Introduction to Constructive Negotiations in Divorce…
What is constructive negotiations? It is a technique for which both parties work together with some level of transparency to achieve an outcome that recognizes the desires of both parties. Effectively, these negotiations pursue the proverbial ‘win/win’ outcome.
‘Constructive Negotiations’ offers an amicable alternative that ideally can reduce emotional trauma, reduce legal expenses, and gain the most cooperation from the spouse to achieve the most valuable outcome.
Typical Negotiations…
As is typical in the divorce process, the spouses need to divide and give up ownership of assets that at one point they jointly owned. Emotions may be high and retribution and emotional validation may be an underlying motivator. A person faces relinquishing to someone they may feel has harmed them, and conflict forms. When the priority deviates with the intent to vilify and punish the spouse, that effort frequently will cost both parties and harm the value equity for both.
This focus frequently fosters a sense of entitlement or righteousness that can hinder progress. In these cases, the entity employs brute force. This commonly includes the use of intimidation or some similar means to strong-arm the spouse to acquiesce. Most divorces are not friendly, so such tactics normally embolden the spouse to disagree and create a more contentious (and expensive!) divorce.
Consistent with such contention, many of these tactics embrace extreme versions of Russian negotiations techniques.
While a weak or frustrated spouse may acquiesce, more commonly, this approach protracts negotiations, fosters distrust, and obfuscates outcome. This likely increases legal costs for proposals that result with no movement towards compromise.
Without compromise and collaboration, the couple finds no recourse for which they can have any control over the negotiations and still retain a path to settlement. The couple then loses control, and the settlement advances to the most costly and traumatic alternative: trial.
A Better Technique…
A more eloquent tactic is to seek win/win scenarios. These exist when both parties feel that they are gaining from the transaction. If both parties can acknowledge that an outcome needs to be equitable to both spouses, as most states’ statutes dictate anyways, they can pursue a negotiations approach should be less expensive, less traumatic, and likely more lucrative.
Recognizing equity for both spouses does not mean that one spouse needs to harm themselves unduly. First and foremost, each party should be clear and true to their desires. The main adjustment involves each spouse communicating these desires to each other with the proviso that any proposal needs to acknowledge the other spouse’s desires. This differs from traditional negotiations that typically hide desires so the other party cannot exploit. Rather than simply proposing who gets what without context, proposals acknowledge and articulate the desires articulated by both spouses.
The notion of a win/win is founded on two principles. First, two different people have two different sets of metrics to value success. They may overlap, but for example, one may most value long term financial stability while the other may most value achieved net present value. One spouse may have a great emotional connection or utility for a particular asset, like the marital home. The second principal recognizes that many assets and liabilities can be split evenly or not. This way, each can be treated as a quantity of capital to divide with flexibility and transparency.
These negotiations are founded on modest transparency. Objective analytic insights and justifications greatly lend credibility, which is important because lack of trust is natural. Without the capabilities of Baron Analytics, such as detailed financial forensics and economic research, win/win proposals will be harder to identify, detail, and justify. Baron Analytics’ certified cost analysis techniques introduce a level of transparency, credibility, and detail that otherwise would not be available to catalyze the trust and understanding that is so important to catalyze agreement. We produce verifiably objective results with objective data. When needed, we can help guide either spouse to validate our findings to increase comfort with a proposal.
The divorce process is a great candidate for constructive negotiations because family assets are diverse and difficult to compare directly. After tax versus pre-tax, lump sum versus annuity, absolute value versus condition of sale value, cash only value versus utility value, etc. Many assets cannot be divided cleanly (such as a primary residence) or easily (such as a life insurance policy). Each spouse may value one or more of these tradeoffs or elements differently, and that forms the basis for the win/win.
A Better Outcome…
Translating the many piece-parts of an estate into assessed and valued elements and then coalescing these elements into two distinct estates is complicated. The complications are magnified when proposals bounce back and forth, and values need to be re-assessed and re-optimized.
Baron Analytics organizes financial data in our sophisticated tools. With the richness of our data forensic models and techniques, we can compare the value of dissimilar assets and consider factors such as cash flow, deflation, and lifestyle risk to ensure our clients negotiate to settlements that they understand and will best support their goals. Clients gain the competitive advantage of understanding all these tradeoffs.
Our client can select their optimum proposal, and as valuable, the client can articulate the value that the proposal offers to the spouse. If the spouse does not have a similarly effective financial analyst to optimize their proposal, they are left to refute the mostly irrefutable details of the client’s proposal. That is a massive advantage to Baron Analytics’ clients.
Likewise, no one in negotiations should simply trust the proposal of the other spouse, but validation could be difficult. Our models clearly audit proposals and offer justifiable evidence to quantify any errors. Our clients reduce their risk of accidentally accepting a poor proposal, which unfortunately is a common occurrence in settlements.
In mediations, proposals can move the elements of the family’s estate back and forth in different combinations and different proportions between the spouses. Critiquing proposals and making counter-proposals can be quite complicated and overwhelming with the added pressure of time. Because we already have all the attributes of each element of the estate assessed, we can quantify and optimize any combination of proposals almost immediately so you can drive negotiations while your spouse drowns in the deluge of complex financial details.
A Parting Thought, in Summary…
Baron Analytics incorporates social, financial, economic, and accounting best practices to value and compare dissimilar assets and present them to clients and lawyers in ways to effectively identify win/win negotiating solutions. Whether planning proposals, navigating real-time mediations, or presenting at trial, Baron Analytics has the skills and tools to help a client set goals, quantify the value of those goals, and negotiate a settlement that achieves those goals.