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Negotiating a Settlement

Ninety-five percent of all court cases are settled before trial.  Negotiations are part of settling a case before trial.   Negotiations usually occur between divorce lawyers either during conferences or in written letters.  Effective negotiation involves several factors, but, most importantly, requires a firm understanding of the facts and circumstances underlying each spouse’s claims.

Is it the lawyers who usually do the negotiations?

Yes, but in some cases the parties, directly, will negotiate a settlement. What is left for the lawyers is to advise regarding the fairness of the proposal, draft the settlement agreement and finalize the divorce.

Should I choose a lawyer who is known for his trial abilities if I want to negotiate a settlement?

My view is that most cases are settled because of the concern that a trial will bring about a worse result (for the opposing party) than a negotiated settlement. A lawyer who is known as a capable trial lawyer should, therefore, have good leverage to bring about a settlement.

In a settlement I want the maximum amount that can be realized. If I hire the best lawyer possible, will I achieve this result?

Probably not. From my experience, I place settlements in three categories: fair-fair, high-fair, and low-fair.

Probably about 40 percent of the cases end up in the fair-fair range; twenty percent in the high-fair and twenty percent in the low-fair. Virtually all agreements end up in a fair category because the law states that the judge should not approve an agreement that is “unconscionable.”

Is negotiating a divorce settlement unique from other types of negotiations?

Yes. The issues in negotiating a commercial deal are usually clear cut and tangible. In a divorce the parties bring to the negotiating table the emotional baggage they acquired during the marriage. People also bring hurt feelings to the bargaining table when they believe the other party is at fault in bringing about the divorce, for example, the other spouse has committed adultery.

What is the basis on which a divorce settlement should be negotiated by lawyers?

Your lawyer’s knowledge of the facts, knowledge of the law, and knowledge of the judge who has the case. For example,  Gitlin on Divorce: A Guide to Illinois Matrimonial Law, contains statistics on the amount of maintenance (alimony) which the appellate courts have approved in terms of percentage of a payor’s net income, based on the length of the marriage. These statistics are periodically updated. This is an example of knowledge. Judges in divorce cases are given broad discretionary powers. Judges develop patterns in making awards. Your lawyer, in order to effectively negotiate your case, should know or attempt to determine the biases of the judge who has your case.

What sort of settlement should a lawyer seek for the client?

H. Joseph Gitlin, seeks high-fair, but the agreement must always be in a fair range. Divorce agreements, unless it is a short term marriage with no children, usually have a continuing relationship between the parties so it does not make sense to have an agreement that is outside of fair bounds for one of the parties.

Are “tough” negotiators the most successful?

No, not if by tough you mean a lawyer who will take an arbitrary position. There are two types of negotiators, “positional” and “principled.”

A positional negotiator will take an arbitrary position and not back it up with reason. A principled negotiator will back his or her positions up with good reasons, both with facts and the law. Studies have shown that principled negotiators achieve better results than positional negotiators.

I want out of the marriage and I am willing to accept unfair terms. Will my lawyer let this happen?

Maybe. People have various reasons for wanting out of a bad relationship and the lawyer should honor this, but lawyers should not allow the client to be ravished, that is, to enter into an unconscionable agreement.

Can’t we start negotiating immediately?

No, not usually. The only time negotiations can start virtually immediately is if both sides know all the facts as to assets (including values) and income, which is virtually never the case. Usually, minimally, it will take several months to engage in “discovery” (interrogatories, production of documents, depositions, etc.) to learn the facts.

The facts which need to be known will vary depending on the issues involved. For example, if one of the parties claims that a certain asset is a non-marital asset (not to be divided in the divorce), the facts as to how that asset was acquired are pertinent. Engaging in negotiations prematurely is a mistake frequently made and it should be guarded against.

Are there psychological factors that should be considered in negotiating?

Yes, definitely. Is the other side anxious to obtain a divorce quickly so, for example, he/she can remarry? Does he or she “have to have” a certain asset for either practical or sentimental reasons? Is one of the parties afraid to go to trial?

Does guilt play a part in divorce negotiations?

You bet. The “guilty” party is usually willing to take less and give more. This is especially so if there is infidelity involved, but guilt over infidelity dissipates very quickly so if you wish to take advantage of guilt, you must do so quickly.

Does one party’s plan to remarry shortly after the divorce have a significant impact on the divorce negotiations?

Yes. If the party intending to remarry qualifies for maintenance. Maintenance, as a matter of law, terminates upon the recipient’s remarriage. If the wife intends to remarry, but the husband does not know of her plans, she may attempt to negotiate for a lump sum payment instead of maintenance since she does not have to give back the lump sum in the event she marries.

Will a premarital (prenuptial) agreement control the terms of the settlement?

Probably. Premarital agreements often address the disposition of property in divorce proceedings. The premarital agreement may also address maintenance, for example there may be a waiver of maintenance. The function of a premarital agreement (in my opinion) is for the advantaged party to take advantage of the disadvantaged party, that is, for the advantaged party to give less to the disadvantaged party than the law would otherwise allow.

Whether the premarital agreement is valid or not, the agreement is often attacked in the divorce proceedings because the attacking party has little to lose, but a great deal to gain by attacking the agreement. It is difficult, however, to successfully attack a premarital agreement.

Are settlements based on what is fair?

Yes, but fairness is not a simple concept. Some mediators believe that fairness is whatever the divorcing parties agree to. My view is that fairness should be determined by the standard of the likely result if a case goes to trial, that is, the law is the yardstick of what is fair. Lawyers should negotiate a settlement based on what the law states is fair and proper.

Will the fact that I am “dating” or “cohabiting” affect the settlement negotiations?

Definitely. Usually the other spouse will want a “pound of flesh” in retribution. These cases are very difficult to settle. The party who is “dating” will pay a significant price for it in the negotiations.

When do opportunities for settlement arise?

On several occasions during the proceedings. Your lawyer should try to settle the case after she or he knows what you want and you and your lawyer know the facts. There are occasions when the time is ripe for settlement discussions. One occasion is when the court calls the case for a pretrial conference.

At the pretrial conference the lawyers will tell the judge their settlement positions and the judge will make settlement recommendations. This is a good opportunity to settle the case. Also the parties and the lawyers may be together in one room when a discovery deposition is taken. This also may be an opportunity to discuss settlement.

Do you encourage four-way conferences between lawyers and clients?

No. Most lawyers and divorcing people believe that if you get the lawyers and the husband and wife sitting around a table they can hammer out a settlement. This usually does not happen because:

  1. It takes good communications to settle a divorce. If the husband and wife had good communication skills, they probably would not be divorcing.
  2. Lawyers sometimes show off and posture during four-way conferences.

Are there circumstances under which you approve of a four-way conference?

Yes there are circumstances for a four-way conference:

  1. When at least the principles of settlement have been agreed upon. For example, if the wife is entitled to maintenance, so what is left to negotiate is the amount and length of maintenance.
  2. A written agenda for the four-way conference.
  3. A time limit for the conference.

What do you believe is the key to successful negotiations?

Leverage. Leverage is being in such a position that the other side will want to agree with your proposal. For example why does the United States have a large arsenal of nuclear bombs, rockets, a large military and a huge budget to support the military? It is not for the purpose of going to war, but for the purpose of preventing war. The USA’s military superiority gives this country a leverage which will make potential enemies (and friends) easier to deal with.

I would much rather settle a divorce case by holding out my hand in peace and have the settlement based on warm feelings, but on the other hand I know that sometimes I will need (figuratively) a 2×4 in my hands as a persuader. This is leverage.

What is the best leverage to have in settlement negotiations?

Trial preparation by your lawyer. This makes your lawyer a more effective negotiator. Trial preparation should also signal the other side that you are ready, because you are prepared, to take the case to trial if a fair settlement cannot be reached.

Assuming the case is going to be tried, how can my lawyer gain leverage for the sake of the trial, that is, to attempt to assure that the judge will be favorable to me?

By painting on the canvas. In contested divorce proceedings (including child custody) the lawyers (and sometimes the parties) are frequently before the judge. I think of the courtroom as a canvas. Each time I am in court I want to paint on the canvas so the judge gradually gets the picture. I want to paint my client white and the other party black.

What is the usual leverage in divorce cases?

Facts. In litigation knowledge (of the facts) is strength. This knowledge is gained by requiring the other side to answer written questions (interrogatories), produce documents and give pre-trial testimony at a discovery deposition. More often than not the facts (especially financial facts) are under the control of one of the parties and that party will attempt to gain leverage by withholding (stonewalling) the facts.

My spouse and I can no longer agree on the time of day. Can’t we just leave the settlement up to the judge?

No. Divorce cases (for that matter all cases which are in court) are not usually decided by the judge or jury. About 95 percent of all cases are settled and do not go to trial. A judge does sign the final judgment of divorce, which contains the terms of the divorce judgment. The judgment incorporates the marital settlement agreement. A judge is not even required to pass on the fairness of the agreement. The judge will disapprove an agreement only if the judge finds it to be “unconscionable,” which means that no reasonable person would enter into such an agreement.

So that I understand the art of negotiations, is there any reading you recommend?

Yes. The gold standard for the science of negotiations is written by two Harvard professors, William T. Fisher and Melvin C. Ury, Getting to Yes.

There is also The Tao of Negotiation by Joel Edelman and Mary Beth Crain. This book is based on the philosophy of Lau Tsu who wrote the Tao Te Ching in the sixth century, but despite its age, the book’s principles apply today.

A most practical book on negotiations is You Can Negotiate Anything by Herb Cohen. (See also Negotiate This! by Herb Cohen.) There are also books which have been written specifically on divorce settlements: The Joy of Settlement by Gregg M. Herman (American Bar Association Press) and Negotiating to Settlement in Divorce edited by Sanford M. Katz (Prentice Hall Law & Business) with a chapter by H. Joseph Gitlin, “Negotiating Settlement of Property, Alimony and Child Support.”

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