Chapter 23 - Don't be a "Settling Attorney"
The streets and courthouses are filled to the brim with settling attorneys. I am referring to those attorneys who are hell-bent on settling because they are ill-equipped to go all the way.
Sometimes, you have no choice, and you just have to take what you can get. You are constrained by bad facts or bad law - maybe both. But in way too many cases, cases are settled too quickly.
I see attorneys all the time with decent cases to litigate who will go into a mediation knowing fully-well they are going to take the other side's last offer that day. They are afraid of the consequences of what happens if a settlement is not reached. "Maybe I'll have to go to trial, and I am not so sure I can do that."
If you have a good position and you know how to reasonably value your case, then, by gosh, stick to it. Minimize your flexibility. I recall a mediator in a construction case once telling my defendant client at the conclusion, as the settlement documents were being signed, "I want you to know your attorney is so stubborn and made settling this case so difficult that he saved you at least $20,000." That made me feel good (he was right, too).
I have seen how to watch and pick up on cues to know when the other side is ready to throw in the towel. Learn these skills. One of my favorite mediation tactics is, when you feel you can get it settled but the other side might be posturing, tell the mediator, "This is getting problematic. We need just us attorneys to step out and have a quick talk without the parties present." You will always be permitted to do this. Then, I start sizing up the other attorney. Watch his demeanor. See if he is squeezing for a few more peanuts.
In one case, I did this where the issue was a will contest. Testamentary capacity was at issue, as were undue influence and lapse of gift. The other side had a difficult case, and we definitely knew that much. At my typical "just the lawyers and mediator" meeting, I started talking to opposing counsel. I recall being about $75,000 apart or something along those lines. He was saying things like, "My clients aren't going to settle at your offer. We are way far apart. You need to go a little higher." Forget "way far apart;" the key word, "little" was the nail in his coffin. (Of course, you would figure I would not have let him know that he leaked it, but I did).
After that, we went back to our separate rooms, and I told the client what we said. I told the client we could force them to take our offer, but they were finagling. My client wanted it over. She did not like the stress. I told her that it was her call if she wanted to make a small gesture - another $5k or so. She said she would be thrilled to end it at that. I said, "we will." Then, the mediator came in. I told the mediator:
Ok. I'm going to tell you where we're at and where they're at. We're at our end. They'll take our last offer. In fact, I could stick to our guns and ram it down the other side's throat. This case is over. He's begging. He's done. He'll take it. In fact, you can go tell him that. I don't care. Tell him I know he's done. He's going to take what we offered. He's groveling. I'm serious, tell the guy I know his gig's up. I've told my client, and she knows it. But she wants it done, and against my advice, she wants me to throw in another $5k to close it down. I told her I have it closed, but she doesn't have as much stomach as I do for this stuff. So, $5k is it. Tell this guy it's over.
They took the deal.
In the "foot case" mentioned earlier in this book, there was an episode during mediation which ought to be a real tip for a young lawyer. The dollar amount in this case was pretty good. We were young attorneys for the plaintiff. The mediator was one of those higher-end, boutique mediators with a good reputation for getting cases settled. She tried to play a nasty little trick on us right in front of the clients.
The other side had offered their top authority: $250,000. I said, "This isn’t going to get it done." My partner loved hearing that number (I did, too). We could have walked out then and there and made a nice fee on an easy case. Not me. There was more. I told the mediator that the family (the boy) would not get enough out of a $250,000 settlement. So, here is what the mediator says: "Well how about this: Take the $250k, give $200k to the clients and accept $50k as attorney's fees. It's a great deal!"
Say what! I was livid, but I did not show it. I had to take control of that situation fast, or we were going to cheat ourselves out of a good fee. My partner was salivating more than me. I did not give him a chance to say a word. Immediately, I told the clients:
Look. The mediator is just doing her job. No doubt $250k is a lot of money, but everyone in this room - including the mediator and opposing counsel (he was there, too) - knows the value of this case is higher than that. I am not inclined to sacrifice our fees in order to settle below what this case is worth. We're not settling today. Give us a little more time.
The clients were okay with my proposal, but I still had not gotten over being cornered into that situation. I wanted to explore the flexibility of the other side before we packed up and left. I had noticed the insurance adjuster kept periodically walking down the hallway regularly and leaving the office for a few minutes. On a hunch, I figured him to be a smoker. So, I asked opposing counsel, "Why is the adjuster always walking back and forth? Is he a smoker or something?" They laughed and said, "Yes, he constantly smokes." Well, I was a smoker, too! I said, "I've been dying for a cigarette. You all don't care if I go join him, do you?" They said, "No. Go ahead."
So, I met the adjuster out in the parking garage. "Hey, you're among the dying breed of smokers, too, I hear." I sparked up and told him the deal: "Everyone knows this case is worth so much more. It's killing me we can't get you guys up well north of $250k today. But that's what they say the deal is. So, I'm stuck here. But I thought I'd come take a smoke break since they told me you're a smoker, too. We gotta work this out." He said, "Yeah. I'm sure we can do better. I have to go get some authority, but it's not going to happen today." I said, "Cool. Do me a favor here. Go back and get the real number. These folks are good people. Their kid lost his foot. I know it was on Dad, but we all know $250k isn't where it's at. It's well north." He said, "Yeah. But on the other side Dad did it. That devalues the case. If it was Pedro the yard guy, you'd be way on up there." I told him I knew that and to just go get a real final number. I recall saying something to steer him where we wanted to go. Something like, "Honestly, I wouldn't feel right trying to talk my folks into $400k."
Really, Mom and Dad would have done the $250k. They were ready to take $70k before I got involved on the case. This was a family tragedy, and Dad was suffering from horrible guilt. Mom's nerves were in tatters. The boy had a very good recovery. He needed a prosthetic, but he could play sports as good as any other kid. There really was not any disability involved. Mom and Dad just wanted to close this tragic chapter in their lives and move on.
We concluded for the day, and within four or five days, we settled at $385,000. That was a hell of a lot better than a $50,000 attorney's fee, plus my client's came out substantially better on the net, too. So, as unusual as it was, watch out for a mediator trying to put you on the spot in front of your clients. Do not be too tempted by a quick fee when you know you can do better. Believe me, a $50,000 check for our attorney's fees would have been a very good day. We hardly had to work the case, the facts were so simple.
Size your opponent up. Watch for the slip of the tongue. Show them you see your case through tunnel vision even when you do not. Mean it. Do not let them know you are posturing. Be bold. When you catch them groveling, let them know the jig is up.
These are fun stories, but any real work-a-day lawyer has done his share of groveling. Me, too. I am talking about using tactics and mind-sets to minimize the groveling, rather than making it your habit.
© 2015, Jeff M