Litigators are constantly faced with the decision of what stylistic methods to use in settlement negotiations to maximize value for the client and achieve overall objectives. Usually a strict black and white approach to each case will miss out on the shades of grey that are needed to navigate the settlement waters. Litigators must operate in a world of uncertainty, where ambiguous communications are woven between demands and counter offers, all leading to the goal of achieving a fair outcome. The negotiation choices that are available for an advocate can be broken down into two distinct approaches, Transformative or Transactional. The references above will become clear later in this article.
The transformative advocate will always consider the needs and concerns of the client first and foremost, often putting the monetary aspects of the case in second position. The transactional advocate will primarily consider the dollars that are at stake and proceed from a competitive and aggressive horse trading philosophy. As we will see, combining the two approaches will balance the needs of the client against a fair range for the case.

This is important to think about because many lawsuits begin as a result of a “personal” value having been compromised, where money is the only way to handicap fairness. Consider a case involving a high profile entertainer who is hurt because the defendant said or wrote something objectionable in the press, or even used the entertainer’s intellectual property without permission. In response, the entertainer strikes back by filing a lawsuit for various torts and publicly complaining about some moral or personal value that has been wronged that needs to be corrected. This effort is a way to get the attention of the other side in order to “transform” the mindset of those who have harmed the entertainer and to punish the person who used the defamatory language or illegally took the intellectual property.

This attempt at transformation is often met with non-monetary remedies such as an apology, press release or charitable contribution. While at first blush this might seem like an elegant solution, it does not address the monetary goals of the case. Financial remedies necessitates a “transactional” approach where horse trading for dollars is the primary strategy for success.

When these two models converge, the transactional compromise over money tends to be the narrative of the negotiation, taking precedence over the transformative approach. Yet clients often want to know that their personal concerns have been addressed or the money may never be enough to reach a resolution. Once again, the advocate’s approach is not necessarily black or white, but would be well served by a combination of transformative and transactional methods to solve the problem.

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Tags: Transactional