NEWSLETTERS › Future Perfect
In November of 2010, 1020 American adults received random phone calls. The recipients of the calls were asked just one question: Which one of the following super powers do you wish you had: Invisibility, the ability to fly, the ability to teleport, the ability to read people’s minds, or the ability to time travel?
As it turns out, this was not an elaborate prank, it was a formal poll conducted by the Marist Institute of Public Opinion. According to the poll, 16% of Americans wanted to fly, 11% wished they could teleport, and just 10% of people wanted to be invisible. However, the majority of respondents – 56% of Americans – wanted the ability to read people’s minds or time travel (exactly 28% opted for each of those super powers).
In some ways, reading minds and traveling in time are the same super power: they allow people to predict what other people will do. Nate Silver demystifies this power in his recent book, The Signal and the Noise: Why Most Predictions Fail – But Some Don’t
Silver is best known for his political blog FiveThirtyEight.com, which correctly predicted how 49 out of 50 states would vote in the 2008 presidential election and how all 50 states would vote in Tuesday’s election (if Florida ultimately gets called for Obama). In his book, Silver argues that many political science experts are no good at making predictions. In a series of surveys in the 1980s and 1990s, for example, experts were asked to make predictions about many major events, including the fall of the Soviet Union, the first Gulf War, and the Japanese real estate bubble. The so-called experts failed miserably. Their predictions were “barely any better than random chance.”
Indeed, according to Silver, the experts “were grossly overconfident and terrible at calculating probabilities…about 15% of events that they claimed had no chance of occurring in fact happened” and 25% of “absolutely sure things” failed to occur. Perversely, Silver found that “the more interviews that an expert had done with the press…the worse his predictions tended to be.”
As any Fox News, MSNBC, or ESPN viewer can attest, media personalities tend to be ideological, rarely hedge their predictions, and speak in certainties. These types of people, who Silver calls “hedgehogs,” expect that the world is governed by relatively simple principles such as “the government is best which governs least” or “religion is the opium of the masses” or “there’s only one way to become a hitter. Go up to the plate and get mad.” While entertaining and comforting, these sorts of pronouncements do not yield accurate predictions.
To the contrary, Silver argues, the best predictors in almost any field—from sports betting, to economics, to politics—view the world in terms of probabilities rather than certainties. Silver refers to these people, who rely more on statistics and observations than abstract theories, as “foxes.” Foxes tend to be more cautious and incorporate ideas from multiple disciplines into their forecasts. Silver’s presidential election forecast, for example, incorporated information from multiple sources including polling averages, recent approval ratings, as well as economic reports. Silver is a fox.
As are many lawyers. Lawyers frequently structure their advice, as Silver suggests, in terms of probabilities instead of certainties. When asked a difficult legal question, lawyers do not tend to tell their clients “I know the answer.” Rather, they tend to advise their clients of the probability that a court, posed with that question, would reach a given conclusion. This is because if you bring the same difficult lawsuit 100 times, you won’t get the same result all 100 times.
Similarly, when putting a dollar value on a legal claim, lawyers often provide a range of values as opposed to a specific numerical value. In fact, lawyers will sometimes value cases in multiple ranges, with each range corresponding to a different stage of litigation. A good attorney might reasonably tell a client, “Yes, you suffered one million dollars in losses, but this is a hard case, there’s a forty percent chance your claims will be dismissed and will be worth zero. Until the motion to dismiss is decided, you should value your claim at $600,000.”
Clients may interpret a lawyer’s tendency to speak in terms of outcome probabilities and valuation ranges as a lack of confidence in his own predictive abilities. But, like sports, elections, and other contests, when legal disputes are predicted in terms of probabilities as opposed to certainty, the prediction is more accurate and allows the client to make better decisions. Only a lawyer with super powers could guarantee the outcome of a case; a good lawyer makes sure the client can see what is possible in the future.
MB welcomes Stacey McFadin. Stacey graduated from NYU Law School and previously practiced at Cahill, Gordon & Reindel.
For the second year in a row, Rishi Bhandari was selected as a Rising Star by New York Super Lawyers.
In two separate mediations conducted by JAMS in 2012, MB vigorously represented plaintiffs in shareholder and partnership disputes and secured over $1 million in confidential settlement payments.
MB obtained summary judgment on claims brought by an insurance company, which alleged that it was owed more than $2 million pursuant to personal guaranties. MB argued that the guaranties did not cover the alleged losses, and, in any event, the claim was barred by the statute of limitations.
For those of you who are looking for ways to help:
Attorneys who would like to volunteer to provide free telephone consultations to individuals affected by Sandy can submit this form.
Several organizations have created "wedding registries" so that supplies such as blankets and hand warmers can be shipped directly to locations where they are needed. Here's an article about this relatively new form of disaster relief. Here is one such registry that was created by the Occupy Sandy organization.