By Alan R. Berkowitz
Alan R. Berkowitz is a mediator with Judicate West, specializing in individual and class action cases. He has resolved hundreds of cases involving all types of employment matters, including wage and hour class actions and PAGA claims, many of which resulted in seven-to-eight-figure settlements. Before retiring from the practice of law to become a full-time mediator, he was a partner with Bingham McCutchen, managing partner with Schachter Kristoff Orenstein and Berkowitz, and Regional Attorney at the NLRB, Region 32. He has tried over 50 cases in state and federal courts and administrative agencies on behalf of both defendants and plaintiffs.
Over the years there have been numerous studies of lawyers' ability to accurately predict case outcomes and value. Although different methodologies have been used in various studies, essentially comparisons were made between initial predictions or settlement demands and offers and the ultimate case outcome. In all studies that this writer is aware of, the conclusions are the same-lawyers are not particularly good at predicting outcomes. For the most part lawyers were overconfident in their predictions, failing to achieve their expressed goal in a significant percentage of cases.1
Overconfidence exists in a wide variety of contexts but in the legal profession it may be influenced by a lawyer's professional obligation requiring diligence to represent a client zealously. In doing so, lawyers tend to express confidence in their positions and advocate persuasively. But can this skew their reasoning? Some research has shown that overcon-fidence is more prevalent when the predictor has some degree of commitment to, and emotional investment in, the outcome. Further, lawyers may engage in wishful thinking-believing a certain outcome is probable simply because of a desire to reach it.2 Moreover, the extent to which lawyers believe they can take steps to increase the likelihood of a desired result may lead to overconfidence. This "illusion of control" may cause lawyers to underestimate or fail to appreciate the extent to which other factors may influence the outcome.3
Overconfidence and the failure to make realistic and objective projections of case outcomes may lead to settlement failure or bitter disappointment after trial. However, various actions can mitigate overconfidence bias. For example, peer review of the case by other lawyers can provide invaluable feedback about the strengths and weaknesses of the case, and may help to form a more objective projection of the likely outcome. Also, more formal processes such as Early Neutral Evaluation have proven successful in changing initial assessments of the case.4
Finally, the input of an experienced third party neutral, such as a mediator, can be invaluable to establishing a realistic and objective projection of case outcome.5 Parties invest a lot of time, resources and money in mediation. They should take care in the selection of a mediator and should have confidence that the mediator selected has the experience and ability to evaluate the case objectively. Be prepared to openly listen to your mediator and adjust expectations when appropriate. A self-serving expectation of one party that exceeds the...
