Mediators often deal with plaintiff’s counsel who have very high opening demands. There are many times when the defense lawyers think they are wasting their time at mediation because the case is not worth anything close to the amount in the opening demand. Experienced mediators have come to realize that the amount asked for in the opening demand is at least three times what plaintiff’s counsel thinks the case may actually be worth. There are many reasons plaintiff’s counsel “anchor high.” The top three reasons for outrageous opening demands by the plaintiff’s counsel are listed below:
- To leave themselves room to negotiate and bargain with the other party
- To wait for the other side to make the first move
- To keep their client happy
Any good negotiator knows they should leave room to negotiate. In the mediation process, having a high opening demand allows the plaintiff’s counsel room to negotiate and bargain with the defense lawyers. Therefore, they will “anchor high” in an attempt to meet their client’s demands.
The second reason listed above for high opening demands is that the plaintiff’s counsel may be waiting for the other side to make the first move. Professor Howard Raifa of Harvard University found that the first number proposed during the mediation process that is not absurd or as high as the opening demand amount will often set the “reasonable zone of acceptance.” Therefore, waiting for the other side to make the first move may or may not always be wise. Plaintiff’s counsel will always try for a higher amount while defendant’s counsel will aim for a lower amount, but the party to establish the “reasonable zone of acceptance” first may be at an advantage. Making the first move should definitely not be considered a sign of weakness.
From the three reasons listed above for high opening demand amount, the third one is perhaps the most obvious. Lawyers want to please their clients by getting them the most amount of money. Plaintiff’s counsel never want their clients to think that they could have gotten more money from the mediation if they had asked. If the defense is offering $100,000, the counsel does not want their client to think the offer could have been $200,000 simply by asking for a higher amount in the first place. However, the mediator must not react to outrageously high or law offers made by each side. The mediator is expected to remain impartial and the best way to do so it to instruct the parties on how to negotiate and not make suggestions on the opening demand amount.