Module 1
Why put numbers on a negotiation: targets, reservation points and the zone of agreement
Lawyers negotiate all day, and most of the numbers in their negotiations live in their heads: what the case is worth, what the client will accept, what the other side will probably do. Those numbers are often good and are rarely written down, checked or compared with what actually happened. Negotiation analytics is the habit of making them explicit. You state your target and your lowest acceptable outcome, value your alternative if there is no deal, check your figures against past results, read the other side’s moves as they come, and work out which trades leave both sides better off. It does not replace judgement, and it does not predict the counterpart. What it does is make the reasoning visible, so that it can be questioned, improved and learned from. This module introduces the basic quantities (target, reservation point, best alternative and zone of agreement), the data that a lawyer already holds, and the limits and ethics of using numbers in negotiation. The remaining modules give each part its own tool. It is written in jurisdiction-neutral terms with invented figures, and it works alongside the Negotiation course, which teaches the human side.
Hover over an idea to light up what it connects to, click it for its definition, minimum requirements, an example and the usual trap, press Play to watch the map build step by step, or trace a short case through it.
Simplified teaching map, in general terms. Check the law where you work. On a small screen, scroll the map sideways.
By the end of this module you can
- Define target, reservation point, BATNA and ZOPA.
- List the data a lawyer already holds.
- Say what numbers can and cannot do.
- Use ranges and state uncertainty.
- Respect the ethical limits on data use.
Part 1. The lecture
The four quantities
| Quantity | What it is | Example (invented) |
|---|---|---|
| Target | The outcome you are aiming for, on realistic grounds | A settlement of 240,000 |
| Reservation point | The worst deal you would still accept: beyond it, you are better off walking away | 150,000 |
| BATNA (best alternative to a negotiated agreement) | What you would do if there were no deal, valued as honestly as you can | Going to trial: worth about 150,000 today, after cost, delay and risk |
| ZOPA (zone of possible agreement) | The range of deals that both sides would prefer to no deal; it exists only if the sides’ reservation points overlap | The claimant accepts 150,000 or more; the defendant pays up to 210,000; so any figure between 150,000 and 210,000 beats walking away for both |
- You know your own reservation point, or should. You do not know the other side’s. The ZOPA is therefore something to estimate and test, not to read off.
- A reservation point follows from a BATNA, and not the other way round. Many people choose a number first and then defend it. Working out the alternative first gives the number a reason.
- Non-money matters change the reservation point. Time, relationship, reputation, precedent and certainty all matter. Put money on them where you can, and say so where you cannot.
- The target is not a hope. It is the outcome you can argue for, using reasons that the other side could accept.
The data a lawyer already holds
| Source | What it can tell you | Caution |
|---|---|---|
| Your own history | How past matters of this kind ended, how long they took and what they cost | Small samples; memories are selective; recent cases loom large |
| Firm or client records | Settlement amounts, offers made, outcomes at trial | Confidential; may be incomplete or recorded inconsistently |
| Published decisions and awards | What courts give when cases are decided | Only the cases that went to judgment, which differ from those that settle |
| Reported settlements and surveys | Typical ranges in some fields | Self-reported, rarely comparable |
| The other side’s behaviour in this negotiation | How they move, what they care about, how fast | A guess about a person, and they may be playing a role |
| Your client’s own numbers | Costs, margins, alternatives, deadlines | Often the most reliable and the least examined |
The point of analytics is not to acquire new data. It is to write down what you already know, check it against what happened and use it consistently.
A worked example: four numbers on one dispute
A small manufacturer claims 300,000 from a customer that refused to pay for a delivered batch, saying that the goods were defective. The manufacturer’s lawyer sits down before the first meeting and writes four lines.
- Alternative. A court case would take about a year and cost 35,000. She puts the chance of winning in full at 40 per cent, in part at 35 per cent and of losing at 25 per cent. After cost, delay and risk the case is worth about 100,000 to the client today.
- Reservation point. The client would be no worse off at any deal above 100,000, and she adds 10,000 because a quick end would let the client use the money in the business. She writes 110,000 as the walk-away figure, with the reason.
- Target and range. Six past settlements of similar disputes landed at 40 to 55 per cent of the claim. Her evidence of delivery is better than most, so her target is 55 per cent, 165,000, and her opening 240,000, which she can support item by item.
- The other side. From the customer’s accounts and its first letter, she estimates that its limit is somewhere between 120,000 and 180,000. If so, the zone of agreement runs from 110,000 to between 120,000 and 180,000, and a deal near her target is possible but not certain.
None of these figures is a fact. Each is a labelled judgement with a reason, which a colleague can challenge and which can be compared with the result. That is all that analytics asks for, and it is more than most preparation records.
What numbers can and cannot do
| Numbers can | Numbers cannot |
|---|---|
| Make your reasoning visible, so it can be checked | Tell you what the other side will do |
| Stop you accepting less than your alternative, or demanding more than the zone allows | Replace judgement about people, timing and what is at stake for the client |
| Show which issues are worth trading | Remove uncertainty; they only describe it |
| Let you learn from outcomes over many negotiations | Make a single negotiation predictable |
- Ranges, not points. ‘The case is worth 240,000’ claims more than anyone knows. ‘Between 150,000 and 300,000, most likely around 220,000’ is a statement that can be tested.
- Say where each number comes from: a past case, a benchmark, a professional estimate or a guess. A guess is allowed; an unlabelled guess is a hazard.
- Beware false precision. A figure with six digits looks more reliable than one rounded to the nearest ten thousand, and is not.
- Beware anchoring on your own numbers. Once you have written a figure down, you will tend to defend it. Write the range and the reasons together.
- Calculation can be used to avoid decision. Sometimes the answer is already clear and the number is only a comfort.
Ethical limits
- Do not deceive about facts. Analytics helps you prepare. It does not license misstating the numbers to the other side. Bluffing about a reservation point or an alternative is a tactical question; stating false facts is a professional-conduct question, and the rules differ by jurisdiction.
- Respect confidentiality. Settlement data from other clients, and information given in confidence, must be used within the terms on which it was received. Anonymise and aggregate where you can.
- Do not profile people unfairly. Reading a counterpart’s pattern of concessions in this negotiation is normal preparation. Building files on individuals from other sources, or using sensitive personal data, raises privacy and conduct issues.
- Be honest with the client. A number that sounds precise can mislead a client into expecting a result. Explain the range, the assumptions and the chance of being wrong.
- Check the terms of any AI tool before entering client or deal information into it.
Part 2. Lab: Name the Number
Choose the best response in each situation.
Situation 1 of 3
A client says, ‘I will not take less than 300,000.’ You ask why, and she says that it is what she thinks she deserves. Her alternative is a court case with a wide range of outcomes.
What is the best next step?
Part 3. Lab: Data or Judgement
Sort each statement by what kind of statement it is.
Situation 1 of 6
In our last 14 late-delivery disputes the median settlement was 45 per cent of the claim.
Where does this belong?
Part 4. Lab: Spot the Overconfidence
Click the sentences that overstate what the numbers show, or mark the sound ones.
A preparation note
Click every sentence that causes a problem, then press Check. There may be 3 problems, and some sentences are fine.
Part 5. Check your understanding
Ten questions drawn from a larger pool. Sign in to have your score saved towards your certificate.
You have finished the free module
Here is what you can do now, and where the course goes next
Module 1 gave you
- Define target, reservation point, BATNA and ZOPA.
- List the data a lawyer already holds.
- Say what numbers can and cannot do.
- Use ranges and state uncertainty.
- Respect the ethical limits on data use.
Next, 6 more modules and a capstone
- Module 2: Valuing your alternative: expected value, cost, delay and riskYou will learn to list outcomes, probabilities and values.
- Module 3: Benchmarks and settlement data: what past deals can and cannot tell youYou will learn to build a table of comparable deals.
- Module 4: Anchors and first offers: opening with a reason and reading the other side’sYou will learn to explain anchoring and its limits.
- Module 5: Concessions and convergence: reading the pattern of movesYou will learn to plan the size and order of your concessions.
- Module 6: Multi-issue deals and trades: creating value before dividing it
- Module 7: Learning from your negotiations: scorecards, calibration and responsible use of data and AI
- Capstone: Capstone: Halden Foods and Corbel Logistics
Each module has its own practice labs and a graded quiz, and a Certificate of Completion follows when you pass them all. The whole course is $15 once, or included in an All-Access Membership.
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General education on using data in negotiation, with invented companies, people, disputes and figures. It states common practice in simplified form and does not describe any one country's law or professional rules, which differ and change; rules on candour, misrepresentation, confidentiality and settlement in particular vary. The tools organise your own estimates and cannot predict the result of any real negotiation. It is not legal advice, and it does not replace advice from a qualified lawyer on a real matter.
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