Nudging your Client

people-office-group-teamImagine you outline to your client the possibilities of two court actions where he is the plaintiff in one case and the defendant in another. Legal fees are no longer a cost consideration. In the first case, you advise that he could settle and receive $70,000 or have a 90% chance of the court awarding him $80,000. In the second case, you advise that he could settle and pay $70,000 or have a 90% chance of the court deciding he should pay $80,000.  If he was like most people, in the first case he would settle for the $70,000. In second case he would likely go to court and risk paying $80,000. People prefer sure things when it comes to gains, and take risks when it comes to avoiding losses. Lawyers explaining the consequences of a certain legal action should be prepared that a client may be prone to more risk taking to avoid a loss.

This simple example captures a substantial portion of Kahneman’s book Thinking: Fast and Slow in addition to Thaler’s book, Nudge. Kahneman and Thaler separately won the Nobel Prize for work in their respective fields. The Obama administration successfully incorporated the concept of ‘nudges’ into their policy work. These theories on behavioral economics can contribute substantially towards the practice of law and the attraction and retention of clients.

Kahneman separates our thought process into a simple dichotomy of System 1 thinking, fast, and System 2 thinking, slow.

System 1 thinking explains why people feel losses twice as much as they feel comparable gains. Fast thinking comes into play when you stand up to object to a line of questioning without knowing why, when you sense a brief misses something, or when you believe that there really is a tiger outlined in the grass just ahead. Regardless of your personal circumstances, fast thinking comes in handy to avoid being eaten. Figuratively or literally.

Fast thinking includes intuition. Although, thinking with your gut can be dismissed as superficial, Kahneman recognizes that experts glancing at a situation can reach a correct conclusion simply based on continuous experience.

Intuitive thinking guides the halo effect. Someone’s reputation, and ego, could proceed them. Or exceed them. This may give this person an aura of invincibility in that they have won so often they will likely win again. If you, or a court, provides that person the benefit of doubt, a halo so to speak, then you should dissuade yourself of this notion. Rest assured, the rest of the day has not yet been written. Anything can and will likely happen.

Information immediately available primes system 1 thinking and feeds into the ‘anchoring’ concept. Kahneman provides the example of a panel of German judges asked to roll a weighted die that came up with three or nine. The judges were then asked to provide a ruling on a certain fact situation. Although it should not have mattered, judges rolling a nine more often gave higher sentences that the judges that rolled a three.

System 2, slow thinking represents the traditional lawyer mind; collecting facts, analyzing those facts, and providing a researched opinion.  Relative to fast thinking, slow thinking generally has to be dragged into the thought process if the mind feels that fast thinking ‘has got this covered’. Slow thinking eats Doritos while watching TV. I prefer the term ‘critical thinking’ as slow thinking suggests something negative.

Understanding how prospective clients think can impact how you market your law firm. Imagine yourself a prospective client landing on your firm’s website. The website asks if you want to allow cookies in order to enhance your website experience. Being like most people, you sort of realize that cookies attach to your browser benignly. But you read something about them somewhere and your overall impression leans towards not allowing cookies. You congratulate yourself on being prudent, but your web experience becomes muted. The law firm suffers an opportunity cost.

Continuing your search, you land on another site that clearly, but not alarmingly, states that a small piece of code, a cookie shall be added to your web browser. Once again, you don’t know anything more about cookies than you did five minutes ago, but you proceed regardless. Your web experience becomes far more customized, and the law firm discovers substantial information on future clients’ interests.

Most clients intuitively refuse to accept cookies given the choice. The critical part of the mind would not examine the situation since there did not appear to be an immediate need. A client merely advised of cookie use would likely proceed, confident in the notion that someone vetted the cookie usage for them. The concept of providing a default cookie option nudges the client into a better result.

One would think that providing a range of options provides greater satisfaction than fewer options. However, Thaler says that having too many options leads to greater stress and reduced satisfaction. Therefore, providing a default option increases the probability that a correct choice is being made.

Thaler euphemistically refers to this as libertarian paternalism. People make better decisions by the correct arrangement of choices. The person in charge of this arrangement becomes the choice architect.

A lawyer becomes a choice architect in numerous ways. In speaking with a client and laying out their options, the phrasing of options definitely impacts the client’s choice. Although two handed lawyers, on one hand this and the on other that, may feel that they want to leave the choice of options strictly to the client, one should determine what level of guidance the client requires. Normally they would want the lawyer’s best recommendation.

Thaler parses apart the various tools that a choice architect has into five main aspects: Incentives, mapping, defaults, feedback, expect errors and structuring complex choices. For example data visualization and mnemonics of legal information can illustrate the difference between complex choices. In retaining clients, understanding the process behind making decision choices increases your value proposition defined as the benefits relative to the costs. By making the correct choice easier, you have channeled your client to the correct choice. You have reduced not so much the monetary cost to the client, but the stress cost of making that decision.

In making an intuitive choice, clients want to know what other people did in similar situations. Thaler found that a need to conform easily influences peoples’ choices. Clients could operate on this basis to decide how to proceed on a case for example. They would rely more on what friends and other people have done in a similar situation. Therein lies the importance of stories. Relating other individual’s stories can add additional comfort to clients and make the decision easier. Adding stories to your advice makes a client’s choice easier.

To demonstrate this, Thaler identifies greater compliance in hotels where people are advised the guests before them selected the economical option of not insisting upon having towels replaced daily. People like to be part of the crowd as this makes their decision making easier. Your law firm stories should reflect how generally others have proceeded.

Explaining these concepts should be incorporated in to continuing professional development for all lawyers. As a final example, do you think it is more likely that the number of lawyers in Canada is between 60,000 to 70,000 or 70,000 to 80,000?

As you can see from the above paragraph, we have provided some anchoring information along with some anchoring information in the very first paragraph. The federation of law societies lists one hundred and seventeen thousand lawyers practicing today. When people rely upon their intuition, they can be swayed by other factors. These innovative concepts require greater examination and incorporation into today’s law practice particularly in cases where they might operate to your client’s detriment. Did you feel the nudge?

Startup Stock Photos

Source: startupstockphotos.com

Mnemonic

The new immortals: What legal status should be granted to artificially intelligent persons? -Canadian Lawyer

pexels-photo-97077Immortals shall soon walk among us. They may also crawl, roll and perhaps hover. Yes, definitely hover. The immortals refer to artificially intelligent persons, and by “us” I mean natural persons.

The European Parliament Committee on Legal Affairs recently released a report recognizing that humankind stands on the threshold of an era of sophisticated robots and other manifestations of artificial intelligence. The committee saw the need to legislate this area relatively quickly as self-driving cars are making their appearance. The fundamental question is what sort of legal status should be granted to AIPs? Natural persons want to avoid any “Battle of the AIPs” future scenarios.

A reference to Mary Shelley’s Frankenstein; or, The Modern Prometheus dramatically starts off the committee’s report. The committee thought that by addressing people’s real concerns upfront, they could deal with the more substantive issues. The committee recognizes that people have fantasized about the possibility of building intelligent machines and of achieving potential unbounded prosperity. The committee does not mention drones with laser canons, but you just know they were all fantasizing about that.

Other person “types” provide potential guidance. Corporations occupy a separate category of legal persons in an attempt to reach personhood. A corporation is a legal person by legislation. In the 1973 sci-fi film by the same name, Soylent Green may be people, but corporations are not people. “Corporations are people, my friend,” said U.S. presidential hopeful Mitt Romney in 2011, and Democrats took him to task for this statement. “I don’t care how many times you try to explain it,” U.S. president Barack Obama said at one point. “Corporations aren’t people. People are people.” A person falls into the legislative definition of a natural person, and the corporate experience shows where the AIP legal status question may end up.

Corporations have first amendment rights and can advocate for certain political parties. Should AIPs be provided similar rights, and if they could vote for a particular party, what sort of governmental structure would they prefer? Anarchy would be a good bet, and not the cloak and molotov cocktail carrying kind. German philosopher Immanuel Kant identified anarchy as “law and freedom without force.” AIPs would not have the billions of years of upbringing requiring force to deal with predators and competitors. They might learn that on their own, and perhaps to our detriment.

Corporations can own property but don’t have personal privacy rights. One can imagine AIPs creating new patentable types of software. If your AIP demanded privacy, what would your reaction be? Once your teenager makes the same request in your house, your first compulsion might be to sack the room and look for drugs or an old-fashioned diary. For an AIP, would you look for secret caches of information, or heaven forbid, mind-expanding cloud-based storage?

Corporations can also divide like an amoeba and create brand new little entities. One can easily imagine AIPs creating more advanced AIPs. Shelley’s creature demanded that Frankenstein “create a female for me with whom I can live in the interchange of those sympathies necessary for my being.” If AIPs created little AIPs, should we — could we — stop them? The age of consent does not apply here. An AIP could easily become “older” than any builder if an AIP can download the wisdom of the ages overnight and join the ancients. How could one supervise this potential procreation proclivity in AIPs? In Canada, the government has no role in the bedrooms of the nation. The U.S. government appears to be in every intelligent device, so it may be supervising already.

In describing artificial intelligence, the committee outlines how the present legislation does not encompass machines that become autonomous and self-aware. A machine can be built, loaded with software and then go on to learn from its environment. This new environmental learning suggests that the AIP can determine its own actions and learn from its experience and failures. AIPs have an advantage here since the majority of natural persons still struggle with learning from failure.

If an AIP can decide its own actions and causes harm, then legal liability can shift from the builder over to the teacher providing the environment. If an AIP can operate independently with its environment and be held accountable for its own actions, then it could be held strictly liable. Strict liability requires that a plaintiff show that the damage occurred and a causal link. This differs from negligence in that there is no need to establish the same duty of care, standard of care and breach of that duty of care. Strict liability would be allocated between builder and eventual teacher. The teacher and the surrounding environment impacts the liability shift between builder and teacher. This shift would be extremely difficult to establish in that it may take a village to raise a child, but a vast social media network environment raises an AIP.

The committee suggests an ethical framework of beneficence, nonmaleficence and autonomy, and fundamental rights such as human dignity and human rights, equality, justice and equity, non-discrimination and non-stigmatization, autonomy and individual responsibility, informed consent, privacy and social responsibility. Whether these ethics and fundamental rights will be offered to AIPs remains unclear, but sauce for the goose is sauce for the gander.

Natural people tend to anthropomorphize animals and objects, and this tendency may provide greater rights to AIPs. Do you feel bad if your kitchen table ensnares your Roomba? Would you feel even worse if it was trapped and you had earlier placed googly eyes on the Roomba? If so, then you would likely agree that AIPs are entitled to receive ethical and compassionate treatment. But would they need it or are we simply making ourselves feel better?

The committee suggests the need to include a kill switch (opt-out mechanisms). I will shorten this to “OOM.” The OOM euphemism provides somewhat of a guilt release. Humanity can delude itself in the belief it has control over any situation, but as Kurt Vonnegut Jr. wrote in The Sirens of Titan, “The only controls available to those on board were two push-buttons on the center post of the cabin — one labeled on and one labeled off. The on button simply started a flight from Mars. The off button connected to nothing. It was installed at the insistence of the Martian mental-health experts, who said that human beings were always happier with machinery they thought they could turn off.” If you have difficulty in OOMing your faithful Roomba, think how hard it might be if it asked you to reconsider.

To alleviate this OOM situation, I would recommend that readers take their favourite mind/body relaxant and consider the following: Consider if, instead of immortality, AIPs live a limited number of years. Science fiction covers both ends of the spectrum of planned obsolescence of the most brutal kind to the inability to self-terminate. If we incorporated a pre-determined lifespan, would we tell our AIPs the exact date? We could leave the date determination to a random number generator entitled Final Actual Time Expiry, or FATE. Perhaps again, sauce for the goose is sauce for the gander.

 

Previously on Canadian Lawyer

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Negative Space

Source: negativespace.co

Stifled Life

Stifle just suggests preventing a natural part of being. Stifling a laugh seems to be the proper thing to do when laughing out loud would be inappropriate. But when you move to stifling growth, it seems to be inappropriate. You move along to stifling your own life, well that seems to be something that we all do but now we are just used to it.

We need to think that we are stifling our lives as if we are stifling laugher. Just think what that would be like if we lived unstifled!

via Daily Prompt: Stifle

Brilliant Actions

I have a fond memory of when my boss called me brilliant in a room of people. I had come up with an innovative way to double our matched funds from a particular foundation. Mind you, we all were in a bar. And the room was full, but only one other person was at our table and the rest were dancing. And this was after several rounds of beers and one round of tequila shooters. And this was to raise courage for the flaming sambuca shooters that were just coming.

So this may not have occured during a regular performance review, but I still count it!

 

Brilliant

Biking Cambodia

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The past year went by fast. My friend and I spent two weeks biking in Cambodia and Vietnam. The people were fantastic. The food was also incredible. There is little refrigeration, so everything had to be fresh.

The BackRoads group put together a great tour for the seven of us. Here we are passing by a portion of the wall surrounding Angkor Wat.

Biking is a great way to get in touch with the area and the culture. We have another tour coming up perhaps in Death Valley. This will be quite the transition, but a great way to break up the winter.

 

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Here we are receiving a cermonial blessing by the Monks. It must have been well water. It was extremely cold and refreshing.

 

I’m the closest person.