Negotiation Blunders: Allowing Yourself to be Double-bracketed
Examine how an adversarial demand from 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.
The technique is quite straightforward. The side that wishes to start bracketing begins by establishing the amount of money it wants to use as a target to settle the case. The bracketer then assumes a “counterpunch” strategy, allowing the other party take the initiative. Often referred to as ‘dropping an anchor’ at the Aspirational level, in most negotiation training courses.
For example, suppose plaintiff’s counsel is looking at $500,000 in settlement of an action, and defence 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 defence’s position, which at that moment has nothing on the table, and then demands $1 million. The average of the zero position of the defence 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 defence 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 defence 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 defence tires of playing the game. This is bracketing, and it should be familiar to anyone reading this article.
Double-bracketing, however, is the negotiation counterpart of “double dipping.” It can creep up on either side. In a bracketing-based negotiation, the first party to initiate double-bracketing will successfully preclude the other party’s use of the technique.
Take the same example as before: a desired settlement of $500,000 with the defence replying to the $1 million demand with an offer of $150,000, and the plaintiff lowering the demand to $850,000. Let us assume that the sequence continues with the defence raises its offer to $200,000, and the plaintiff reducing its demand to $800,000, continuing the bracketing. Assume the defence then offers $300,000. To continue the bracketing, the plaintiff would lower his or her demand to $700,000, so that the demand and the offer add up to $1 million, and still yielding an average of $500,000.
At this point, plaintiff’s counsel might notice some irritability seeping into the defence’s negotiations. The defence may attempt one more time to settle the case by making a token increase, perhaps to $325,000. At this point, the plaintiff can continue the bracketing, abandon it altogether, refuse to go lower, or press the issue by utilising 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 it. That is 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 it is going to move the settlement point below the figure you initially targeted.
This technique will either heavily favour the side who is 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. It is critical to understand when, if ever, you should employ it.
First of all, you can’t utilise 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 three scenarios:
- When the mid-point of the bracketed negotiation is their choice, but is not yours, and is 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; or 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. There are apparent risks and benefits to the use of double-bracketing. The two primary risks are that you may upset your adversary by appearing to be too “slick,” and 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.
Advanced Negotiation Training
Contract Negotiation Training