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Bar News - April 4, 2008


Emotion Should Have a Place when Solving a Business Dispute

By:

If I had a dollar for every time Iíve heard someone involved in a business conflict say "letís keep the emotion out of this" I would be a wealthy man indeed. To my amazement, there are plenty of people in the business world who still believe that emotion ought to be locked out of the room when parties sit down to settle a dispute. Iím not sure whatís more amusing: that people believe emotion ought to be kept out of the discussion, or that it can be kept out of the discussion.

In my experience lawyers can be among the most ardent believers in this notion. Most of us were taught early on in law school that the law had little room for emotion. Trial lawyers learn that clients get angry, and that the process flows most smoothly when they are kept insulated from one another. In some instances, the first time the parties sit in the same room after the case begins is at trial. Business lawyers, on the other hand, tend to run from emotional negotiations as if the room is on fire.

But the evidence is mounting that what we learned in law school about the need to keep emotion out of decision-making was wrong. Modern neuroscience and related emerging fields like neuroeconomics and behavioral economics are telling us exactly what many of us donít want to hear: Emotion is not only relevant to decision-making, it is an essential ingredient in the recipe for good decisions. When people in conflict attempt to exclude emotion or pretend it isnít relevant, bad decisions can result.

What is the basis for this shocking conclusion? Itís the brain, stupid!

Neurologists are making new discoveries about the human brain virtually every day. Brain imaging technology is giving scientists unprecedented access to the processes employed by the brain. This new scanning equipment allows the neurologist to see precisely which areas of the brain fire, for example, when a subject is confronted with choice. The results of these experiments are causing neurologists, psychologists and even economists to re-examine some of their core assumptions about human behavior. We lawyers need to do the same.

It is now clear, for instance, that when humans are confronted with choice both our "reflexive" and "reflective" brain sections kick into gear. The "reflexive" portion of the brain can be equated on a simplistic level with emotion. The "reflective" section refers to our analytical brain functions. But the point is that without appropriate input from each section, the decision-making process can be impaired.

The key, decision science experts say, is for us to understand that while emotion is relevant to virtually every decision we make, in most instances we should not let it drive our decision-making. Take, for example, a meeting between parties to a dispute at which they will attempt to negotiate a settlement. Letís assume that one party at the meeting experiences an immediate "reflexive" reaction that another party at the table is not to be trusted. If that individual lets that reaction drive his or her decision-making at the meeting, it will no doubt be more difficult to reach any sort of meaningful agreement.

On the other hand, would any of us advise that person to completely disregard that sort of "gut" reaction? The right course of action in that instance would be to proceed with caution. Perhaps an agreement could be reached that resolves the dispute but contains a bit of extra protection for the party with trust concerns. This is admittedly a delicate balance, but it is important nonetheless.

The point is that both the reflexive and reflective sections of the brain need to work together for the optimal decision to emerge. Excluding emotion from the equation shortchanges the decision-making process. In this example, without input from the reflexive part of the brain the parties might have struck a deal that allowed a less ethical individual to exploit another party down the road.

Of course, emotion unchecked can pose an incredibly difficult barrier to resolution. In particularly painful and difficult conflicts, it is a huge challenge for negotiators to insure that the reflexive parts of their brains donít drive their decision-making. To make matters worse, many times during negotiations parties will employ tactics that while intended to obtain some strategic advantage instead encourage more reflexive behavior from the other side. The conflict then enters a death spiral. This is one reason that we have so much litigation in our country today.

The dispute between the Nashua Teachers Union and the Board of Education (and indirectly the mayor, the board of aldermen, the students, the parents and public-at-large) is a good example of a conflict where sound decision-making is both sorely needed and difficult to obtain. Would anyone deny that the emotion surrounding the negotiations is making resolution extraordinarily difficult? At the same time, given the history of these negotiations, does anyone find that the least bit surprising? The parties need to acknowledge this reality, and find a way to move past it if they are to reach agreement.

Of course, this is where the mediator comes in. A third party neutral, like Professor Bruce Fraser, is perfectly situated to help the parties overcome the barriers that are preventing agreement. Rest assured that Professor Fraser not only understands the law, but understands the nuances of decision-making during conflict. While the mediation process is understandably and quite properly confidential, we can be certain that Professor Fraser is using everything in his bag of tricks to help the parties both understand the emotion present in the dispute and make sure that that the emotion doesnít drive their decision-making. For the sake of all Nashua citizens, letís hope Mr. Fraser is successful.

H. Scott Flegal is a business lawyer and mediator, and the principal of the Flegal Law Office, P.A. and Business Mediation Solutions, LLC. Visit him on the Web at www.flegal.com or www.businessmediationsolutions.com

Editorís Note: This article first appeared in the March, 13, 2008 issue of the Nashua Telegraph and is reprinted here with permission. Special thanks to attorney Honey Hastings for bringing this article to the editorsí attention.

Supreme Court Rule 42(9) requires all NH admitted attorneys to notify the Bar Association of any address change, home or office.

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