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In Place of Strife

The Mediation Chambers

Calibrating an opening offer

My friend, Ralph O Williams III, is a very busy mediator in Los Angeles. I was particularly taken by this tip which he sent me, because it so admirably articulates what I often find myself suggesting to parties who need assistance with negotiation strategy.

"Calibrating Your Opening Offer

When trying to determine your opening offer, whether plaintiff or defense, you should consider the following three factors:
  • Your opening offer must be rationally related to what might happen in the case. Every case has a reasonable range of value; as the plaintiff you will probably open at the high end of the range. The defense usually opens in the low end.
  • Your opening offer must engage the other side. In other words it has to make them want to negotiate with you. If you are too far "out of the ball park", you either get no response, an equally "out of the ball park" response or a termination of the negotiation.
  • Because this is a negotiation, the opening offer must leave you room to move. When you attend a mediation, in all but the most unusual circumstances, people expect to negotiate.

Note the three considerations are in tension with each other and must be weighed and balanced together, e.g., as the plaintiff, you could open with a very high offer that leaves plenty of room to move, but may not be rationally related to the case's outcome and therefore not engage the other side. The converse is true for the defense."

Wise words!

Mediator: Mark Jackson-Stops



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