pragmatic uses for decision trees in settlement discussions
DESCRIPTION
TRANSCRIPT
Copyright © 2014 John DeGroote Services, LLC
Pragmatic Uses for DecisionTrees in Settlement Discussions
Jan 17, 2014
Texas Bar CLE • 12th Annual Alternative Dispute Resolution • Dallas, Texas
Copyright © 2014 John DeGroote Services, LLC 2
Today’s Roadmap
• Who
• What
• Why
• How
• …and More
Copyright © 2014 John DeGroote Services, LLC 3
If you and the other side value your case
differently, at least one of
you is wrong.
Make sureit isn’t you.
Copyright © 2014 John DeGroote Services, LLC 4
Who Makes Settlement Errors?
• One Study Concluded
• 61% of Plaintiffs Failed to Beat Last Offer
• Defendants Failed 24% of the Time
• Plaintiffs’ Mean Error Was $43,000
• Defendants’ Was $1,140,000
Journal of Empirical Legal Studies 09/2008
-
The New York Times 08/2008
-
Copyright © 2014 John DeGroote Services, LLC
What Is a Decision Tree?
5
An illustration that shows the various possible outcomes
in a lawsuit and helps the parties
evaluate the costs, risks and benefits of each outcome.
““
- Daniel Klein
Copyright © 2014 John DeGroote Services, LLC
““
Why Do a Decision Tree?
Gut instinct, sloppy guesswork and grey hair no longer seem to be enough in complex, high
stakes mediation.
— Geoff Sharp, New Zealand Commercial Mediator and Barrister
Copyright © 2014 John DeGroote Services, LLC 7
Why Do a Decision Tree?
•“Probable”?
•Another Perspective• Events
• Contingencies
• Probabilities
• Timelines
• Costs
• Investment Analysis
Copyright © 2014 John DeGroote Services, LLC
Copyright © 2014 John DeGroote Services, LLC
Copyright © 2014 John DeGroote Services, LLC
How Do You Create a Decision Tree?
10
1 2 3 4
ListLitigation
Events
ConsiderCosts or
Gains of Each
Discount Eachby ProbabilityIt Will Occur
Do theMath
Image from ResolutionTree.com
Copyright © 2014 John DeGroote Services, LLC
Another Example
11
Copyright © 2014 John DeGroote Services, LLC 12
…and Just One More
Image © Litigation Risk Analysis, Inc.
Copyright © 2014 John DeGroote Services, LLC
Responding to the Naysayers
13
• They Objectify Litigation
• Not Everyone Is Rational
• The Parties Won’t Agree on a Number
• The Results Are Unreliable
• They Are Only for Commercial Cases
• Nobody Else Does Them
Copyright © 2014 John DeGroote Services, LLC
But Before You Go . . ..
14
Copyright © 2014 John DeGroote Services, LLC
John DeGrootePresident, John DeGroote Services, LLC
John DeGroote is a former global company general counsel now serving as a mediator, arbitrator and court-appointed trustee in significant disputes. He believes that hands-on leadership, early matter assessment, and aggressive project management drive results.Serves as the Liquidating Trustee to the BearingPoint, Inc. Liquidating Trust through John DeGroote Services, LLC.
Served from 2000 through 2008 as the Chief Litigation Counsel to KPMG Consulting/BearingPoint; eventually led a team of over 40 in-house lawyers around the globe as the Company's Chief Legal Officer from 2008 through late 2009, when he became the Company's President.
Previously practiced with the law firms of McKool Smith, P.C. and Jackson Walker, L.L.P., with a focus on complex technology, commercial, and intellectual property litigation matters against and for various Fortune 500 companies.
Currently serves as settlement counsel to select clients involved in significant disputes.
Received his mediation training from Pepperdine University's Straus Institute for Dispute Resolution in 2005. Has participated in over 200 mediations in approximately 20 states as a client executive, as outside or in-house counsel, and as a party.
Serves as a co-founder to online decision tree tool ResolutionTree.com and comments on litigation management, settlement techniques and negotiation strategies at settlementperspectives.com.
• J.D., Duke University School of Law, 1990
15
• B.A., Mississippi State University, 1986
Copyright © 2014 John DeGroote Services, LLC
slideshare.net/johndegroote
Hickory Street Annex501 S 2nd Avenue, Suite A-700Dallas, Texas 75226
johndegroote.com
(214) 887-3484
Copyright © 2014 John DeGroote Services, LLC 17