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How to Bracket the Way to Compromise

Bracketing is a technique for establishing a zone of potential agreement in mediation — an upper and lower limit between which the parties are willing to negotiate. Bracketing moves the parties closer to the true gap and makes bridging that divide seem far more attractive and possible.

You “bracket” for the parties or solicit a bracketed offer or counteroffer by suggesting that Party A put $X on the table if Party B will agree to accept $Y in settlement. For example, if the parties are stuck at $100,000 (defendant) and $200,000 (plaintiff), a bracketed offer or proposal might look like this:

If the defendant will offer $130,000, would the plaintiff be willing to reduce her demand to $170,000? If the parties are willing to do so, the gap is narrowed from $100,000 to only $40,000. The parties also have broken the barrier of round numbers beyond which they’ve previously pledged not to venture.

Through bracketing, you:

  • Test the distance between the parties’ true bottom lines without requiring them to reveal their bottom lines to each other.

  • Encourage the parties to continue negotiating. You make the gap smaller and give them hope of bridging it.

  • Protect the parties from anchoring the next round of negotiations too high or too low. When the parties have some idea of the actual range in which their negotiating partners are really in, they’re far less likely to present extreme offers.

Try bracketing in any of the following ways:

  • Ask the parties to suggest a bracket within which they’d be willing to continue negotiations. I like this method best because it encourages the parties to take ownership of the range. You can do this either in a joint session or in a separate caucus, but if you’re using bracketing, the parties are likely to be negotiating in separate caucus, in which case you’re usually better off seeking out these brackets separately, even if they’re not yet negotiating in separate rooms.

  • Tell the parties how far apart they really are. Based on their previous offer and counteroffer, they may think the gap is huge. If you know, through separate caucuses, each party’s true bottom line, you can state the size of the gap (for example, “You’re a hard $100,000 apart.”) without revealing their bottom lines.

  • Tell the parties that although both are willing to make further compromises, because they’re so far apart, neither is willing to put another number on the table today. This alone often emboldens one party or the other to move down or up to a small degree to restart stalled negotiations.

  • Suggest a hypothetical set of offers and counteroffers. For example, you might ask, “If the plaintiff came down to $X and the defendant came up to $Y, would you both be willing to negotiate in that range?”

When developing brackets, avoid these costly bottom line blunders:

  • Never ask for a party’s true bottom line. Knowing the bottom line anchors you and may tempt you to drive the negotiation toward that bottom line.

  • Never allow a party to tell you his bottom line if he seems poised to do so. Revealing the true bottom line locks the party into a position from which he may not be able to extricate himself.

  • If you believe you may know one party’s bottom line, never tell or signal to the other side what it is. A bottom line is like blood in the water. The sharks sense it and move in for the kill.

First do no harm. Revealing a party’s bottom line limits her bargaining range and her ability to change her mind. Your goal is to establish a range of reasonability without having either party reveal her true bottom line.

If you can’t stop a party from telling you her bottom line, that bottom line almost requires the party who asserted it to walk away from the negotiation when that line in the sand is reached. At this point, you need to do your best people work, often helping the attorney and his party save face (credibility and respect).

In an example, the claimant’s most recent demand is $1.2 million, and the respondent’s most recent offer is $650,000, representing a gap of $550,000. Neither party believes the other will compromise enough to justify further negotiations. The mediator knows from what each party has told her in separate caucus that the plaintiff would settle for $900,000 and the defendant is willing to pay $800,000. From her point of view, the parties are a hard $100,000 apart — a much more bridgeable gap.

The challenge is to let the parties know they have a smaller gap to bridge than they think they have without divulging each party’s true bottom line. In this particular scenario, using the bracketing methods, the mediator could

  • Ask the parties to suggest a bracket within which they’d be willing to negotiate.

  • Tell the parties they’re a hard $100,000 apart. They won’t think the gap is $800,000 to $900,000. Instead, they’ll think it means the plaintiff is willing to accept $1.1 million ($100,000 less than the plaintiff’s last demand) or $750,000 ($100,000 more than defendant’s last offer). Either way, the smaller gap encourages the parties, hopefully enough for one of them to make a more reasonable offer or demand.

  • Tell the parties that although both are willing to make further compromises, because they’re so far apart, neither is willing to put another number on the table that day.

  • Suggest a hypothetical set of offers and counters by asking one or both parties, “If the plaintiff came down to $1 million and the defendant came up to $750,000, would you both be willing to negotiate in that range?” In response to a question like this, the parties always divide by 2 because they believe she is suggesting that they split the difference to settle the case:

            $1,000,000 + $750,000 = $1,750,000 @@ds 2 = $875,000

    which is pretty close to what the mediator knows the defendant is willing to pay.

Nine times out of ten, bracketing breaks impasse and often settles the case. It is highly recommended.

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