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A NEGOTIATING ETHICS STUDY

Marjorie L. Benson1 In a study involving the cooperation of provincial law societies, a law foundation, CLE organization, CBA Branch sections, university units, senior advisory counsel, and practitioners, 35 civil lawyers in Regina, Saskatoon and Calgary were interviewed in winter 2005-2006 concerning negotiating ethics. Study results are being compiled, but early themes suggest that the keys to ethical and best practice negotiation lie in overall legal competence and integrity handling clients objectives, law and facts, legal and financial risks, procedural and substantive recommendations, client instructions, moving to settlement or trial according to the clients best interests with good communication skills, trustworthiness, honesty, and civility. Dans le cadre dune tude ralise au cours de lhiver 2005-2006 laquelle ont collabor plusieurs barreaux provinciaux, une fondation du droit, une organisation consacre la formation juridique permanente (FJP), plusieurs sections provinciales de lAssociation du Barreau canadien (ABC), des units universitaires, des avocats consultants chevronns et plusieurs avocats en exercice, 35 avocats pratiquant en droit priv de Regina, Saskatoon et Calgary ont rpondu des questions portant sur les ngociations en matire dthique. La compilation des rsultats de cette tude nest pas encore termine mais les premiers rsultats rvlent que les lments essentiels en matire dthique et de pratiques exemplaires dans le momaine des ngociations reposent essentiellement sur la comptence juridique et lintgrit des juristes. Il faut notamment tenir compte des objectifs du client, des faits et du droit, des enjeux juridiques et financiers, des recommandations substantives et procdurales, des instructions du client menant au rglement de laffaire ou au procs conformment aux meilleurs intrts du client, tout en faisant preuve dune bonne communication, de fiabilit, dhonntet et de civisme.

Copyright 2006 by Marjorie L. Benson. 1 Associate Professor, College of Law, University of Saskatchewan. With sincere thanks to the 35 members of the Alberta and Saskatchewan Bars whose insights and advice are the substance of the study; to the Advisory Committee Brent Cotter, Tom Molloy, and Silas Halyk; to students-at-law Jennifer Robertson and Clayton Barry; to the Law Societies of Alberta and Saskatchewan, Law Foundation of Saskatchewan, Saskatchewan Continuing Legal Education Society, Canadian Bar Association Saskatchewan Branch Civil Litigation Sections, University of Saskatchewan Behavioural Ethics Research Board, and to members of the Bar who advised informally concerning the study.

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Introduction The following offers preliminary information concerning a Negotiating Ethics study consisting of interviews with 35 private practitioners in civil law in Alberta and Saskatchewan. The study grew out of a desire to offer law students more literature on the ethics of negotiation in the context of Canadian professional codes and practices.2 The study was developed at the College of Law, University of Saskatchewan, and supported by the
2 For example, Albertas Code of Professional Conduct contains a separate chapter, Chapter 11 The Lawyer as Negotiator, online: The Law Society of Alberta <http://www.lawsocietyalberta.com/resources/codeProfConduct.cfm>. Saskatchewans Code of Professional Conduct, online: <http://www.lawsociety.sk.ca/newlook/ Publications/Code2001/CodeCompleteNov03.pdf> follows in large part the Canadian Bar Association Code of Professional Conduct, which directs negotiation implicitly through provisions of the entire Code, online: <http://www.cba.org/CBA/activities/code>. Well known Canadian texts in Alternative Dispute Resolution, including Hon. George W. Adams, Mediating Justice: Legal Dispute Negotiations (Toronto: CCH Canadian, 2003), Genevieve A. Chornenki & Christine E. Hart, Bypass Court, 3d ed. (Markham, ON: LexisNexisButterworths, 2005), Robert M. Nelson, Nelson on ADR (Scarborough, Ont.: Carswell, 2003), Julie Macfarlane, ed., Dispute Resolution: Readings and Case Studies, 2d ed. (Toronto: Emond Montgomery, 2003), and Andrew Pirie, Alternative Dispute Resolution: Skills, Science and the Law (Toronto: Irwin Law, 2000), contain chapters or references to negotiation practices. Most of the academic literature referenced in the texts are classic American sources, for example, Roger Fisher, William Ury & Bruce Patton, Getting to Yes: Negotiating Agreement Without Giving In, 2d ed. (New York: Penguin Books, 1991), D.A. Lax & J.K. Sebenius, The Manager as Negotiator: Bargaining for Cooperative and Competitive Gain (New York: Free Press, 1986); Robert H. Mnookin, Scott R. Peppet & Andrew S. Tulumello, Beyond Winning: Negotiating to Create Values in Deals and Disputes (Cambridge, Mass.: Harvard University Press, 2000); Dean G. Pruitt & Peter J. Carnevale, Negotiation in Social Conflict (Pacific Grove, Cal.: Brooks/Cole, 1993); and Howard Raiffa, The Art and Science of Negotiation (Cambridge, Mass.: Harvard University Press, 1982). Professor John Manwaring, U. of Ottawa, who authored the major chapter on Negotiation in Macfarlane, Dispute Resolution: Readings and Case Studies (ibid.), includes two sections specifically devoted to ethical issues: Ethical Frameworks for Negotiation, at 258, and Lawyers, Ethics, and Negotiation at 266. Professor Manwaring includes at 266 selections from the Law Society of Upper Canada Rules of Professional Conduct as ethical rules relevant to negotiation, including the rule that a lawyer shall not knowingly assist in or encourage any dishonesty, fraud, crime, or illegal conduct, shall conduct himself or herself in such a way as to maintain the integrity of the profession, shall be courteous, civil, and act in good faith with all persons, and shall avoid sharp practice and shall not take advantage of or act without fair warning upon slips, irregularities, or mistakes on the part of other lawyers not going to the merits or involving the sacrifice of a clients rights. The academic literature referenced in these sections includes: C. Menkel-Meadow, Toward Another View of Legal Negotiation: The Structure

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Law Foundation of Saskatchewan. The Law Society of Saskatchewan appointed an Advisory Committee consisting of Brent Cotter Q.C., Tom Molloy O.C.Q.C., and Silas Halyk Q.C. The Law Society of Alberta, the Saskatchewan Continuing Legal Education Society, and the Canadian Bar Association Saskatchewan Branch Civil Litigation Sections acted as neutral third-party recommenders of senior practitioners to be invited to contribute to the study. The study was limited to members of the private bar in Alberta and Saskatchewan who practise civil law.3 A Phase II is currently being planned to include government and corporate counsel. Study protocols were approved by the University of Saskatchewan Behavioural Research Ethics Board. Interviews proceeded on the basis of individual consent and anonymity, and were conducted between December 2005 and March 2006 in Calgary, Saskatoon, and Regina. Interviews were recorded, transcribed, and returned to participants for revision and approval. At the time of writing, results are being compiled. In recognition, however, of the Canadian Bar Reviews special focus on Ethics through the publication of this issue, interviewees have agreed to a preliminary release on a generic basis of some of the themes emerging in the study. Results contain a range of opinion, detail, and examples on negotiation ethics and practices that will be available in the final report to anyone interested. No clear line emerged between ethical and best practice issues. Practitioners agreed at a minimum on the situations requiring negotiating decisions in the day-to-day handling of a case, and some ethics and best practice considerations, as outlined below. A. Situations Requiring Negotiating Decisions Throughout a Case Lawyers negotiate throughout a case with many parties, including the client, other counsel, and third parties. As a client or file arrives in a lawyers office, agreements are needed concerning fees and conditions. If
of Problem Solving (1984) 31 UCLA L. Rev. 754, G.B. Wetlaufer, The Ethics of Lying in Negotiations (1990) 75 Iowa L. Rev. 1219, and R.J. Lewicki et al., Negotiation, 2d ed. (Chicago: Irwin Law, 1994). 3 The premises and dispute resolution processes are different, and more Canadianbased literature exists concerning practices and ethics of negotiating, in criminal law and family Collaborative Law contexts. See for example Michel Proulx & David Layton, Ethics and Canadian Criminal Law (Toronto: Irwin Law, 2001) and Janis M. Pritchard, David J. Carter & R. Brad Hunter, Collaborative Law Training Materials: Solving Conflict with a Collaborative Process (Medicine Hat, Alta.: Palliser Conflict Resolution, 2002).

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the lawyer and client agree to proceed, the lawyer seeks to understand the clients objectives in the case. Clients have a range of experience in assessing legal and financial risk, from considerable experience in assessing risk and establishing objectives, to almost total dependence on the lawyer for advice with respect to legal and financial risks and realistic objectives. The lawyer, either initially or as the case proceeds, seeks a deeper understanding of the clients relevant interests, including ongoing relationships and third party implications. If the lawyer and client have a long-term relationship, the lawyer will already have an understanding of the clients underlying interests. The lawyer will discuss with the client dispute resolution options as well as specific requirements in the jurisdiction. If the lawyer does not have sufficient information to assess the legal and financial risk in the file, the lawyer determines what additional information is needed and how it may be acquired. More information may be needed from the client, from opposing counsel, or in relation to the law. The most effective means of acquiring information is assessed on the basis of many factors, including the clients circumstances, the opposing counsel and client, the nature of critical information and costs of gathering it, and dispute resolution processes in the jurisdiction. It may be necessary to acquire experts or to move to examinations for discovery to adequately assess risk. With sufficient information, the lawyer arrives at an assessment of the legal and financial risk, and formulates detailed projections of the costs and benefits of different approaches to resolving the dispute, including settlement discussions or litigation. The lawyer makes a recommendation to the client as to a range of realistic outcomes, and the choice of dispute resolution processes that in the lawyers judgment will resolve the case in the most cost-effective way. If necessary, the lawyer works with the client to develop understandings of the law, the costs and benefits of different approaches to dispute resolution, and realistic expectations as to outcomes. The lawyer seeks to arrive at consensus with the client as to how to proceed. As the case progresses and new information emerges, the lawyer continues to assess risk, to recommend next steps and seek consensus with the client concerning instructions, and to work with the client in legal and procedural understandings. B. Ethics and Best Practice Considerations Competent work with respect to law and facts early in a case grounds

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effectiveness in all that follows, including negotiations. Whether proceeding to settlement discussions or to litigation, the lawyer prepares the case well, discloses all information required by law to be disclosed, and prepares written materials in a clear, concise and well-organized way. The lawyer is competent to conduct a trial if needed. The lawyer knows the difficult questions in the case and is prepared to respond. The lawyer has a realistic assessment of the range of outcomes, and is prepared to enter settlement discussions as appropriate. The lawyers goal is to assist the client to achieve realistic objectives in a cost-efficient way. The lawyer is aware of the impact of different fee structures on client costs, e.g. contingency vs. hourly fees, and ensures that client interests are paramount in choosing dispute resolution processes. Settlement discussions are conducted within a justifiable range, and offers, when made, are ones the lawyer is prepared to support to trial if needed. The lawyer knows the must haves, cant haves, and feasible potential concessions. Settlement offers are communicated to clients. Concessions are made on a principled basis according to reciprocity or the emergence of new information. Settlement options are kept open up to the courtroom steps. A satisfactory settlement gives all parties a way to preserve dignity, and the more an agreement satisfies both sides interests, the more durable it will be. In dealings with clients, counsel, or third parties, lying, misrepresentation, and deception are outright unethical. A lawyer declines to act if a client presses the lawyer to do something unethical. A lawyer treats other counsel with courtesy, is not rude or uncivil, and does not undermine the lawyer as a person. Clients and counsel have a long memory, and any untrustworthy or uncivil behaviour will be remembered by other counsel and will lead to mistrust. Lawyers who overstate or bluster will find their statements discounted. A lawyer does not take advantage of a slip in procedure by the other side if it does not go to the merits and will not hurt the clients interests. The more trust there is between opposing counsel, the more open and frank settlement discussions can be, which increases the cost-efficiency for the client. The lawyer who is competent, fair, and firm gains a reputation for preparedness, honesty, trustworthiness, civility, and reasoned and principled interactions. A good reputation is a lawyers (and a clients) most valuable asset. In negotiation, there is no independent third party in the room to control procedural or substantive justice. The lawyer makes those decisions, with the ethical weight that carries. Lawyers should never let themselves be pressed into doing anything they will not have a clear conscience about afterward, or would not want their client, the court, other

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counsel, the public or their family to know about. If in doubt, lawyers should ask a respected colleague. Young lawyers can best learn ethical and effective practices in the many nuances of negotiation by working with wise and skilled senior practitioners. C. Summary Themes Overriding themes emerging in the study concerning negotiating ethics might be summarized as competence and integrity. Legal competence includes knowing the law, acquiring the facts, solid preparation of the case and the client, realistic objectives and cost-effective processes, reasoned settlement discussions, and the skill to conduct any dispute resolution process effectively. Integrity is long term trustworthiness, honesty, honour, and civility, and the reputation and respect that flow from years of interaction on these bases with clients, counsel, the Court, staff, third parties and the community. As noted, the above provides but a cursory glance at patterns emerging in the interviews, lacking the richness of detail, examples and nuanced advice on negotiation ethics and best practices offered by experienced practitioners. These will be available in the final report as soon as it is complete.