Ultimatums and Bluffs

Ultimatums can have their place in any negotiation, but they are best used sparingly and with care. And while I’ve gotten the best results by being quite direct in negotiations, being too direct – throwing down an ultimatum – raises a significant risk that your discussions will come to an abrupt end.

Which means, of course, that you should be OK with that outcome if you make an ultimatum.  “My way or the highway,” as they say – and if the other side opts for “highway,” that’s fine.

The corollary to this principle is that it is a mistake to bluff when making ultimatums. The reason is simple: if you make an ultimatum, and then walk it back when the other side resists, you’ve cost yourself a massive amount of negotiating credibility.  It makes the other side wonder why they should believe anything you say, making it doubly hard to get what you need in the deal. 1

Unfortunately, I regularly experience firsthand attorneys violating this principle with their own particular brand of ultimatum: the lawsuit threat.

It’s kind of depressing that attorneys reach for this little trick so reflexively. But I suppose to some, if you’ve got that hammer, everything starts looking like a nail. And it must work at least some of the time, at least when dealing with power imbalances or inexperienced negotiators.

But the problem with the lawsuit threat is the same problem of any ultimatum: if you don’t intend to follow through with it, and the other side isn’t impressed with your threat, you’ve got nothing left to do but slink away.

Maybe that’s OK for some attorneys, but in a profession where reputation is so important, it feels awfully cheap to me to just throw one’s credibility around. And there’s a related problem as well, as lawyer (and Harvard business school professor) Ben Edelman just found out: that your threats will reveal, via the magic of social media, what an insufferable tool you really are.

All of this is why most savvy attorneys rarely make lawsuit threats – they just file.  Or they only make a threat when their client is ready to pull the trigger on a lawsuit.  2

So back to the question: why would an attorney threaten a lawsuit he or she had no intention of bringing? Maybe because they feel like they have leverage over a small business, which has heard the tale of the lawyer suing for $10 million over a dry cleaning mistake.  Or because they feel they can browbeat or intimidate a low-level employee pr small business owner into getting their way (Harvard prof Edelman is obviously big on this tactic).

Not that any of that is right, but at least I can understand the logic.

But why would a lawyer make a threat like this to me?  It takes less than minute to look my background up, see that I may know a few things about media law and negotiating, and realize that the ol’ lawsuit threat bluff isn’t going to work.

Why would they make it to a restaurant owner with a large social media following, who can effectively embarrass them on a national stage?

It should occur to them that their target may turn the tables on them, and make their demands look like the churlish “standing on rights” that they typically are.

Yet lawyers continue to do this, over and over again. 3 It’s just appalling how little work goes into thinking through the efficacy of rolling out the lawsuit threat.  Believe it or not, many businesses don’t quake in fear at the thought of being sued. Many of us will just tell you to get lost – or if you really piss us off, we will make you pay, both reputationally and in actual dollars.

So lawyers, trust me – the “tool” of clearly explaining your position and asking politely for something reasonable? That’s a hell of a lot more effective than threatening to sue.

And it’s certainly a lot less likely to end up with you at the center of an epic media shitstorm.

Notes:

  1. This is also why bluffs work when playing poker. You actually want your bluffs to be called occasionally precisely because you don’t want credibility – predictability – at the poker table.
  2. On exactly one occasion in my legal career did I threaten a lawsuit I didn’t intend to follow through with. I still cringe thinking of it. And no, of course my bluff didn’t work.
  3. OK, and non-lawyers, too – witness the buffoonery of clown-troll Charles Johnson’s many lawsuit threats.

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