The document discusses the pragmatic uses of decision trees in settlement discussions. It notes that decision trees can help parties evaluate the costs, risks, and benefits of various litigation outcomes by illustrating possible events, contingencies, probabilities, timelines and costs. Decision trees provide an objective analysis that considers all perspectives, rather than relying on subjective guesses. The document provides examples of decision trees and outlines the basic steps to create one. It also addresses criticisms of decision tree analysis and argues they can benefit both commercial and other types of cases.

1. Pragmatic Uses for Decision
Trees in Settlement Discussions
Jan 17, 2014
Texas Bar CLE • 12th Annual Alternative Dispute Resolution • Dallas, Texas
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2. Today’s Roadmap
• Who
• What
• Why
• How
• …and More
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3. If you and
the other
side value
your case
differently, at
least one of
you is wrong.
Make sure
it isn’t you.
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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
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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
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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
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7. Why Do a Decision Tree?
• “Probable”?
• Another Perspective
•
•
•
•
•
Events
Contingencies
Probabilities
Timelines
Costs
• Investment Analysis
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8. Copyright © 2014 John DeGroote Services, LLC

9. Copyright © 2014 John DeGroote Services, LLC

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
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11. Another Example
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12. …and Just One More
Image © Litigation Risk Analysis, Inc.
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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
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14. But Before You Go . . ..
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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
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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
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