The Art of Resolving Disputes

The Art of Agreement is a series of unique perspectives from leaders and creators on the universal truths and tactics that get humans to agree. Check out the rest of the series:

• Reaching Agreement with Radical Candor - featuring Kim Scott, best-selling author

• Using AI to Reach Agreement - featuring Martin Rand, CEO of Pactum

Jennifer Lupo is an expert in turning disagreements into agreements. As a mediator who handles business-to-business commercial disputes and high-net-worth divorces, she has spent 20 years helping people settle their differences. How should two companies resolve a dispute when one alleges the other has violated the terms of their contract—but they still need to continue doing business together? How will a couple share custody of the kids after a divorce?

You can always go to court and litigate, but chances are the case will drag on for ages, and you’ll spend a fortune in legal fees—and then you’ll almost certainly settle the case out of court anyway. It’s faster and far less expensive to use mediation. That’s why mediation and other forms of alternative dispute resolution have become increasingly popular.

Lupo got hooked on practicing law when she was 15 years old and interning at her father’s criminal and civil rights law firm in Brooklyn. She has worked in the law firm, corporate legal departments as a general counsel and has been a law professor at Touro University and Marist College.

Her legal chops and ability to understand the facts of a case are only part of what goes into being a mediator. The job also involves a good understanding of psychology and a whole lot of empathy. For most people, negotiation and dispute resolution don’t come naturally. But Lupo believes that with some coaching and practice we all can learn how to do it.

In this conversation, Lupo offers some advice, and discusses the power of silence, the virtue of negotiating in person rather than by email, and why extremely smart people are often terrible negotiators.

This conversation was edited and condensed for clarity.

How did you become a mediator?

I started out as a litigator, and I was always trying to settle the case, looking for ways one claim or cause could be resolved—just because I was a realist, and I knew that so few cases ever go to trial. A judge in the Commercial Division of the New York State Supreme Court, in New York County had an opportunity to nominate two lawyers to take free mediation training through the New York State Bar Association, and I was one of the attorneys. The only thing I had to do was take three cases from the court’s panel every year. Eventually I stopped litigating because I enjoyed mediation so much and I saw the utility of it. It's useful. It teaches people how to manage their own dispute.

And most people probably aren’t very good at that.

As humans, we've been socialized to give our disputes over to somebody else to fix. First it’s our parents. You’re having a dispute with your brother, so you run to your mother and tell her, "He did X, Y, and Z." We don’t teach conflict resolution skills, and people don't learn it. That's why we have all the mess in our society at large. Mediation is an opportunity for participants to learn some skills and be empowered to make decisions for themselves. When you do that, you're more likely to also abide by it even if you don't love it. Nobody loves a settlement. No one. Because you didn't get everything you wanted. But often you get what you need, right? You learn the difference between want and need quickly when you're in a conflict.

How does mediation work?

For some bizarre reason, people think that mediators have so much power. I have zero power. I have one thing that I'm in charge of. I'm in charge of the process. I’m not a jury or a judge deciding. I ask attorneys who are representing clients in mediation to put on their “counselor at law” hat as opposed to being an advocate, because in mediation you're not acting as an advocate. You have given your client the advice that they need. They should understand the strengths and weaknesses of the case that they have, and you should be there to help guide them through the endless offers and counteroffers. I tell lawyers, you don’t need to bang your chest. That's not a good stance for negotiation. Telling somebody to do it your way, pointing a finger at them, most people don't respond well to that type of behavior.

I ask them to think about what their best outcome would be. If you went to trial and this went to verdict, in the last 18 months in this county where this claim would be brought, what are the jury verdicts looking like? The second thing I ask them to do is to sit with their clients and put together three lists. First, the things that you must have; next, things that you would like to have but you can live without; and finally, things you could care less about. I look at the lists from both sides and find places where I have agreement. I look at the must-haves and the deal breakers for each side, then those areas where you would like it but could live without it. I’ve had cases where people come to me and think they have 10 claims at issue, but when you lay it out, it really comes down to three. And this is fantastic. We’ve put seven away, and we only have three to deal with.

Do people make more of a conflict than there really is?

To be honest with you, I usually find there’s less conflict than people think. And more than 90% of the time, the case is not how the client presented it to their lawyer. Clients will marshal facts for sympathy. Some people like to be victims. Some people are dumb. Sorry, but that’s just the way it is and that’s the only word for it. They just don’t understand that this thing is not actionable, or that they have culpability.

I’m an advocate for early dispute resolution and risk assessment—working on the problem before people have time to get dug in on their positions. But people often don't want to do that. They don't want to think about the potential risks and pitfalls of their claim. It's counterintuitive for the legal practice, for litigators. Because you don’t get any money if you settle the case as soon as it comes in.

How do you get the two sides talking to each other?

Mediators have different modalities. We can be facilitative, evaluative, or transformative. In a facilitative modality we provide you with the structure and the forum for how you are going to have this conversation and we’re there to help guide it. We meet jointly and privately with the parties (caucuses) pushing and pulling them to be realistic.

Evaluative is something you see a lot of in cases in New York and California, where folks want the mediator to get in there and tell the other side that their case isn’t worth what they claim. I’ll evaluate the strengths and weaknesses. I’ll look at jury verdicts and see that in the past 18 months there were two cases like this one, and in one case the jury returned a verdict of $500,000, but in the other case the jury returned a verdict of $75,000. What’s your best-case scenario, and how much does it cost you to get there? What happens if you don’t get your best-case scenario? Are you going to appeal this? Here’s what an appeal will cost. And what’s the value of your time? The time you will spend living in this conflict, the time away from friends and family—that has a value.

The transformative modality is about working with people who need to have an ongoing relationship. For example, in a family business when people are having disputes, or in vendor relationships. In those disputes you don’t want to burn the house down, because you must go back tomorrow and work together.

Do you always do this in person? You get everyone in the same place at the same time?

Things don't get solved by an email or text message. People rarely read the entire text message or email. They're too busy eating lunch and taking notes, so you have everybody's quarter attention, and that's why negotiation stalls so quickly and people lose their way in negotiation. When you meet in person, people are uncomfortable. It's hard to tell somebody that they're a jerk when they're face to face. They might think it. Also, they’re inconvenienced. Even if you bring your laptop, you can’t really work on anything else. This forces people to recognize that their time has value, and maybe they shouldn't be taking as strident a position as they were taking before, because now they must put their time and potentially money, too, on the line.

A few years ago, I had a case where the two main lawyers had their offices in the same building in Miami. They’d exchanged a bunch of proposals and counterproposals by email. I happened to know that in their office building there was a Starbucks in the lobby. I ended up being flown to Florida and we all met in the conference room in that building. It took three sessions, but we got the case settled. I said, “So you guys never went to the Starbucks down in the lobby and had a coffee together and talked about this case?" They're like, "Oh, it didn't occur to us!”

So one lesson about the art of agreement is to stop using email and go sit down together?

The problem is dehumanization. If we keep dehumanizing one another in conflict, if we keep dehumanizing one another in just simple discourse—how do we bridge that gap? I do family mediation, custody, and visitation as a service to the court. I have people who at one point in time clearly were getting on with each other, because they have a child, and now they're not. Sometimes they refer to each other as the female, the male, the father, the mother, Ms. So-and-so, Mr. So-and-so. They're making every effort to dehumanize their co-parent. To what end? You need to work together. Your relationship ended, there's clearly hard feelings. But you have a kid who needs you to put that aside.

I'm constantly working with people to stop dehumanizing each other, to stop thinking the absolute worst. It's amazing to me, a lot of conflict comes from misunderstanding, not from people being nefarious. People start spinning things up and then they dig in their heels, and you have name-calling. I’ve seen this occur from the C-Suite in Fortune 500 companies down to the litigants in New York City Family Court. Human beings are human beings.

How do you address that dehumanization? Can you turn that around?

You must find a way to build a bridge. You must find some common ground. As a mediator, I'm constantly asking people about who they are—what kind of music they like, what kind of food they like. I'm trying to find common ground to build a bridge, because I'm going to have to give you bad news, and you better like me before I give you the bad news so you can hear it, and know that it is coming from someone you trust and accept that it is the truth of the matter.

Who are the most difficult clients?

It’s harder to deal with a person that has less sophistication. It’s also harder to deal with somebody who’s got a lot of education and thinks they’re the smartest person in the room—and they’re not necessarily the smartest person in the room, but they think that everybody else is an idiot. There can also be cultural competencies. In a case I’m doing now, I have two lawyers who think they’re the smartest people on the face of the earth on this case. One’s from New York and one’s from Los Angeles. Believe it or not those are very different cultures. And these two lawyers are different genders. So, I have gender politics, I’ve got arrogance, I’ve got it all going on in this one business to business dispute.

It's also challenging when you have people at the extremes in their personalities. Either people who are too passive, or people who are too combative. As a mediator, if you have somebody who's combative on one side and someone who is conflict averse on the other side, that is arguably the worst negotiation or mediation to deal with. Because you're managing these personality types while also trying to deal with the actual issues that have created a conflict. Sometimes it's people's personalities that create the conflict. Also, some people are too smart for their own good. People who are smart sometimes cannot function in a negotiation. They just can't—because they're so smart that they can't relate to everyone else.

Were you always a good negotiator?

No. I wasn't. In the beginning of my career, I thought I was good at it until I saw people who were really good at it.

What made them great?

I saw people that could sit in silence. I would shadow people, and I saw a few who just would sit in the silence to get people to start lifting the water for themselves. And I was like, "Oh, oh, okay. I get it now. I get it." You must be willing to sit in silence and sit in discomfort, and I wasn't capable of that. I wanted to fill every vacuum. Now I will sit in silence in mediation. It's uncomfortable for me. It's not something that I'm used to doing, but I sit in the silence. I've sat on arbitration panels where the fees approach $2,000 an hour for a lawyer and even more when you take the arbitrators’ fees into account, and we just sit there. Sometimes when you leave it with humans to get uncomfortable, they’ll say, "Okay, I don't like how I'm feeling, so to get past this, I have to make a decision."

What if you go up against someone who also knows how to be comfortable with silence, and now you have a standoff?

It happens, but not as frequently as you'd think. We'll recognize what's happening and we'll admit that somebody must blink. I don't know if it's age, or it's wisdom, I don't know what you want to call it, but you become a lot more collaborative along the way and less combative, because you recognize that this is like a giant chess match, and ultimately you need a resolution. Otherwise, things would never get resolved.

How can someone learn to be a better negotiator?

We all negotiate every day. From the minute we’re born, every day, all day, it’s a negotiation. A baby starts crying—that’s the negotiation with their parents to get what they need. You start crying, somebody comes running with food or a diaper or something, and that’s how we start. Then we start with the negotiation over how many cookies can you have after preschool and so on and so forth. However, we don’t talk about it as if it’s negotiation. We just do it. Some people are better at it than others, but it’s a skill that can be learned.

How do you get better? Especially if you’re someone who hates conflict?

You must know yourself. If you don’t like conflict, you build that into your expectations. You must practice. You have to role play. You can’t wing it. If you’re going to go ask for a raise, think back on what you've done in the last year or so and how that has brought value to your employer and what you would like to do going forward, some things that you would like to do, and that could potentially bring value to your employer. You want to make a business case to them for why they should give you a raise. It's uncomfortable. It is not intuitive, and it’s not easy. But if you practice, you can negotiate better.

I think a lot of us get defensive when someone disagrees with us.

I’ve taught myself to ask the question, "Why do you say that?" For example, I must ask for a fee, and my fee is not insignificant. When someone says my fee seems high, I’ve learned to just ask, “Why do you think that?” I don't ask with guile. I just want to understand where they are coming from. But I have yet to have somebody give me an explanation that moves me.

It seems like a lot of what you do involves acting almost like a psychologist.

Mediation is not linear. It's much like life. If somebody would just tell you when you are coming out of college that life looks more like a ball of yarn that a cat has made into a knot, and you're going to kind of spend your life trying to take that apart and get it to be straight, and then the day you get it to be straight is the day you die—that’s what people should tell young people as opposed to, go to college, go to professional school, work a couple of years, get married, have a couple of kids, you go back to work or you keep working, and blah, blah, blah. Nobody's life runs that way. Everybody's life that I know is just like a constant juggling act of negotiation, day in, day out, all day every day.

Your job also sounds exhausting.

Mediation is extremely physically and emotionally taxing. It does take a lot out of you emotionally. Sometimes your heart breaks because you see how it should resolve and it doesn't resolve that way. You know the information from both sides, and you know the deal could have been a little bit better for one side than they asked for. I can’t reveal that. That’s not my role. But for example, I’ll know the company is going to get sold next week and there's going to be a liquidity event, but they want to settle this case today and cut somebody out. There's a lot of information you receive that feels slimy being a part of it, but I remind myself, I didn't make that decision. It was going to happen whether I mediated the case or not.

You’ve been doing this for 20-plus years. Are you still learning and getting better?

I've taken training all over the country. I’m going to Oxford, England for three days to take training there. I want to see what they do in different countries. I want to hear from people outside of New York. I want to hear from people outside of law. I want to hear what psychologists have to say. I want to understand how the human brain works when it's under stress and in conflict. I want to work with people who are smarter than me, and I want to work with people who are increasingly more complicated to deal with than people were 20 years ago, because it keeps me on my toes.

What's the most interesting case you’ve ever mediated?

The first case I ever did. It was Woodstock 1999, the concert. They recreated Woodstock for its 30th anniversary. It rained, and the facility that was built got struck by lightning, it caught on fire, there were riots, there was looting, there was trampling of human beings and sadly, two people died. We had personal injury claims, we had wrongful death claims, we had the landowner suing over the destruction of the land. Plus, the municipalities were plaintiffs, along with nine insurance companies.

One insurance company had insured the food, and the claims examiner from that insurance company wanted to get into the weeds on how many bags of potato chips and how many hot dog buns had been purchased prior to the incidents. I was like, "Yeah, we can't do that. We'll be here for weeks. Let's just bottom line. The fire broke out and then the riot, right?” I wasn’t a great mediator, but I was tenacious. I just methodically went through it—we have X amount of insurance policies, X amount of money. It took three months, but we got it settled. But the guy with the hot dog rolls—he was so insulted.