Modern Mediation: Anchoring

Let’s talk about anchoring. You know, when one negotiating participant makes a demand or offer far from what the other party would ever voluntarily agree to. The theory goes that anchoring establishes a floor or ceiling that changes the other party’s expectations of what it will take to resolve a dispute. But often, an anchor will be so outrageous that it will polarize the parties and put a quick end to negotiations.

In the mediation context, it could result in one of the parties abruptly walking out of the mediation. So how do you drop an anchor that actually accomplishes the goal of pushing your opponent to be more generous in settlement negotiations, but doesn’t bring a premature conclusion to the process? I have two suggestions: (1) Don’t make an offer or demand that you cannot justify with a credible damage analysis and solid legal support; and (2) Don’t drop an anchor as a bluff. In other words, don’t do it if your client can’t live with the consequences of a walk-out.

Keep in mind that you are not actually looking for your opponent to become more generous—you are trying to make them become more realistic. That means your anchoring offer or demand, even if a stretch, must be realistic.