Thursday, September 15, 2011

I guess we can soon stop teaching negotiation skills

We've talked before about the rise of the lawyer-bots and the "hollowing out" of the legal profession whereby BigLaw partners get richer while software (not to mention offshoring and inexpensive online providers like Rocket Lawyer) threatens the livelihood of solos, small firm practitioners and associates in connection with many routine, bread and butter tasks like drafting wills and transactional work. E-discover software already does a better job at document review than flesh and blood lawyers.

In a similar vein, the blog "Associate's Mind" has posted a story suggesting that software will soon replace at least some of the negotiations now done by lawyers. For parties who agree to submit their dispute to a computer, a software algorithm can produce optimal settlement terms for both parties at a cheaper cost to clients because it obviates the need for attorney involvement

First, an excerpt from the Economist discussing "gaming" theorists who see the potential for the use of software in negotiations.

                      [T]here are also efforts to develop software that can assist in negotiation and                                               mediation…

Difficult negotiations can often be nudged along by neutral mediators, especially if they are entrusted with the secret bottom lines of all parties. Dr Clara Ponsatí’s [a Spanish academic] idea was that if a human mediator was not trusted, affordable or available, a computer could do the job instead. Negotiating parties would give the software confidential information on their bargaining positions after each round of talks. Once positions on both sides were no longer mutually exclusive, the software would split the difference and propose an agreement. Dr Ponsatí, now head of the Institute of Economic Analysis at the Autonomous University of Barcelona, says such “mediation machines” could lubricate negotiations by unlocking information that would otherwise be withheld from an opponent or human mediator.

Such software is now emerging. Barry O’Neill, a game theorist at UCLA, describes how it can facilitate divorce settlements. A husband and wife are each given a number of points which they secretly allocate to household assets they desire. The wife may inform the software that her valuation of the family car is, say, 15 points. If the husband puts the car’s value at 10 points, he cannot later claim that he deserves more compensation for not getting the car than she would be entitled to."

And an Associate's Mind take on it:

Two parties on opposite sides of the negotiating table merely need to assign value to their positions and let the computer do the rest. No pesky human emotions can get in the way. Is this the future of negotiations? Will people acquiesce to a computer handling and weighing the most intimate aspects of their lives and personal belongings?

To be honest, I think it is inevitable. Anyone under 30 years old, already implicitly trust computers with nearly every aspect of their lives. Need an answer to something? Let me Google that for you. Relying on a computer to objectively weigh a divorce will seem like a regular, perhaps even necessary step to younger generations.


What about beyond divorce? What about routine settlement negotiations that happen in every aspect of civil litigation. What if parties could merely input points of data at the beginning of filing a law suit, and let a computer decide what is a fair outcome? Would clients prefer that to years of discovery and legal bills, all purely for jockeying and better positioning during settlement negotiations?

Some might, some might not. It would likely depend on the value of the law suit. But regardless of whether clients choose to use such services, there are game theorists and computer engineers out there right now, working to make such an option a reality.

Continue reading here.


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Game theorists, computer engineers, and practicing lawyers have already made those options a practical reality. The system referenced in the article is the Fair Division system known as Adjusted Winner, which is already fully operational and which is offered and administered by Fair Outcomes, Inc. ( A recent empirical study of that system, conducted by academics who have no relationship whatsoever with Fair Outcomes, Inc., concluded that it “substantially” and “eminently” improves upon traditional approaches to negotiation. (See: Bloch, Katrin and Wagner, Ralf, ”Countering Negotiation Power Asymmetries with the Adjusted Winner Algorithm?” (March 7, 2011), available online via the Social Science Research Network: Readers that are interested in obtaining further information about that system or any of the other systems that we offer are encouraged to visit our website and to call or e-mail us via the contact information provided on that site.

Posted by: James F. Ring | Oct 12, 2011 1:07:49 PM

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