Beyond Right and Wrong (eBook)

Randall Kiser is the principal analyst at DecisionSet®, a decision services and professional development company in Palo Alto, California. Mr. Kiser, a decision analyst and an attorney, has worked closely with litigants, insurers and attorneys in assessing risks, evaluating litigation alternatives and improving individual and organizational decision-making skills. He is the author of How Leading Lawyers Think (Springer, 2011) and the lead author of the widely read article, “Let’s Not Make A Deal: An Empirical Study Of Decision Making In Unsuccessful Settlement Negotiations” (Journal of Empirical Legal Studies, Vol. 5, No. 3, September 2008). Mr. Kiser received his law degree in 1978 from the University of California, Berkeley (Boalt Hall), and obtained his undergraduate degree in 1975 from the University of California, Davis (Highest Honors). His legal education is complemented by the award in 2002 of a certificate in leadership from the Peter F. Drucker Graduate School of Management, Claremont Graduate University.

Acknowledgements 5
Contents 6
Introduction 13
1.1 Purposes and Premises of this Book 15
1.2 Organization and Philosophy of this Book 16
1.3 What Attorneys Think About Other Attorneys’ Decision- Making Skills 18
Part I Evidence 20
Prior Research on Attorney-Litigant Decision Making 21
2.1 The Paradox of Copious Lawyers and Scant Data 21
2.2 Empirical Legal Research on Judge, Jury and Attorney Decision Making 25
2.2.1 Judge-Jury Agreement 27
2.2.2 Punitive Damages 29
2.2.3 Judges’ Assessments of Juries 29
2.2.4 Attorney-Jury and Attorney-Attorney Agreement 30
2.2.5 Attorney-Litigant Negotiation Positions, Assessments and Outcomes 30
2.2.6 Disparities In “Same Case” Evaluations and Outcomes 31
2.2.7 Comparisons of Predictions and Outcomes 32
2.2.8 Damages Award Predictions 33
2.2.9 Overview of Judge, Jury and Attorney Decision Making 34
2.2.10 Attorney-Litigant Decision Making in Actual Cases 34
2.2.11 Kiser, Asher and McShane Study of Attorney-Litigant Decision Making 37
2.3 Chapter Capsule 37
A Current Assessment of Attorney-Litigant Decision Making In Adjudicated Cases 39
3.1 The Fifty Percent Implication 41
3.2 New Data 42
3.2.1 The Four Datasets 42
3.2.2 VerdictSearch Publications 43
3.2.3 Case Database Selection Criteria 44
3.2.4 Attorneys in Dataset 45
3.3 Concepts and Definitions 46
3.3.1 Negotiation Disparities and Decision Error 48
3.3.2 Underpricing 49
3.3.3 Overpricing 49
3.3.4 Negotiation Disparities Without Decision Error 50
3.3.5 Effect of Negotiation Disparity on Decision Error 51
3.4 Overall California Results 52
3.4.1 Costs of Decision Error 52
3.4.2 Negotiation Disparities 54
3.5 New York Results 55
3.6 40-Year Historical Study 56
3.6.1 Historical Decision Error 56
3.6.2 Historical Cost of Decision Error 57
3.7 Attorney-Mediator Results 58
3.7.1 Attorney-Mediator Decision Error 59
3.7.2 Attorney-Mediator Negotiation Disparities and Settlement Rates 61
3.7.3 Tentative Conclusions About Attorney-Mediators 61
3.8 Predictor Variables 62
3.8.1 Context Variables Trump Actor Variables 63
3.8.2 The Five Major Context Variables 64
3.8.3 Two Secondary Context Variables 81
3.8.4 The Major Actor Variables 86
3.9 Chapter Capsule 95
Part II Causes 97
Psychological Attributes of Decision Errors 98
4.1 Perceptions of Adversaries and Conflicts 100
4.1.1 Fundamental Attribution Error 101
4.1.2 Selective Perception and Memory 106
4.1.3 Self-Serving Bias 111
4.1.4 Reactive Devaluation 113
4.1.5 A Practical Example Of Overcoming Self-Protective Biases 116
4.2 Evaluations of Risk and Reactions to Perceived Risk 117
4.2.1 Framing 120
4.2.2 Anchoring 124
4.3 Reactions to Threatened Changes in Position and Status 129
4.3.1 The Endowment Effect 129
4.3.2 Status Quo Bias 131
4.3.3 Overconfidence 133
4.3.4 Confirmation Bias 135
4.3.5 Representative and Availability Heuristics 138
4.3.6 Hindsight Bias 141
4.3.7 Discounting Of Future Payments and Costs 142
4.3.8 Sunk Cost Bias 145
4.4 Chapter Capsule 148
Institutional Impediments to Effective Legal Decision Making 150
5.1 Law School Education 152
5.1.1 Separation of Legal Education from Legal Practice 153
5.1.2 Testing Law Students’ Reasoning Skills and Moral Judgment 154
5.1.3 An Example of Law Student Decision Making 157
5.1.4 Deficiencies in the Case Method of Teaching 159
5.1.5 Attempts to Change Law School Curriculum 165
5.2 Law Firms 173
5.2.1 Conflicts Between Efficient Problem Solving and Billable Hour Requirements 175
5.2.2 The Consequences of Avoiding “The Big Picture” 178
5.2.3 “Due Process” and the Elevation of Process Above Results 181
5.2.4 Competitive Market Pressures, Undue Deference to Client Expectations and Inappropriate Client Involvement 183
5.3 Mental Impairment 191
5.4 The Disappearing Civil Trial 197
5.4.1 Settling Without Benchmarks 198
5.4.2 Causes and Motivations for Pre-Trial Settlements 201
5.5 Chapter Capsule 204
Part III Consequences 205
Legal Malpractice Liability For Settlement Counseling and Decision Errors 206
6.1 Malpractice Claims Data 207
6.2 Competing Policy Considerations 209
6.3 Malpractice Claims Arising from Settled Cases 211
6.3.1 Inadequate Advice Regarding Settlement and Trial Prospects 213
6.3.2 Client Coerced into Settlement by Attorney 216
6.3.3 Attorney’s Mistakes Prevented Client from Obtaining a Better Settlement or Prosecuting Case to Trial 218
6.3.4 Attorney’s Delays Caused Client to Forego More Favorable Settlement Terms 221
6.3.5 Conflict of Interest, Fraud and Collusion with an Adverse Party 222
6.3.6 Attorney Did Not Transmit Settlement Proposals to Client 225
6.3.7 Failure to Conduct Adequate Legal Research, Discovery and Investigation Before Settlement 226
6.3.8 Attorney Not Authorized to Consent to Settlement Agreement 230
6.3.9 Settlement Agreement Defectively Drafted 232
6.3.10 Client Misunderstood the Settlement Agreement 233
6.3.11 Failure to Advise of Uncertainty of Law and Anticipate Judicial Error 234
6.4 Malpractice Claims in Adjudicated Cases 238
6.4.1 Attorney Remiss In Failing To Initiate Settlement Negotiations, Solicit A Pre- Trial Settlement Offer Or Otherwise Effectuate Settlement 239
6.4.2 Client Inadequately Apprised of Risk of an Adverse Verdict 242
6.5 Defenses to Settlement Malpractice Claims 244
6.5.1 The Client’s Consent Bars a Challenge to the Adequacy of the Settlement Agreement 245
6.5.2 The Client’s Ratification of the Settlement Agreement 247
6.5.3 The Client’s Failure to Prove Reliance on the Attorney’s Advice 247
6.5.4 The Judgmental Immunity Rule and the California Model Limitations 248
6.5.5 The Client Cannot Prove Damages Proximately Caused by the Attorney’s Negligence 250
6.5.6 Another Attorney’s Negligence as an Intervening or Superseding Cause 252
6.5.7 Reduction of Malpractice Awards by the Amount of Attorneys Fees the Client Otherwise Would Have Paid the Attorney 253
6.6 Chapter Capsule 254
Ethical Implications of Attorney-Client Counseling and Decision Making 256
7.1 A Profile of Disciplinary Actions 257
7.2 The Duty to Communicate all Material Facts and Events to Clients 259
7.3 The Duty to Exercise Independent Judgment and Render Candid Advice 264
7.4 The Duty to Provide Adequate Advice to Enable Clients to Make Informed Decisions 267
7.5 The Duty to Identify and Protect Clients with Diminished Capacity 269
7.6 The Duty to Competently, Independently, Diligently and Expeditiously Represent Clients 273
7.7 The Duty to Abide by Client Decisions 277
7.8 The Duty to Prevent Conflicts of Interest in Aggregate Settlements 279
7.9 The Duty to be Candid and Truthful in Communications with Clients, Opposing Counsel and the Courts 281
7.10 Chapter Capsule 286
Part IV Solutions 287
Obstacles to Becoming an Expert Decision Maker 288
8.1 Defenses and Barriers to Sound Decision Making 289
8.1.1 Defenses to Learning 290
8.1.2 Distortions of Reality 293
8.1.3 Attorney Belief System Defenses 298
8.2 Myths and Misconceptions About Decision-Making Expertise 300
8.2.1 Intelligence 301
8.2.2 Education and Experience 303
8.2.3 Peer Ranking 307
8.2.4 Intuition 308
8.3 Chapter Capsule 312
Personal Expertise in Legal Decision Making 314
9.1 Phase One: Finding 315
9.1.1 Still the Messenger 316
9.1.2 Bottom-Up Decisions Beat Top-Down Decisions 316
9.1.3 Challenge Your Perceptions 318
9.1.4 Give Vivid Pictures Time to Fade 319
9.1.5 Credit Randomness its Due 320
9.1.6 Deal with Attribution Errors Early 321
9.1.7 Diversify the Team 322
9.1.8 Time Does Not Take Sides 323
9.1.9 Align Client Objectives and Attorney Incentives 324
9.1.10 Consider Appointing Separate Settlement Counsel 326
9.2 Phase Two: Binding 327
9.2.1 Start with Ideals 328
9.2.2 Switch Sides to Debias Judgment 329
9.2.3 Think Divergently 330
9.2.4 Stop Pattern Matching 331
9.2.5 Work Well with Others 332
9.2.6 Consider Whether a Litigation Attorney or a Trial Attorney is Required 333
9.3 Phase Three: Solving 335
9.3.1 Don’t Follow Your Gut 335
9.3.2 Search for Disconfirming, Discrepant Facts 337
9.3.3 Pay Attention to Base Rates 338
9.3.4 Prepare to Justify Your Case 339
9.3.5 When in Doubt, Act it Out 340
9.3.6 Step Off the Information Treadmill 341
9.4 Phase Four: Testing 342
9.4.1 Find Your Inner BATNA 343
9.4.2 Separate Facts from Theories, Values and Beliefs 344
9.4.3 Enlarge the Pie Before Cutting 345
9.4.4 Subjective Fairness Matters 346
9.4.5 Think and Communicate Affirmatively 347
9.4.6 Depressed People Make Depressing Deals 348
9.4.7 Fatigue Stifles Creative Problem Solving 349
9.4.8 Use Email Carefully 350
9.4.9 Get a Grip on Mongo 352
9.5 Phase Five: Choosing 353
9.5.1 Perform a Premortem on Overconfidence 354
9.5.2 Take the Outside View 355
9.5.3 Keep Positions Aligned with Facts 356
9.5.4 Separate the Primary Decision from the Secondary Decision 358
9.5.5 Assumptions Were Made to be Explicit and Tested Continuously 359
9.5.6 Walk Around the Sunk Cost Trap 359
9.5.7 Past Performance is no Guarantee of Future Results 360
9.5.8 Funny Things Happen on the Way to the Forum 361
9.5.9 Linear Thinking Leads to Impasse 362
9.5.10 Appeals are Part of the Settlement Equation 363
9.5.11 Moderate the Mediator 364
9.6 Phase Six: Checking 367
9.6.1 Pin Yourself Down for Some Real Feedback 368
9.6.2 Don’t Just Provide Feedback – Discuss it 369
9.6.3 Learn from Surprises 370
9.7 Chapter Capsule 371
Group Expertise In Legal Decision Making 372
10.1 Deficiencies in Group Decision Making 373
10.1.1 Elements of Defective Group Decisions 375
10.1.2 Group Polarization and Groupthink 376
10.2 Characteristics of Effective Decision-Making Groups 381
10.2.1 High Reliability Organizations (HROs) 382
10.2.2 Expert Teams 388
10.3 Steps to Improve Group Decision Making 390
10.3.1 Ask For Multiple Opinions 390
10.3.2 Cross-Pollinate the Team 391
10.3.3 Proliferate Team Leaders 392
10.3.4 Appoint a Devil’s Advocate 394
10.3.5 Seed the Brainstorm 394
10.3.6 Promote a Good Fight 396
10.3.7 Build Trust 397
10.3.8 Reach a Consensus, Don’t Build One 399
10.3.9 Schedule a Last Clear Chance Meeting 400
10.4 Chapter Capsule 401
Peer Review, Client Evaluations and Law Firm Audits 402
11.1 A Brief History of Quality Management in Law Firms 404
11.2 Peer Review in the Medical Field 405
11.2.1 The Inception of Medical Peer Review 406
11.2.2 The Modern Medical Peer Review System 407
11.2.3 Confidentiality of Medical Peer Review 408
11.3 Peer Review in Law Firms 409
11.3.1 Priorities in Law Firm Peer Review 409
11.3.2 Confidentiality of Attorney Peer Review Proceedings 410
11.3.3 Professional Ethics and Attorney-Client Privilege 412
11.3.4 The Role of Confidentiality in Peer Review 415
11.3.5 The Structure of Law Firm Peer Review 417
11.4 Client Evaluations 418
11.4.1 Challenges of Evaluation Design and Analysis 419
11.4.2 Sample Questions to Probe for Decision-Making Skills 423
11.5 Assessments and Audits 424
11.6 Chapter Capsule 427
Conclusion 429
Appendix: Primary California Dataset Variables 434
A.1 Awards 434
A.2 Settlement Demands and Offers 434
A.3 Case Type 435
A.4 Parties 435
A.5 Attorneys 436
A.6 Nature of Damages 436
A.7 Nature of Alleged Wrong 437
A.8 Forum 437
A.9 Section 998 Offers of Compromise 437
A.10 Insurance 437
A.11 Offer/Demand Ratio 438
A.12 Pre-Trial Dispute Resolution Procedures 438
Index 439