#CPRAM21 Day 2 Opener: Carlos Hernandez Presents Five Principles of Prevention

Former CPR Board Chairman
Carlos Hernandez

By Antranik Chekemian

Carlos M. Hernandez, recently retired Chief Executive Officer of Fluor, opened the second day of the CPR 2021 Annual Meeting to an online audience of about 180 conflict resolution professionals focusing on dispute prevention techniques.

Hernandez, a former CPR chairman and a current board member, reflected on how his perspective on dispute resolution has evolved throughout his professional career. He said, “As I matured as a lawyer, especially after going in-house, I began to understand that disputes often had implications well beyond, and more material,  than the immediate conflict.”

Coming out of law school, said Hernandez, “my career goal was to get the opportunity to try to win cases. I wanted to deliver favorable outcomes and of course I wasn’t too concerned about the business relationship between my client and their adversaries. . . . If I delivered a win, regardless of how I got there, within ethical bounds of course, the post-dispute relationship was not my concern.”

He said his experiences as a lawyer and then as CEO have led him to think of litigation as a last resort, ADR as a better alternative, and conflict prevention as best practice.

He reflected on the decade in the construction industry and how the industry players suffered staggering financial losses with bankruptcies and lost projects. This upheaval, said Hernandez, involved tremendous amounts of litigation, much of which might have been prevented. “And the cost and destruction of litigation itself has contributed to the demise of contractors and projects, and of course, the careers of many good people,” he said.

Hernandez outlined principles he found helpful in conflict prevention, noting that these principles are still frequently disregarded.

He first emphasized that “contracts need to be fair and capable of being executed by both parties. The ‘I win, you lose’ approach often results in both parties losing.” Hernandez noted, “Entering into a bad deal with the expectation that one will work things out, or solve disputes through negotiations, frequently results in solving the dispute through costly formal proceedings.” He also acknowledged the significant imbalance in market power, often resulting in bad contracts.

Second, Hernandez mentioned the importance of entering into contractual relationships with parties that will live by the terms of the contract–meaning that parties should not take contract terms as mere suggestions. “Have some degree of trust in the counterparty and respect the bargain. Seek partnership rather than an adversarial relationship with your counterparty in the performance of the contract,” said Hernandez.

Reflecting on the keynote address of Dana Bash, CNN’s chief political correspondent (see CPR Speaks post yesterday here), about the lack of personal relationships among Beltway politicians, and the resulting lack of conflict resolution in the federal legislature, he pointed out that this theme transcends institutional boundaries.

He recommended alignment sessions at the inception stage of business ventures as ways to discuss potential uncertainties. For example, one can establish communication channels even beyond the terms of the contract. These sessions, by building working relationships, have led to greater trust, better communications, and fewer disputes, said Hernandez.

Third, Hernandez encouraged lawyers to plan for good-faith disagreements and to negotiate contracts that contemplate that disagreements will arise, and that have prescribed means of addressing them in a prompt and business-like manner.

Conflict prevention provisions, he said, should be as standard in contracts as conflict resolution provisions. This may include having a third party providing nonbinding opinions such as a standing project neutral who has an ongoing relationship with the parties and knowledge about the project during its lifetime.

His fourth principle was about confronting potential disputes early. There is often a tendency to avoid addressing potential disputes early, he said , but typically, conflicts do not get better with time.


Arguments for resisting addressing an issue with a customer early on include that it would damage the relationship and that it would make continued execution of the contract more difficult, or that it would adversely affect the prospects for future contracts.

Hernandez, however, noted that one does not have to communicate in an adversarial or threatening way. “Disagree in a respectful way, don’t overstate your position, and leave the door open.  . . . I see it as an approach with the best interests of the client in mind,” he emphasized.

His final principle was that it is seldom too early or too late to engage a neutral third party for assistance, when the contracting parties are at odds. Hernandez concluded: “If all methods of conflict prevention have been exhausted without success, then mediation is a way to engage and settle discussions with third party neutrals that is worthy of pursuing.”

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Carlos Hernandez is adapting and expanding his presentation for the March issue of Alternatives to the High Cost of Litigation, which will be available at the end of next month at www.altnewsletter.com. Follow CPR on Twitter @CPR_Institute and Alternatives @altnewsletter.

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The author, a second-year student at New York’s Benjamin N. Cardozo School of Law, is a CPR 2021 intern.

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James Mattis’s #CPRAM21 Second-Day Keynote Focuses on Listening to Resolve Conflict

General Jim Mattis during his Zoom #CPRAM21 keynote on Jan. 28.

By Amy Foust

Thursday’s CPR 2021 Annual Meeting lunchtime keynote by James N. Mattis, a former U.S. Secretary of Defense for the first halt of President Trump’s term and a four-star general, reflected on conflict resolution and prevention for the business audience. 

Mattis began his comments by musing on the irony in inviting a war general to #CPRAM21, to speak to a group devoted to preventing conflicts, but went on to articulate a clear and concise plan for national reconciliation and healing.  He emphasized committing to local civics action, and relying on listening skills.

Mattis is currently a senior counselor at the Cohen Group, a Washington, D.C. consulting firm founded and headed by former U.S. Senator William Cohen, who preceded Mattis as defense secretary by 20 years.  Mattis was defense secretary from January 2017 to January 2019.

In his presentation, Mattis returned frequently to the theme of handing the world off to the next generation in the same or better condition than current leaders inherited it.  He noted that often means working closely with people with whom you disagree, people who may be inexperienced, ill-spirited, or just wrong. 

It also means admitting when predicted outcomes turn out differently. He said that people of opposing viewpoints need to work together to address issues, which usually starts with relatively small tasks where there is broad consensus on how to improve—he mentioned education and infrastructure–and then working up to bigger and more divisive issues. 

Mattis encouraged the audience to hold close people whose behavior offends, because, he said, “I’ve never seen it help when we cut people off in terms of them becoming more ethical in their performance.”

Invited by the moderator, CPR President & CEO Allen Waxman, to offer advice to a Zoom room of conflict resolution professionals predominated by lawyers, Mattis urged restraint from over-specific rules, which can lead to “brittle” situations and illogical outcomes.  He mentioned the importance of building trust before a crisis. 

Mattis recounted stories of watching great leaders build trust by listening to their counterparts, learning from them, and helping them.  He recounted General George Washington’s work with an untrained volunteer army that went on to defeat the world’s best army, and would go on to defeat Napoleon’s army just a few years later. 

General Mattis said Washington’s secret was “very boring”—

He would listen, and he would listen with a willingness to be persuaded.  He would actually change his views.  He listened to these guys from Delaware who went out on the water everyday and they kept in their own boat and now they’re in the army.  And the guy from South Carolina who couldn’t even understand those funny-talking people from Boston . . .

He’s learning from them, as he’s listening he’s willing to be persuaded.  He listens. He learns.  This is showing respect and when he does this, he helps them.  He helps them with the most . . . simple things at times like getting socks and warm coats and blankets. He does anything he can to help, and only then does he lead.

Citing was he said was the business community’s “more practiced effort” for defining and solving problems, Mattis called on the meeting attendees to apply their problem-solving skills to matters of public importance. Serve on school boards, he said, or the city council.  

“Run for office, if that’s your bent,” suggested Mattis, “but spend time giving back in the governance area—local, state, federal—because we need what business is bringing right now.” 

Answering his own question as to why local action is important, General Mattis concluded, “The country’s worth it.”

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The author is an LLM candidate studying dispute resolution at the Straus Institute, Caruso School of Law at Malibu, Calif.’s Pepperdine University, and an intern with the CPR Institute through Spring 2021. #CPRAM21 continues on Friday, Jan. 29; registration is free at www.cpradr.org.

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