I was recently involved with a lawsuit that made it pretty obvious why they usually end up in a settlement. Before the suit was filed, the attorneys made a best guess as to what would be a fair settlement, and a best guess as to what they could expect to get given their experience. They expected to win the suit--the only question was how much it would be considered to be worth. The initial response from the suit was a settlement offer for about what the attorneys thought they might get, which was a surprise. Obviously the party being sued expected to lose as well, and their estimates of what they might lose were evidently higher than ours. After a couple of back and forth offers, they made an offer that was about twice what our attorneys initially expected to get. Feeling that if we did not accept it we might go to trial, and not wanting to entrust things to the unpredictablity of a jury, we settled.
The jury is the wild card in the deck. You can never predict when some looney tune with great persuasive skills is going to take an otherwise reasonable group of your peers down a ridiculous path. If you have an offer you can live with, you will eventually prefer that to the roll of the jury trial dice.