Why Mediation?
By Lawrence A. Huerta
One of the most difficult jobs of an advocate is making a strong opening offer that generates a reasonable counter-offer. There are no standard formulas, so how is a strong and realistic opening offer calculated? In the context of litigation, when should an opening offer be conveyed? Conventional wisdom is to open with an extreme offer to test the other party and to explore their flexibility. Unfortunately, if the opening offer is perceived as extreme, it can lead to an early breakdown in negotiations. Another piece of conventional wisdom is to make a “throwaway” offer without any reasonable expectation of launching a productive negotiation and for the primary purpose of probing the other party’s willingness to negotiate in a certain range. In 26 years of mediating litigated cases, throwaway offers have been the source of many early stalemates or, at the very least, extensive time devoted to bringing the opening offer into a reasonable range. In the worst cases, throwaway offers can poison an entire negotiation by negatively influencing all remaining counter-offers, including final offers.