We have all heard clients say, “That is not fair.” The typical response when a lawyer or mediator hears “It’s not fair” is to say, “Fair is what happens in Dallas in October with Big Tex and the Texas Star Ferris Wheel, you need to be concerned about what is acceptable rather than what is fair.” I even wrote an article once entitled, Don’t Use the “F” Word. However, the customary response is not comforting or helpful to clients. In reality, if it is “fair”, it is “acceptable” and if it is not “fair”, it is not “acceptable.”
David A. Lax and James K. Sebenius discussed emotional perceptions in their book, 3-D Negotiation (Boston, Harvard Business School Press, 2006). A person’s perception of fairness is often more an emotional response, than a logical response. As Felix Rohatyn, the former managing partner of the investment banking firm Lazard Frères, observed, ‘Most deals are 50 percent emotion and 50 percent economics.'” 3-D Negotiation, p.73.
Lax and Sebenius state that there is a large body of research supporting the effect of emotion, ego and perceived fairness on negotiations. “Consider, for example, a simplified, one-shot negotiation extensively studied in laboratory settings-involving real money. One party is given, say, $100 to divide with another party as she likes; the second party can either agree to or disagree with the arrangement. If he agrees, the $100 is divided according to the first party’s proposal; if he doesn’t, neither party gets anything.” 3-D Negotiation, p. 73. Price logic implies that the first party should offer “$99 for me and $1 for you.” She gets as much as possible and the other party gets money he would not have otherwise received. Pure price negotiators predict the other side will agree to this unequal split because they are getting free money.
However, these experiments reveal that most people playing the role of the second party turn down proposals that don’t get them $30 to $40. The second party will forfeit the free money because of the perceived unfairness of the deal. “When the proposed split feels too unequal to us, we are offended on some fundamental level. We not only reject the buck (or its equivalent); we also set out to teach our greedy counterparts a lesson.” 3-D Negotiation, p. 73.
Therefore, we must pay attention to a client’s perception of and feelings about “fairness.”
Negotiation Tip: Supreme Court Justice, Oliver Wendell Holmes, when explaining the difference between intentional and unintentional torts said, “Even a dog can tell the difference between being stumbled over and being kicked.”