead to success or failure in a litigated case.  The friendly mediator can be an invaluable ally in helping you read the cards and the commitment of your opponent so that you can make a smart decision whether to take something less than the full value of your claim in order to achieve closure with certainty.

 

Most importantly,  remember the gambler’s admonition: If you’re going to play the game, learn to play it right. 

 

Copyright May 2003 

 

 



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