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Pragmatic Uses for Decision Trees in Settlement Discussions

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Pragmatic Uses for Decision Trees in Settlement Discussions

  1. 1. Pragmatic Uses for Decision Trees in Settlement Discussions Jan 17, 2014 Texas Bar CLE • 12th Annual Alternative Dispute Resolution • Dallas, Texas Copyright © 2014 John DeGroote Services, LLC
  2. 2. Today’s Roadmap • Who • What • Why • How • …and More Copyright © 2014 John DeGroote Services, LLC 2
  3. 3. If you and the other side value your case differently, at least one of you is wrong. Make sure it isn’t you. Copyright © 2014 John DeGroote Services, LLC 3
  4. 4. Who Makes Settlement Errors? • One Study Concluded • 61% of Plaintiffs Failed to Beat Last Offer • Defendants Failed 24% of the Time • Plaintiffs’ Mean Error Was $43,000 • Defendants’ Was $1,140,000 - Journal of Empirical Legal Studies 09/2008 - The New York Times 08/2008 Copyright © 2014 John DeGroote Services, LLC 4
  5. 5. What Is a Decision Tree? “ An illustration that shows the various possible outcomes in a lawsuit and helps the parties evaluate the costs, risks and benefits of each outcome. “ - Daniel Klein Copyright © 2014 John DeGroote Services, LLC 5
  6. 6. Why Do a Decision Tree? “ Gut instinct, sloppy guesswork and grey hair no longer seem to be enough in complex, high stakes mediation. “ — Geoff Sharp, New Zealand Commercial Mediator and Barrister Copyright © 2014 John DeGroote Services, LLC
  7. 7. Why Do a Decision Tree? • “Probable”? • Another Perspective • • • • • Events Contingencies Probabilities Timelines Costs • Investment Analysis Copyright © 2014 John DeGroote Services, LLC 7
  8. 8. Copyright © 2014 John DeGroote Services, LLC
  9. 9. Copyright © 2014 John DeGroote Services, LLC
  10. 10. How Do You Create a Decision Tree? 1 2 3 4 List Litigation Events Consider Costs or Gains of Each Discount Each by Probability It Will Occur Do the Math Image from ResolutionTree.com Copyright © 2014 John DeGroote Services, LLC 10
  11. 11. Another Example Copyright © 2014 John DeGroote Services, LLC 11
  12. 12. …and Just One More Image © Litigation Risk Analysis, Inc. Copyright © 2014 John DeGroote Services, LLC 12
  13. 13. Responding to the Naysayers • They Objectify Litigation • Not Everyone Is Rational • The Parties Won’t Agree on a Number • The Results Are Unreliable • They Are Only for Commercial Cases • Nobody Else Does Them Copyright © 2014 John DeGroote Services, LLC 13
  14. 14. But Before You Go . . .. Copyright © 2014 John DeGroote Services, LLC 14
  15. 15. John DeGroote President, John DeGroote Services, LLC John DeGroote is a former global company general counsel now serving as a mediator, arbitrator and court-appointed trustee in significant disputes. He believes that hands-on leadership, early matter assessment, and aggressive project management drive results. Serves as the Liquidating Trustee to the BearingPoint, Inc. Liquidating Trust through John DeGroote Services, LLC. Served from 2000 through 2008 as the Chief Litigation Counsel to KPMG Consulting/BearingPoint; eventually led a team of over 40 in-house lawyers around the globe as the Company's Chief Legal Officer from 2008 through late 2009, when he became the Company's President. Previously practiced with the law firms of McKool Smith, P.C. and Jackson Walker, L.L.P., with a focus on complex technology, commercial, and intellectual property litigation matters against and for various Fortune 500 companies. Currently serves as settlement counsel to select clients involved in significant disputes. Received his mediation training from Pepperdine University's Straus Institute for Dispute Resolution in 2005. Has participated in over 200 mediations in approximately 20 states as a client executive, as outside or in-house counsel, and as a party. Serves as a co-founder to online decision tree tool ResolutionTree.com and comments on litigation management, settlement techniques and negotiation strategies at settlementperspectives.com. • J.D., Duke University School of Law, 1990 Copyright © 2014 John DeGroote Services, LLC • B.A., Mississippi State University, 1986 15
  16. 16. johndegroote.com jd@johndegroote.com slideshare.net/johndegroote (214) 887-3484 Hickory Street Annex 501 S 2nd Avenue, Suite A-700 Dallas, Texas 75226 Copyright © 2014 John DeGroote Services, LLC
  17. 17. Copyright © 2014 John DeGroote Services, LLC 17

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