Numbers are endlessly fascinating. Sometimes numbers take on mystical significance. Often numbers can mislead us. The number 99, for example, seems to be an order of magnitude less than 100, while a number like 22 seems almost equivalent to its neighbor 23 (even though the difference between the two smaller numbers is proportionately almost five times larger). Ones and twos sound smaller than sevens and eights, meaning that a number like 31 can sound smaller than a number like 28. In negotiations, people place so much significance on the magic properties of numbers that they can declare victory if they obtain a slightly larger value than they expected, and feel defeated if they settle for a tiny bit less (or vice versa for the defendant).
People rely on the properties of our base 10 system, and our ability to picture certain values, to set up artificial boundaries—“I won’t take a penny less than $100,000,” or ” I’ll pay anything in the $40,000’s, but won’t go into the $50,000’s.” Those numbers make sense to us, but imagine how those values would look if we translated them into computer language (base 2): Instead of saying $100,000 is my bottom line, which somehow appears logical, I would be saying that I won’t go below 11000011010100000, which sounds completely arbitrary and absurd.
We also use numbers to measure the distance each side has traveled toward the other side’s position. Parties in negotiations say things like “They only came up $10,000, but I showed good faith by dropping $50,000 from my opening demand.” Is that meaningful? That might depend on how reasonable your opening demand was.
Numbers can also allow us to represent parties’ negotiating positions in a pictorial fashion. We can depict their opening bids as the goal posts on an imaginary football field, for example, and tell them they get to kick the ball toward their goal, but then the other team is going to run it back somewhat. (That way they understand that if they do well in the negotiations, they might end up on the other side’s 30 yard line, but if the other side is more powerful, they might end up on their own 30.) Or we can draw graphs representing the probability of various outcomes at trial (the curve drawn by the defendants generally bulges up on the left, close to a zero verdict, while the plaintiff will usually draw a curve skewed way to the right, representing the high probability of a million dollar verdict). We can draw a zig-zag pattern tracing the parties’ offers and demands. We can also draw partially overlapping circles to represent possible areas of overlap in the parties’ predictions or positions, or potential settlement ranges. (I also like bar graphs and pie charts, but unfortunately don’t find much use for them in mediation.)
In mediation, after we spend a while talking about facts and issues and problems, we sometimes end up spending a lot of time talking about numbers. Especially when the dispute is difficult to resolve, for whatever reason, the discussion of numbers can also become protracted. This discussion can serve as a shorthand for expressing the strong feelings the parties still have not resolved. One side doesn’t want to move down from their eight: that’s because they feel strongly about their position or interests. Or they feel insulted by the other side’s three. Why, I might ask, when someone is offering you money, do you feel insulted? You don’t have to accept it. What does that number represent for you that makes you want to head for the door?
During the negotiation end game, when the numbers get reasonably close to each other, there may be no material difference between the parties’ positions. Yet even when both sides already know they are probably going to settle, and cannot explain why one side’s number makes any more sense than the other’s, it can still be difficult to bridge that last remaining gap. Why? Maybe because there’s still a final reluctance to let go of the dispute. Or maybe because whichever side can make the other side blink last will feel like they “won.” People sometimes care about doing well in the negotiation as much as they care about resolving the dispute.
I remember one of my former New York law partners telling me about a big Wall Street player he used to run into on the train platform from their Westchester suburb. Once he asked the guy, “Why do you do it? What motivates you to keep going to work, when you have already put away enough to retire and live however and wherever you want?” The player answered that it was all a game to him at that point. He enjoyed the game, and money was how you keep score. We care about numbers because that’s how we keep score. People aren’t content just to say they achieved peace and eliminated a troublesome dispute from their lives. Even if that is how they feel, they still have to answer the inevitable question: How much? (How much did you get? Or how much did you have to pay?) We need to quantify the result. Maybe we learned how to do that way back when the teachers first started handing out our test scores. Or maybe we learned it when we argued about the results of a baseball or basketball games in the schoolyard.
I handled a mediation recently in which the defendant asked me at one point, why do you keep trying to get me to pay more? As if my request showed that I doubted the soundness of his calculations, or the strength of his arguments. I had to explain that that was my job: to use all the tools the other side was giving me, and all my persuasive powers, to get him to pay more. But I also assured him that when I went to talk to the other side, I would use all the tools he was giving me, and all my powers, to persuade the other side to take less. Then I told him it was all the same to me whether he paid 5 or 6 or 7 (put whatever suffix you want on these made-up numbers). Any of those numbers to me seemed better than the alternative of spending a lot of money on nasty litigation. A light seemed to go on when this guy realized that it didn’t matter to me what number the case settled at. And another light popped on in my head as I realized that that particular case was about to settle. Because now this guy wasn’t so invested in his particular boundary line either. He just had to decide the simple question of whether he wanted to resolve the dispute or not. (It settled very close to 6.)