The Art of Negotiation: Client Goals and Settlement Authority

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Very few things—if anything—come easy as a young attorney. Learning to effectively manage your time, obsessing over work at all hours, and dealing with difficult opposing counsel are just a few of the land mines.

Another tricky skill for young litigators is negotiation. The first step of successful negotiation is simple, but critical: figure out your client’s goals and how much settlement authority you have.

What Does Your Client Want and Do They Have Reasonable Expectations?

Do not assume that your expectations are the same as the client.

Every case is different—the facts, the client, and what the client wants. Some clients want money. Some clients want an intangible. Other clients want their day in court and the opportunity to present their situation to a judge or jury. Many clients want some combination of all of those things.

Before taking any action on your client’s behalf, spend time figuring out what they want. First, if your state has adopted Model Rule 1.2 or has a substantially similar ethics rule, you are required to do so.

[A] lawyer shall abide by a client’s decisions concerning the objectives of representation and, as required by Rule 1.4, shall consult with the client as to the means by which they are to be pursued. A lawyer may take such action on behalf of the client as is impliedly authorized to carry out the representation. A lawyer shall abide by a client’s decision whether to settle a matter.

Second, it’s tough to figure out how to obtain your client’s goals if you don’t know what they are. Think of it this way: until you know the destination, you cannot possibly drive the bus to the right place.

What you think is a good outcome and what your client wants can be two different things. If you do a good job choosing clients, and counseling them, those two goals should be very closely aligned. If there is a huge gap between those two goals, you should pause before taking the case.

If the client’s expectations are unreasonable, it is your job to either reset those expectations or tell the client to find another attorney.

Do not presume that a client with unrealistic expectations will simply fall into line once the case gets moving. If anything, the momentum and experience of litigation will tend to heighten client expectations, not dampen them.

What Is Your Settlement Authority—if Any?

Lawyers decide on strategy. Clients decide on settlement. Never forget that.

If you have not been given settlement authority, your client has to make the final decision, not you. And remember that there is a difference between your client’s explanation of their goals and your ability to accept an offer meeting those goals.

For example, a client may say something like “If we can resolve this quickly, I’d be fine walking away with something around $5,000.” There are at least three gray areas there. “Quickly” to you, and “quickly” to your client may mean two very different things. When your client says “I’d be OK,” you need to make sure that means “satisfied and pleased” versus “begrudgingly accept.” Lastly, “something around $5,000” is as clear as mud.

It’s the same thing with making a settlement demand. If you have any doubt about your authority to make an offer (even if you are posturing), check with your client first. Even if you think your demand is outrageous, or unlikely to be accepted, you may not know all the facts. The other side may be more motivated to settle than you think. In other words, your first “pie in the sky” offer could always be accepted.

I have seen opposing counsel make this mistake with devastating consequences. The other side made an offer that was too good to refuse, and my client accepted. The offer was too good because it apparently had not been authorized by the opposing party. At the end of the day, opposing counsel, not the opposing party, had to provide a portion of a settlement.

As an added precaution, confirm your authority in writing and make a note of it: “I’m following up on our phone call from today. It’s my understanding that you wish to reject the offer of $5,000 and make a counteroffer of $10,000. Please confirm my understanding is correct, and I will then make the offer.”

You need to be 110% clear about your ability to make and accept offers on behalf of your client because it is their case and they have to live with the outcome. And if you screw that up, that outcome may impact your wallet.

Do You Want Settlement Authority?

Just like every client has different expectations and goals, deciding to ask for partial or complete settlement authority is completely client- and case-dependent.

If you have a repeat client that you know well, that could be a good situation to request partial or full settlement authority. Repeat clients may even tell you, without your prompting, that you have complete settlement authority.

On the other hand, if you have a new client that has never been part of a lawsuit, you may want to run every offer and counteroffer by them. Do this even if they tell you “I trust you, whatever you can get is just fine with me.” It’s amazing how that statement can still lead to complaints such as “Why didn’t you get more?” and “Why did you pay that much?”

Clients tend to stay more engaged in their case and are generally more happy with the results when they are active in settlement discussions. It also helps them develop more respect for your work.

A lack of settlement authority can also be useful when dealing with opposing counsel. In opposing counsel’s mind, every offer is a legitimate and fair offer. If you don’t accept it, they consider you irrational. But, if you don’t have complete settlement authority, you can simply say your client has rejected the offer. You can add whatever language you like: “My client does not feel that offer is acceptable because of ____” or “My client appreciates the offer, but feels that ____.”

This is not an excuse to throw your client under the bus. To say “Well, I think it’s reasonable, but my client has rejected it” is breaching your duty and driving a wedge between you and your client. It’s also a wedge that opposing counsel will instantly recognize and seek to take advantage of.

Next Up: Figuring out Your Opponent

Negotiation is a complex beast. Once you know your client’s goals and have discussed settlement authority, you are ready for step 2: learning your opponent.

Originally published 2012-04-03. Last updated 2016-09-15.

More in this Series: The Art of Negotiation


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  • It’s critical to know what your client wants, and it’s not always obvious, even if you ask. I took a case a couple of years ago where a couple were suing their landlord. In mediation, I finally got to see the wife talking about the landlord, and it was clear that she thought he was nice and handsome, and she had a very obvious crush on him.

    The husband, who was pudgy and strong, clearly felt threatened, and I realized that (a) his wife didn’t want to sue the landlord in the first place; but (b) the husband really just needed to get one up on the landlord.

    Our claims, it turned out, weren’t as strong as we thought, and I intuited that all the husband really needed was a check from the landlord—in virtually any amount—that would be proof that he won. He needed to kick sand on the hunky beach bully, for a change.

    It worked, we settled quickly, and everyone was reasonably happy.

    • Great story. I think it highlights the importance of revisiting your client’s goals—because many times they change during a case. What sounded like a good outcome during the initial client meeting may no longer be the case.

  • My experience has been that the client’s expectations are one of the most important things in the case, particularly so in personal injury. It’s critical to understand that at the outset as it will shape the case. From’s a Plaintiff’s perspective, client expectations are right up there with liability and damages. If the potential client is too unreasonable and won’t listen to counsel, think hard about accepting the case.

  • Simpleman

    Usually I find out what the client’s bottom line is, then get their permission to wheel and deal to get them there. That way I don’t have to bother them with every counteroffer and argument. Most are ok with this, and it saves me a lot of time explaining the nuances and strategy. If you’re mediating or arbitrating though, they are generally sitting right beside you the entire time, so you don’t have that option, but you get to explain each move in real time which also works just fine.