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Further Discussion of the Value of Decision Tree Analysis
for Lawyers, Clients, and Mediators

Professor Aaron has been using decision tree analysis in her mediation practice, has taught it to lawyers, mediators and law students, and has written about it for more than three decades. Her book: Risk and Rigor: A Lawyer’s Guide to Decision Tree Analysis for Assessing Cases and Advising Clients (DRI Press 2019)[1] sets forth the basics and provides guidance for its application in more complex cases,  and how it can be integrated into client counseling and mediation practice.[2]  There’s also an accompanying website – Riskandrigor.com, which contains several chapters and little videos for readers who wish to complete some of the step-by-step exercises in the book’s Chapter 3 – the “How Tos.”

 

As she writes in the introduction to Risk and Rigor:

 

Even in a relatively simple case, building its decision tree structure—in graphic form, on paper or on screen—helps make future abstractions of risk and possible outcomes real, and it shows them in sequential and logical order. Needless to say, building a decision tree is all the more helpful in a more complex case. The tree structure is the case map. It enables the client to see where the lawyer’s discussion of motions, issues, liability theories, and damages ranges fit on that map, on the various paths to an outcome. A tour guide may describe a winding and treacherous road ahead, but the prospective rider will consider the journey more carefully if he sees it mapped on the terrain. Of course, it’s helpful that a client can also show the map—the decision tree graphic of the case—to other important players, whether fellow executives or a concerned spouse.

 

…….for the lawyer aspiring to a “fully informed client,” each juncture or turn along the tree’s branch paths is a natural invitation for client questions and discussion. As lawyers, many of us tend to talk quickly through complicated law and process; we wave with a broad stroke through legal theories or damages ranges. We may assume a client’s familiarity with legal concepts and procedure, or that the client absorbed and remembered previous explanations. At minimum, building a decision tree for a client’s case and discussing why it looks the way it does also forces us to slow down. The process facilitates slowing down to explain each risk and possibility and to wait for confirmation of client understanding before moving on to the next segment of the tree. Often, the exercise also helps the client create emotional distance from the case and the idea of settlement.

 

Yes, similar calculations can be done with a spreadsheet and other decision-making approaches can be useful. However, in my view, the full-blown graphic decision tree is a singularly worthwhile exercise when the client’s decision rests on understanding, acknowledging, and coming to terms with foreseeable risks and possible outcomes, tangible and intangible, as the case unfolds. For a lawyer, very simple cases don’t require a tree. We get that overall settlement value suffers in the face of a real threat of dismissal on an early dispositive motion, or a potentially valid motion to eliminate a fraud claim. However, for more complex cases, the process of building a tree enforces the discipline of considering more nuanced questions: Is summary judgment really just all or nothing in this case? Might different potential rulings on the motion impact evidentiary issues down the line? With a limited budget for discovery or experts, where should we invest dollars to maximize our client’s chances of successor, at least, to maximize settlement value? What is the relationship between linked risks and outcomes?

 

There is simply no substitute for seeing the more complex and nuanced map of interplay between procedural questions, legal issues, and possible outcomes. Sometimes, mapping the case by building a tree facilitates a less-than-obvious decision such as where to file, when choice of law questions are complex and state laws and judicial or jury temperaments vary. The tree gives the lawyer a sense of the whole picture, of the ways different issues fit together in a complicated case. As litigation unfolds—an expert report proves disappointing, a fact witness is unassailable on deposition—adjustments to the tree’s probabilities or sketched paths may be warranted. And seeing where the fortunate or unfortunate development fits helps us to avoid over-weighting or under-weighting its significance.

 

In sum, lawyers and clients benefit from rigorous, clear, and honest ways of reaching understanding, prediction, conclusions, and advice. And claims to analytical rigor require deliberate consideration of factual and procedural uncertainties and their probabilities, strategic choices and their impact, and a full range of potential outcomes and their likelihoods. A client should be able to see the case’s possible pathways as they may be mapped in his lawyer’s mind. There’s great benefit to the lawyer’s analysis being transparent and accessible for discussion with both the client and attorney colleagues working on the matter.

 

Skeptics of the method sometimes argue against the value of decision analysis in legal practice because it is built only upon imperfect numerical estimates of probabilities and damages. Yet, as will be discussed further, the more ubiquitous prose analysis has no greater claim of accuracy or perfection. Moreover….lawyers who foreswear formal decision tree analysis still inevitably estimate probabilities and outcomes when recommending settlement numbers or ranges to their clients, just subconsciously and not methodically.

 

The words of Professor Howard Raiffa are wise and on point. In a post-retirement, reflective piece, “Decision Analysis: A Personal Account of How it Got Started and Evolved,” Professor Raiffa wrote: I’m reminded here of the complaint that it seems wrong to build a logical edifice on such imperfect input data, to which Jimmy Savage responded, “Better to construct a building on shifting sands than on a void.” Here, the ‘void’ being no use of judgment inputs. 1

 

My workshops, courses, & presentations on decision tree analysis can be found by clicking here.

My book and articles on decision tree analysis can be found by clicking here.

 

[1] While hard copies are available  via Amazon.com, chapter-by-chapter pdfs are available free of charge at the DRI Press website.

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