Do I need an account to use Backchannel?

Answer: Yes. Accounts are free. You only pay a fee when you create a Backchannel session.

Does my counterparty need an account?

Answer: Yes. When you create a new matter in Backchannel, you will be able to invite your counterparty. Your counterparty will then be able to quickly and easily create an account and join the matter.

How much does it cost to use Backchannel?

Answer: Backchannel costs $249 per session per party ($498 total). Each session lasts up to 30 days.

What are each of the steps in Backchannel’s process?

Answer: Backchannel uses three steps to help the parties make a deal. Step 1 has the parties address the non-monetary terms of a deal. This step can be skipped. Step 2 allows the parties to make a secret offer or demand. After 48 hours, Backchannel will check for a deal. If there is no deal, Step 3 allows the parties to change their numbers. Backchannel will check for a match each time a party changes its number. Step 3 will last up to 28 days.

What happens if there is an exact match between the offer and demand?

Answer: It depends on which Step of the Backchannel process the parties are in. If you are in Step 2, then both parties will receive a notification at the conclusion of Step 2 that a match is made and at what number the match was made. If you are in Step 3, then the parties will receive a notification immediately that a match is made. The final number, however, will be impacted by Step 3’s incentive system. That system will give a 5% bonus to the side that input the number triggering a match first.

What happens if the offer and demand overlap? (For example, if one party offers to pay $10,000 and the other party demands to receive $5,000.)

Answer: If there is an overlap, then Backchannel will select a random number within the overlap range. After following neutral rounding rules (based on the size of the number), the number will become the matched number, in the same way as though both parties offered and demanded that amount. Based on whether the overlap occurred in Step 2 or 3, the number will be subject to the same timing and incentive rules as any other matched offer and demand.

Why are overlaps handled with random numbers rather than a “meet-in-the-middle” number?

Answer: Backchannel uses a random number (with rounding) to further mask each party’s actual bottom or top lines. If a “meet-in-the-middle” number was used, parties could tell exactly where the other party stood and possibly take advantage of this information. With a random number, parties will only be able to tell that a match was made at the final number.

What happens if there is no match in Step 2?

Answer: Backchannel will move onto Step 3, where both parties can change their offers and demands for a period of up to 28 days.

What happens if there is no match in Step 3?

Answer: Step 3 lasts up to 28 days. If no match is made during that time, the Backchannel session ends. To start again, the parties will need to start a fresh Backchannel session.

How does the Step 3 Incentive System work?

Answer: As part of the agreement between the parties to use Backchannel, the parties agree to use Backchannel’s incentive system, which we call the Olive Branch Bonus. Should a match be made during Step 3, the parties agree that the number will be increased or decreased by 5% in favor of the party who reached the matching number first.

For example, let’s say that a plaintiff demands $10,000 in Step 2. Meanwhile, the defendant offers $5,000. There is no match at the conclusion of Step 2, so Backchannel moves on to Step 3. The defendant decides not to move his offer number. After some consideration, the plaintiff moves his demand to $5,000. This triggers a match. Because the defendant was the first party to the matching number, the defendant receives the benefit of the 5% incentive. This means that the defendant agrees to pay $4,750, and the plaintiff agrees to accept $4,750.