Negotiation Bracketing: How To Use It and When To Avoid It
Examine how an opponent may try to use their opening position to split the difference and always target a single figure. Learn how double-bracketing is used in a settlement negotiation.
If you’re a plaintiff’s attorney, you have likely participated in a bracketing-based negotiation at some point in your career. Either side of a negotiation may use bracketing, one of the oldest and most simplistic negotiation ploys.
Bracketing Technique in Negotiation
The technique is quite straightforward. The side that wishes to start bracketing begins by establishing the amount of money they want to use as a target to settle the case. The bracketer then assumes a “counterpunch” strategy, allowing the other side to take the initiative. This is often referred to as “dropping an anchor” in most negotiation training courses.
Negotiation Bracketing Example
For example, suppose plaintiff’s counsel is looking at $500,000 in settlement of an action, and defense counsel has requested a preliminary demand to get the negotiation started. With $500,000 as the target settlement figure (as well as a fair and reasonable one), plaintiff’s counsel assesses the defense‘s position, which at that moment has nothing on the table, and then demands $1 million.
The average of the zero position of the defense and the $1 million position of the plaintiff is the $500,000 that plaintiff’s counsel desires. If, in reply to the million-dollar demand, the defense were to respond with an offer of $150,000, then plaintiff’s counterpunch would be to lower the plaintiff’s demands to $850,000, so the sum of the defense position and the plaintiff’s position still adds up to $1 million and the average of the two positions is still $500,000.
This tactic has nothing whatsoever to do with respect to the real issues of liability or damages on the case. Nor does it entail any cognitive evaluation process to determine whether the desired $500,000 is, in fact, a realistic figure.
Nonetheless, plaintiff’s counsel, in this hypothetical example, could persist with this technique until either the case is settled or the defense tires of playing the game. This is bracketing, and it should be familiar to anyone reading this article.
Double-Bracketing Technique in Negotiation
Double-bracketing is the negotiation counterpart of “double-dipping.” It can creep up on either side. In a bracketing-based negotiation, the first side to initiate double-bracketing will successfully preclude the other side’s use of this negotiation technique.
Take the same example as before: A desired settlement of $500,000 with the defense replying to the $1 million demand with an offer of $150,000, and the plaintiff lowering the demand to $850,000. Let’s assume that the sequence continues with the defense raising its offer to $200,000 and the plaintiff reducing its demand to $800,000, continuing the bracketing.
Assume the defense then offers $300,000. To continue the bracketing, the plaintiff would lower their demand to $700,000. In this way, the demand and the offer add up to $1 million and still yield an average of $500,000.
At this point, plaintiff’s counsel might notice some irritability seeping into the defense‘s negotiations. The defense may attempt one more time to settle the case by making a token increase, perhaps to $325,000. Here, the plaintiff can continue the bracketing, abandon it altogether, refuse to go lower, or press the issue by utilizing double-bracketing like this: “Mr. Defendant, it is becoming clear to me that you have the figure of $500,000 in mind. After all, following each round of negotiation I find that the average of our two positions always ends up at $500,000. Look: I can’t settle this case for $500,000. But my demand is $700,000, and if $500,000 is your target, let me propose that, if you were to offer $600,000, which would be midway between the $500,000 and the $700,000, I would be willing to recommend that figure to my client.”
That’s really all there is to double-bracketing. It simply stops the bracketing and permits you to move the settlement point up closer to your figure. Of course, if the defendant takes the initiative on double-bracketing first, then that will move the settlement point below the figure you initially targeted.
When to Use Double-Bracketing
The technique of double-bracketing will either heavily favor the side that’s first to use it, or result in a breakdown in the negotiations. Either way, the use of double-bracketing usually leads to the conclusion of the negotiation. So, it’s important to know when to employ the technique.
First of all, you can’t utilize double bracketing until you find yourself in the middle of a bracketing-type negotiation. At that point, you might want to resort to double-bracketing in any of these scenarios:
- When the mid-point of the bracketed negotiation is their choice and not yours. In tandem, it’s too low for you to accept.
- When you think that they have sufficient money to settle the case but are taking too long in getting around to offering it. Alternatively, when you feel the need to halt the arbitrary bracketing-type of negotiation and get to actual issues.
You must also be prepared when you find that your adversary is trying to double-bracket you. Your approach? Focus on the technique, not the offer. Go ahead and say: “You know, rarely have I been double-bracketed with such skill. However, that’s not my figure (the double-bracketed mid-point) and is, in fact, an arbitrary mid-point that appears to have been generated by your responses to my demands. I thought the movements in my position were large enough to show my good faith intent to give you room to move toward a resolution. You, instead, have presumed that I am involved in bracketing you. That is not the case, so why don’t we stop this and get to substantive issues?”
If you deliver this message with a light touch, the negotiation may very well proceed. The key here is not to insult your adversary by your recognition of his or her attempt to double-bracket you.
Benefits of Using Double-Bracketing
There are apparent risks and benefits to the use of double-bracketing. One primary risk is that you may upset your adversary by appearing to be too “slick.” The other primary risk is that you may short-circuit the negotiation process. The benefits of appropriate use of this tactic are that it:
- brings the issues to a head quickly, and
- can help, in some cases, to smoke out the position of your adversary.
As a general principle, however, you should attempt to find more creative approaches to negotiation than bracketing. Perhaps the largest benefit to double-bracketing is that it can put a stop to bracketing as a primary negotiation technique.
Richard G. Halpern, is President of The Halpern Group.