Talking about money with your client is awkward. You are trying to tap dance through the minefield of expectations, tamping down the client’s wildest hopes without offending him. If the client has a starry-eyed view of what his case is worth (on the high side for the plaintiff, or the low side for the defendant), they may be disappointed by what you have to say.
But even if the conversation is uncomfortable, it’s critical that you start it before the mediation. Mediation is much less likely to be successful if one of the clients undervalues or overvalues the case. Here’s why.
1. Too Much, Too Little: Either Way’s a Problem.
It may be obvious that if the plaintiff overvalues the case, the mediation is doomed. Since the plaintiff has a skewed view of the value, the plaintiff is going to turn down even a reasonable settlement offer.
But the plaintiff also can torpedo a good deal by having too low a view of the case — because the goal is not just to settle, but to reach a good and fair settlement. A highly risk-averse plaintiff may want to accept the first offer plopped on the table.
Likewise, if the defendant has a crazy-low view of the case value, the case clearly is not going to settle because the defendant is never going to put enough on the table to interest the plaintiff. But if the defendant overvalues the case, the defendant will be tempted to stack too much cash on the table, too fast.
Ideally, you want your client lasered in on a fair, reasonable value of the case, neither too high nor too low.
2. Helping Your Client Get to a Reasonable Value of the Case.
Coming up with a “final,” target number before mediation is like trying to clap with one hand; by definition, settling takes two parties. But before mediation, you can help your client understand what a reasonable settlement range might be, and what factors will affect that range. Even more importantly, you can make sure your client understands that you both will have to be flexible to account for information you learn during the mediation. As in all areas of litigation, you do not have complete control over your client’s assessment of the case value, or of you. But you can take specific steps to establish and increase the client’s trust in you, so that you can help the client rationally assess the numbers on the table at mediation.
In my next blog entry, I will be talking about the ways you can get your client ready to hear what you have to say about the case value — whether it’s good news, or bad.