MEDIATION NEWSLETTER

Welcome to the first issue of "Mediation Memos", a series of articles, published electronically by General Counsel Mediation, LLC, on topics related to the use of mediation in resolving disputes.

BATNAs 

Mediation is a form of facilitated negotiation. Many of the tools and techniques used in other negotiation settings are equally applicable in mediation. In this newsletter, we discuss one of the most valuable tools in negotiation and mediation. 

In a negotiation, when we talk about one of the parties having a stronger bargaining position, we usually mean that party has better alternatives than the other. 

Let's say you're holding a garage sale in preparation for a move. The sale runs from 9 to 3. You're on a busy street and you're in a neighborhood with a lot of kids. You expect to get a lot of potential customers. At 9:05, someone who looks like one of these semi-professional garage sale mavens makes a low-ball offer on a bicycle your kid has outgrown. If you don't make the sale, you believe the buyer is off to the next garage sale, never to be seen again. The day is young, and you might do better later, but you sure don't want to move this outgrown bike to your new home. You refuse the offer, but are willing to negotiate. Unbeknownst to you, the buyer has been searching for weeks for this particular bike model for his own kid. He thinks your price is high, but would like to end his search. So, he's willing to negotiate.

Both sides are willing to negotiate, but both sides also have alternatives if the negotiation fails to produce an agreement. A deal can be struck, if the parties can agree to terms they see as being better than their respective alternatives. Each party is engaged in a largely unconscious mental evaluation of his alternatives, comparing them with the offers and counteroffers being made. This is the same kind of calculation we each go through each time we negotiate.

In one of the most insightful books on negotiation, Getting to Yes, authors Roger Fisher, William Ury and Bruce Patton, coined the acronym "BATNA", for "Best Alternative to a Negotiated Agreement". They suggest that a party engaged in a negotiation should spend some considerable time in figuring out what alternatives are available, developing new alternatives and valuing those alternatives. In the heat of the negotiation, the party could then consider how the offers and counter-offers compare with his BATNA. If he can't negotiate a deal better than his BATNA, he should walk away; however, if the negotiation produces a set of terms and conditions that are an improvement over his BATNA, he should take it!

Parties engaged in a dispute need to be well aware of their alternatives, and they need to be able to make informed guesses as to the alternatives available to their opponents. A trained and experienced mediator can help the parties identify and explore their individual BATNAs in order to produce a resolution all parties find to be acceptable, given the alternatives.

While the exchange of money is frequently a major factor in dispute resolution, and the economic cost of pursuing alternatives needs to be considered, there are usually non-economic factors that complicate how much value we put on each of our alternatives. Generally, "sooner" is better than "later"; "certainty" is better than "uncertainty", and "getting it done" is better than "having it hang over your head". Just because these factors are hard to quantify doesn't mean they don't have value in your BATNA.

Negotiators who fly by the seat of their pants are merely doing their BATNA analysis instinctively; if they're good at it, they can achieve results as favorable as negotiators who take a more analytical approach. Actually doing the analysis will ensure results a negotiator can be satisfied with - whether or not a negotiated agreement is reached.