politically, compelling him/her to take a tougher stance when it counted, in the end, lest he/she be tarred publicly with the ignominious tag of being soft on business malfeasance. That would not have played out well in the affected community or in the Department of Justice. To be sure, these lawyers were really rolling the dice, taking a big risk if their gambit failed. But they had every reason to think it would succeed—and probably it would have, had my client not been using a tool like the negotiating game.
Even though (according to the model) the U.S. attorney was willing to go for a mix of misdemeanors and lesser felonies, the logic showed that the hard-liner gambit would work. He/she would abandon a moderate stance, choosing instead to go for severe felonies. This was the U.S. attorney’s way of solving the tough choice between pursuing the outcome he/she thought was right and following the gambit’s path, thereby avoiding careerist costs and keeping the support of others in the Department of Justice and in the affected community. Seeing that the U.S. attorney had significant political exposure and careerist ego involvement in the case, it became apparent that we could find ways to gratify his/her ego and bollix the hard-liners’ gambit.
The simulations uncovered several interesting patterns that opened the opportunity to engineer the outcome. First, as noted, the U.S. attorney took a tough stance according to the simulations because of pressure from attorneys at ABC and within the Department of Justice and in response to arguments from several stakeholders in the affected community. They were strongly committed to their point of view, and the U.S. attorney cared about being perceived by them as interested in helping them get justice as they saw it. This was particularly interesting because the U.S. attorney’s own view of what could be supported as punishment through the judicial process was considerably less. The U.S. attorney’s view involved none of the severe felonies and showed openness to at least some misdemeanors. The U.S. attorney, facing hard-line pressure, was willing to trade off some sense of legal correctness for political correctness and its attendant personal credit.
To engineer a better result, I simulated what might happen if the defendants altered their bargaining position from that of being prepared to accept numerous misdemeanors and maybe one lesser felony, a posture predicted to end in their caving in to one or more severe felonies. I looked at what would happen if they offered more concessions up front and also if they offered less. I also looked at how they could maneuver to get some important hard-liners to make arguments that would make those hardliners look foolishly extreme to the U.S. attorney, turning the gambit on its head. In examining alternative strategies I took advantage of another insight gained from the base analysis: the U.S. attorney tilted more toward eagerness to make a deal than to sticking to a particular position. Also, it was evident that the defendant’s strategy had to create leverage against the pressure exerted by the hard- liners who wanted a plea involving severe felonies.
It turned out that the best strategy for the defendant involved two shifts from the approach they had planned as reflected in the data they gave me about themselves. First, the one outside counsel who favored pleading guilty to one lesser felony and numerous misdemeanors needed to convey unity with the rest of the defendant’s team in endorsing a plea to misdemeanors
This attorney acted out the scripted part perfectly. Jack Nicholson, great as his performance was in
Of course, getting an attorney or anyone else to act contrary to their beliefs is no small order. It takes great faith that the model’s logic should be allowed to trump personal intuition. As an old client used to say when introducing me to his colleagues, “Check your intuition at the door.” The greatest value of a model is when it provides an insight that is contrary to the decision makers’ expectations—when it correctly urges them to check their intuition at the door. It takes a courageous person to defy one’s own beliefs and follow the lead derived from a computer model, since after all we never know what is or is not correct until after the fact. All we know is the model’s track record for accuracy (but then everyone thinks his problem is unique) and whether the logic for the proposed action is persuasive. Fortunately, in this case the outside attorney being asked to change his/her approach had worked with my firm before on other cases. In fact, this attorney is the very person who persuaded the client to use my company’s services. He/she had seen the model, as he/she put it, “work its magic” before, so this attorney had no problem agreeing to act out the part as written by the model.
The second maneuver that was required was considerably more challenging to “sell” to the defendant. The company’s directors were naturally very concerned about this matter and were eager to find a solution. The simulations—remember, all of this analysis is happening before discussions with the U.S. attorney have begun— showed that the directors were so fearful of how the case was likely to unfold that they would cave in to the mounting pressure from the opposition hard-liners by agreeing to numerous felony counts including one count of the severe felony—that is, the hard-liners’ chess gambit was going to work. To produce no severe felonies, getting instead multiple misdemeanors and one lesser felony as the plea, it was necessary to control the reaction of the board when the U.S. attorney pressed hard for an outcome the board was prepared to live with. The strategy for them was simple to articulate but hard to do: they had to take the position that they would not negotiate or authorize any discussion of felonies at all, risking the ire of the U.S. attorney and a breakdown in discussions.
They would have to repeat this message convincingly through months of negotiations between the U.S. attorney and their attorneys. Their attorneys would have to keep going to meetings with the U.S. attorney in which they repeated the message that they were unable to persuade the board to show some flexibility, followed by a plea that the U.S. attorney must give them the ammunition to convince their board that the matter could be settled. That ammunition was for the U.S. attorney to stand up to the hard-liner government attorneys, shooting down their arguments in front of the defendant’s attorneys when they all sat in meetings together. That was the way for the U.S. attorney to flip the hard-liners’ gambit on its head. To achieve this end, the board had to go along with the idea of their lawyers insisting on going to meetings with the hard-liners in attendance rather than trying to have private meetings with the U.S. attorney as they actually preferred.
Just imagine the board’s reaction. Their first thought was “Who is this guy with the chutzpah [not a word they would have used] to tell us what to do when our entire business is on the line?” Indeed, when I proposed the optimal monetary offer to settle the case, an offer way below what they thought should be put on the table, they thought I was nuts. When I suggested that their attorneys should meet with the hard-liners as well as the U.S. attorney, they thought I was beyond nuts.
The model found that the optimal offer and settlement price was about a third of what the board thought they should make as their opening offer, and it found that this offer was best made in the presence of both the U.S. attorney and the hard-liners. The board members were sure the U.S. attorney would just get up and walk out if they did what the model was recommending. Fortunately, some of the other people involved in the case had worked with me, my partner, and the model before. They thought that the board should listen, and that they would listen if they just had an opportunity to confront the arguments head-on. With that in mind, the lead in-house attorney set out to arrange a meeting for me with a very senior executive from the firm. That senior representative would put the board’s case before me and see if I could make convincing arguments based on the model’s results—that is, could I persuade this executive that the strategy developed through the game was not nuts?
Mind you, I have faced this sort of situation many times. Anyone who works on behalf of my firm on a project is instructed never—let me repeat that word,
