BATNA’s Got to Go

In a recent DRLE listserv colloquy, I threatened to save for another day an extended rant about why we are so doggone attracted to using confusing jargon.  That day has arrived.

What’s Wrong with BATNA and All the Other ATNAs?

My mania was stimulated by an exchange of listserv posts about the use of BATNA and the alphabet soup of other ATNAs.

After considering these issues for a while, and especially after working with Michaela Keet and Heather Heavin on the Litigation Interest and Risk Assessment (LIRA) book, I believe that our field should stop using these terms and should substitute other ones.

Why?  Let me count the ways.

  1. We Are Easily Distracted and Confused by Shiny Objects – Like ATNAs

BATNA et al. are examples of popular terms that are widely misunderstood.  In particular, while BATNAs really are courses of action (like going to trial or making a deal with a different party), people often confuse them with the expected values of those courses of action (like the trial outcome or profit from a deal).  Courses of actions are options to be considered, not values to be estimated.

The offender is the word “best.”  As people generally recognize, negotiators should focus primarily on the realistic or probable values of alternative options.  But it makes sense to estimate the value of only the best alternative option, aka the BATNA.  It makes absolutely no sense to consider any other options such as the so-called WATNA, PATNA, ZAPATA, or MYLANTA.

To get your head on straight about this, sit down and read Hiro Aragaki’s rendition of the riot act on WATNAs.  Gosh, even some of Hiro’s students are confused, so we all are in trouble.

But it’s not just them.  Googling WATNA now generates more than 500,000 hits including from prominent mediation associations, mediators, lawyers, law professors, the Harvard Program on Negotiation, Wikipedia, and holy moly, YouTube.  Even damn geniuses like yours truly can screw this up.  Who can forget such classics as:

  1. BATNA is Only Part of the More Important Focus, Negotiators’ Bottom Lines

Because BATNAs are so dang shiny, people often think that they should be the main focus of negotiators’ analysis.  In litigation, the BATNA value (the expected value of the court outcome) is only one element of one’s bottom line (aka “reservation price”).

Bottom lines are important for two reasons.  When parties use a counteroffer process starting with extreme positions and proceeding with a series of concessions, making good decisions in setting bottom lines is important for negotiating effectively.  In addition, bottom lines serve as “trip wires” to end negotiation when parties decide that they cannot reach an acceptable agreement.

To calculate the bottom line, negotiators need to adjust the expected value by considering the tangible and intangible costs of pursuing litigation and going to trial.  By focusing so much on the court outcomes, negotiators (and teachers and scholars etc.) over-emphasize the importance of the court outcome and under-emphasize the importance of intangible costs (and benefits).  Parties and practitioners often ignore or under-value the interests reflected by parties’ intangible costs.

So the shiny BATNA object often distracts people from keeping our eyes on the more important value, the bottom line.

  1. People Often Focus on BATNA Values Rather Than the Assessment Process

Many people talk about BATNAs as if it is fairly easy to calculate the values and use them.  Au contraire.

It’s actually very hard to estimate the court outcomes in many cases because there are numerous factors that affect court decisions.  There are various ways to make these estimates, and all the methods are imperfect.  Lawyers normally estimate court outcomes by doing some combination of legal research, factual investigation, reflection on their experience, and consultation with experts.  One way to estimate the court outcome is to use decision trees, as described in Marjorie Aaron’s excellent book, Risk and RigorMany practitioners don’t want to use decision trees, however, concerned about the validity of results and possible counterproductive effects of entrenching parties’ assessments in seemingly precise calculations.  Decision trees help some people understand the various contingences, but others find the complexity to be overwhelming.  In the LIRA book, we provide a simple framework using decision tree logic, which some people may find easier to grasp, though some may have similar concerns about the usefulness of mathematically estimating the probability and consequences of multiple contingencies.  All of these methods may produce unrealistic results because of numerous cognitive and motivational biases.  So practitioners should try to de-bias their assessments, which is no easy task.

The impulse to consider WATNAs, MLATNAs, etc. reflects the uncertainty of court outcomes.  So it’s important to consider the range of plausible outcomes, ranging from least favorable to most favorable as well as logical intermediate values.  In addition, the assessment of the outcomes should be reviewed periodically during a case as parties learn more about the facts, law, counterparts’ moves, and other factors that may affect the outcome.

Lawyers are notoriously wary about estimating tangible legal costs in litigation, especially at the outset of a case.  The litigation process is very uncertain and dependent on parties’ decisions about how much they want to fight.  Lawyers generally don’t want to spook clients at the outset with high estimates of these costs or risk blowback from clients if the estimates are much lower than the actual costs.  But these costs can have a major impact on clients’ net outcomes and can be major factors in assessments of their bottom lines.

Intangible costs also can have a huge impact on clients’ perceptions of the outcomes and their negotiation strategies, as noted above.  Lawyers generally do not systematically help clients identify or value their interests affected by the process itself. By definition, these costs cannot be objectively valued, but lawyers can help clients place their own values on them.

Assessment of BATNAs – and more usefully, bottom lines – is not merely calculating mathematical values.  BATNA values are “moving targets” that change during a case rather than fixed values that people assume won’t change.  As an example, texts appropriately advise negotiators to take various actions to increase their BATNA value.

The assessment is a continuing process in which lawyers and clients educate each other about the case.  It draws on lawyers’ interviewing and counseling skills at the outset.  It continues as lawyers and clients collaborate to plan for and conduct negotiation or mediation.

While this discussion focuses on lawyer-client interactions in litigation, it can be adapted to other situations where parties negotiate or mediate.

So Why Do We Focus So Much on BATNAs in Our Courses?

Everybody else does it.  It’s in all the textbooks.  It’s in the popular culture.  There are more than 15 million hits on Google.

It’s shiny.  Students (think they) understand it easily.  They like it.

We have been teaching it a long time, and it’s in our reading assignments, outlines, powerpoints, simulations, etc.  It’s a hassle to change.

What the heck else are we gonna do?

An Alternative

I sympathize.

After Sanda Kaufman and Hiro schooled me about my mistaken views, I wrote this post explaining how I lost my way.  At that point, I couldn’t think of a good substitute for BATNA.

Since then, I worked on the LIRA book with Michaela and Heather, which helped me develop the insights described above.  I think that “LIRA” solves many of “BATNA”’s problems.  The book presents multiple methods of estimating the value of the court outcome in a case and shows how to produce a bottom line by deducting the tangible and intangible litigation costs from the expected court outcome.  It provides detailed guidance for lawyers and mediators about helping parties develop and use these concepts to make good decisions in litigation, negotiation, and mediation.

Litigation interest and risk assessment can refer to the assessment process or the results of the process.  People generally can understand the difference between the two from the context, and we can distinguish them explicitly by referring to the process as the “LIRA process.”  In transactional negotiation and other non-litigation contexts, you can simply use “interest and risk assessment.”

Read what all these people think about LIRA:  Peter Benner, Sarah Cole, Noam Ebner, Brian Farkas, Lainey Feingold, Justice John Gill, Steve Goldberg, Dwight Golann, Chris Honeyman, Cheryl Jamison, Léa Lapointe, Michael Leathes, Lela Love, Paul Monicatti, Bernie Mayer, Larry Mills, Ben Picker, Spencer Punnett, Len Riskin, Colin Rule, Andrea Schneider, Donna Shestowsky, Rick Weiler, Hon. James Williams, and Doug Yarn.

Obviously, BATNA and the ATNA family are embedded in the professional and popular consciousness and will survive for the foreseeable future.  If you want to take advantage of the LIRA framework, you can “translate” BATNA into the concepts of what I think is this better framework.  Faculty could require students to read this post to explain the translation.

If this makes sense to you and you want to incorporate these ideas in your courses, check out this post, which includes blog posts and powerpoints you can use in your courses.  If you want to consider requiring or recommending the LIRA book in your course, you can email me and I would be happy to send you an electronic review copy.  I’m also happy to zoom in as a guest speaker in classes.

4 thoughts on “BATNA’s Got to Go”

  1. Hi John, the term BATNA itself, while a useful (if sometimes confusing acronym) is non-sensical: first, agreements are negotiated, so talking about a ‘negotiated agreement’ is tautologous. Second, often the alternative is another agreement.

  2. I offer a contrary view. I believe and teach that BATNA is the most useful thing we can teach in a negotiation course. Of course it is true that some use the concept wrong, and I totally agree that the other ATNAs are not useful, but I don’t think we should abandon BATNA. Nor do I think that LIRA is an appropriate replacement, in that it only covers litigation whereas BATNA is much broader.

    1. I guess we need to agree to disagree, Jean.

      It would be nice if everyone followed Hiro’s guidance, but considering DR experts’ own confusion, I’m not holding my breath. So I expect that use of “BATNA” is likely to continue to create confusion and distract from important issues and interventions.

      In litigation, focusing so much on BATNAs over-emphasizes arguments about what would happen in trial (that is not likely to occur given the low trial rates). Of course, people should consider the BATNA values if there is a realistic possibility of going to trial, but our great focus on BATNA values distracts attention from parties’ interests other than getting favorable court outcomes.

      For many parties, these other interests are much more important than expectations about what might happen in court. By focusing so much on BATNA and ignoring or giving short shrift to other interests, faculty and practitioners send the implicit message that the other interests aren’t very important.

      In negotiations that aren’t in the litigation context, the same principles can be applied as in litigation. It’s fine with me to call it “IRA.”

      In non-litigation contexts, in addition to considering the expected value of the alternative courses of action (such as other possible transactions), it’s important to develop bottom lines by explicitly considering the tangible and intangible costs of the alternative options. In these situations, it’s also important to focus on the process of developing and using the calculations, not just making the calculations themselves.

      I wonder how many faculty and practitioners carefully address these additional considerations. Probably not as many as would be good for students, practitioners, and especially parties.

      Our goal is to improve parties’ decision-making. I believe that a L/IRA approach better achieves that goal than the way most people use BATNAs.

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