07 July 2020

By Travis Schultz

The advent of COVID-19 and the lockdown of businesses and professional services firms across the globe has brought with it wholesale changes to the way we interact, to how we perform our work and seemingly, how we behave during negotiations.

Remote work, virtual meetings and digital conferences have become the norm as social distancing rules limit the modalities of interaction available to most of us in our professional lives.

What was perhaps initially thought to be just a temporary measure during the acute phase of a pandemic, is turning into a new norm; a concept that we all had to adjust to, but are now discovering that telecommuting brings with it unprecedented convenience and perhaps a work-life balance we could have only dreamt about c2019.

There are numerous benefits from our newfound freedom away from the shackles of an office desk, but what impact has this privilege had on our ability to close deals, negotiate resolutions and settle disputes?

For those of us who work in the legal profession and regularly have to represent our clients at settlement conferences and mediations, there will always be a necessary tension in the discussions that take place with an opposing party and their representatives.

Every practitioner is doing their level best to further their client’s interests, while at the same time advising on the commerciality of decisions they might make, and also ensuring their client is fully informed of the consequences and costs included, of taking a particular course.

And, in this finely tuned balancing act, a degree of compromise is required as the making of appropriate concessions will lubricate the path to achieving an outcome that is in the broader interests of all stakeholders.

If that’s not palpable enough for you, why can every man and his (discerning) dog remember Jack Nicholson’s line as Colonel Jessup in the 1992 courtroom drama A few Good Men? Is it, that now, some four months after the COVID-19 enforced isolation measures we’ve grown to enjoy came into play, we actually can’t handle the truth? That some things just need to be done in person. Where you can stare each other down, or slap them on the back for that matter.

Strategy in negotiation has been the subject of any number of studies and esoteric debates over the years. And irrespective of your personal view as to what works best in particular circumstances, there’s always going to be as much art as there is science in formulating the plan to bring about a sensible, if not beneficial resolution of any given matter.

But recent months of engaging with opponents on virtual platforms has left me bewildered as to why nothing is settling. Such was my dismay at the recent poor rate of settlement of compensation claims over the COVID-19 lockdown period that I decided to go back through my diary and count up the number of alternate dispute resolution processes I have personally undertaken and the number that had resolved; and the statistics were alarming!

You can imagine my surprise when I totalled it all up to find that out of 30 engagements in online discussions, only 5 had resolved. That’s a resolution rate of about 16% – disappointing (if not alarming) by any measure.

A subsequent reflection on the research by academics and respected authors yielded a divergence of views as to the efficacy of virtual negotiations. Most seem to agree that face to face negotiations work best, only some thought that phone and virtual meetings could be nearly as effective. And, when I enquired of several colleagues as to what their experience was like, many reported a similar reduction in their “normal” resolution rates.

So why is it that our distant discussions aren’t resulting in compromises the way they did pre-pandemic?

I did a bit of a straw poll of friends and colleagues, and their explanations for poor results from virtual negotiations (para-phrased by me) included:

  1. A change in behaviour by insurers who are guarding their cash in tumultuous times;
  2. Phone and video conversations don’t fully engage participants because of other distractions around them, like their environment, emails and phone messages;
  3. The lack of non-verbal cues (such as the ability to read facial expressions, body language etc) and even eye contact prevents trust-building and means communication is less open;
  4. Virtual discussions are overly task-focused and being too clinical, prevent relational discussions;
  5. Being connected by a modem results in a “let’s get this over with, I have a lunchtime yoga session” approach;
  6. Poor internet or phone connections can frustrate discussions meaning they don’t move to a collaborative, problem-solving stage;
  7. It’s just too easy to say no when you’re on the phone or in a virtual environment;
  8. Maybe it’s just you mate?

I’m loving the convenience of virtual meetings and the efficiency with which a case conference can be dispatched, but it’s just not working. And that’s despite it clearly being in the interests of all stakeholders in the process to reach sensible resolutions of matters as early as practicable.

Maybe it’s just me, but I’m looking forward to getting back to a world that includes eye contact, starting with a yarn and ending in a handshake!

Travis Schultz

Travis Schultz

Managing Partner