The Economics of Selling Co-resolution

Decisions between alternatives can be, in my opinion, the most mentally exhausting of the cognitive functions, and decisions about how to address a dispute are often the most important moments in affecting the situation.  Choosing the wrong ADR process could waste resources or further and trench the parties in their dispute or feelings of hopelessness.  In my last blog post, I argued that the dispute resolution professionals should offer a continuum of services and allow market forces to decide which process should address which dispute.  Now, let's look at how that choice will be made in relation to co-resolution.

Co-resolution offers disputants facilitated negotiation (as the co-resolvers guide the discussion and negotiation to resolution) and also personal advocacy and/or coaching in communication and negotiation (as each co-resolver assists a separate party in participating optimally in a cooperative negotiation).  Parties comparing co-resolution to mediation and litigation will consider it in terms of the cost of two ADR professionals versus the cost of one mediator (offering facilitated negotiation only) versus the cost of legal advocacy (offering the application of legal rights at the cost of potentially-escalating litigation).  So, how is this comparison weighed?

People do not make choice in a vacuum.  According to Dan Ariely, "[h]umans rarely choose things in absolute terms.  We don't have an internal value meter that tells us how much things are worth, rather we focus on the relative advantage of one thing over another and estimate value accordingly" (Predictably Irrational, 2008)  Thus, every decision is defined by the available alternatives.  Furthermore, Ariely and other behavioral economists found that, when confronted by three choices, people largely opt for the middle choice, considering it to be better than the cheapest option but more reasonably-priced than the most expensive option.  This is why stores will offer products in a continuum of increasingly-expensive features and quality.  Fun fact: by offering one disproportionately (but not outlandishly) expensive dish, a menu will motivate restaurant patrons to purchase more-expensive meals than they would have ordered had the lavishly expensive option not been present.

A note of caution about offering choices--too much choice can backfire.  Ariely also notes that, when confronted with the choice between 26 gourmet brands of peanut butter and only 6, people are much less likely to buy peanut butter at all (they are likely overwhelmed and avoid the exertion of mental energy by not making a choice).  Thus, having a mere handful of possibilities makes the decision-making process easier.

So, how does this affect you, an ADR professional offering co-resolution to potential clients?

One problem addressed by economics is how to broaden the market for goods and services.  In other words, "How can I sell a hamburger for $4.00 but also serve customers who only have $3.00?"  The answer is to offer a basic hamburger for $3.00 while also offering a cheeseburger for $4.00.  Because that thin square of cheese-substitute was not purchased with a one-dollar bill (despite the fact that both are known as "singles"), this approach optimizes the number and satisfaction of customers.

As I concluded in my previous blog post, dispute resolution professionals should offer disputants a variety of different processes to address their interpersonal problems. This benefits the disputant by providing them with the ability to choose a process that will most effectively resolve their problems, and it benefits the dispute resolution professional by opening their services to more disputes. If, for example, a dispute resolution professional offered mediation and/or collaborative law, and was approached by a dispute that needed more involved assistance than is offered mediation but was not complicated enough to merit, or resourced enough to afford, the assistance offered in collaborative law, then perhaps a middle-ground approach like co-resolution would be the preferred choice of the disputant.

Applying these lessons, mediators could broaden their services and address more disputes by offering co-resolution.  To illustrate how this would apply to attorneys, I will use myself as an example.  I operate a law office in which I offer litigation (which is expensive and often inappropriate for personal, largely non-legal disputes) and mediation (which suffers the intake issues I described two posts ago).  Because I do not offer a process for addressing personal, non-legal problems, these situations will remain unaddressed and my practice area remains narrow.  If I had a partner co-resolver in my office and could open my practice to dealing with these as well, my clients and my practice would benefit.

And, if disputants are offered mediation ($), co-resolution ($$), and litigation ($$$), they are likely to choose co-resolution.