Given the title — and timing — of this month’s edition, you may be expecting a political rant from me. Sorry to disappoint you, but I try very hard to limit my political rants to my Facebook page! 😂😂
Instead of focusing on the historical and political significance of the traditional concession speech, and the vital role it plays in the peaceful transfer of power in an efficacious democracy, my focus is on what the literature refers to as a “consecutive unreciprocated concession” — colloquially known as “bidding against oneself.”
Every so often, even the most skilled negotiator can paint himself/herself into the proverbial corner, leaving what usually amounts to one of two options: (1) bid against oneself or (2) opt not do so, potentially resulting in a premature and perhaps unnecessary impasse.
If those are the only viable options, my advice is to consider “the concession speech.”
As I’ve written on more than one occasion, those involved in the negotiating process must cooperate with one another — even as they compete with one another — to reach a resolution. Sometimes, a party makes the mistake of undermining cooperation by becoming overly competitive, i.e., making a demand or offer which, though designed to maximize that party’s bargaining position, is viewed by the opposing party as being so extreme and outrageous as to not merit a response.
Once cooperation has been undermined, I’ve found that the surest way to reestablish cooperation is to accept responsibility for having been overly competitive and to make a further concession.
The concession speech can take many forms. It can range from the humorous [“believe it or not, sometimes that actually works”] to the contrite [“that move was an unfortunate mistake on my part”] to placing responsibility elsewhere [“my client insisted”], but it must sincerely communicate a desire to reestablish cooperation and engage in further negotiations.
Contrary to popular belief, the concession speech – when handled correctly – does not weaken your bargaining position. In fact, bidding against yourself can sometimes strengthen it.
Three examples:
(1) In a personal injury case I mediated several years ago, counsel for plaintiff was confronted with information which seriously called into question his client’s credibility. Despite having made a pre-mediation demand in excess of $200,000, to which defense counsel had never bothered to respond, plaintiff’s counsel — to his credit — recognized he had no choice but to bid against himself in order to reestablish his own credibility. Following a difficult discussion with his client, he authorized me to reduce his demand by nearly 85%. By doing so, he immediately gained even greater credibility with defense counsel and the claim representative, who — to their credit — proceeded to go beyond their original settlement authority in order to reach a resolution.
2) In another case I mediated years ago, counsel for plaintiff served a Mediation Brief on defense counsel with a $1,000,000 opening demand. During my initial conversation with counsel for plaintiff, I asked him how he thought the other side would react to his opening demand. He acknowledged defendant would think it was too high and probably respond with a very low offer, “maybe $5,000.” When I suggested he might want to consider reducing his opening demand, he predictably balked.
As we talked further, he acknowledged that his paralegal had prepared the Mediation Brief and had served it before he had a chance to review it. I asked what he would consider to be a reasonable opening demand and he told me $500,000. We talked a bit further about the possible benefits of reducing his opening demand. He authorized me to present a revised opening demand of $495,000. He also authorized me explain and apologize for the error in the brief
Defendant was thrilled that plaintiff had reduced the opening demand. To show its appreciation, defendant responded with an opening offer of $50,000 — even though liability was hotly contested. Three moves later, the parties reached a resolution. I remain convinced to this day that by reducing the opening demand, plaintiff obtained a better settlement than would otherwise have been likely.
(3) In a case just last month, where plaintiff and defendant had differing views about a particular legal principle, I suggested a brief “joint session” between counsel to discuss their differences. Following the discussion, counsel for plaintiff reconsidered his position and reduced the demand.
There are other benefits that may flow from bidding against oneself. Those with the confidence to do so may have greater credibly when they later indicate they have reached their “bottom line.” Similarly, those willing to bid against themselves are sometimes able to extract greater concessions from their opponent toward the end of the negotiating process, by reminding their opponent of the “consecutive unreciprocated concession” made earlier.
When the choice comes down to bidding against yourself or having to engage in an unwanted trial, the concession speech may prove to be a winning strategy.
As always, It would be my pleasure to assist you and your clients in the dispute resolution process. Please don’t hesitate to contact me if I can be of service.
Best regards,
Floyd J. Siegal