Tips for Successful Negotiations
Described by one training organisation as the “skill that transcends all others”, negotiation, once mastered can help you achieve improved results in many different business and social situations. For lawyers and their clients in a dispute situation effective negotiation skills and techniques can be invaluable in reaching a settlement whilst also keeping legal costs under control.
In this month’s ezine we offer some Do and Don’t tips for anyone involved in a negotiation. Follow this approach and your next negotiation could be a pleasurable experience, resulting in success.
What you must do for a successful negotiation
This may sound obvious but on a number of occasions I have conducted mediations as either a mediator or a solicitor and come across parties who have not really understood what is involved.
By considering the following points you can make sure you are prepared for an effective negotiation:
Goals: what do you want to get out of the negotiation? What do you think the other person wants?
Negotiating points: What do you and the other person have that you can trade? What do you each have that the other wants? What are you comfortable giving away?
Options: if you don’t reach agreement with the other person, what alternatives do you have? Are these good or bad? How much does it matter if you do not reach agreement? And what alternatives might the other person have?
Relationships: what is the history of the relationship? Will there be any hidden issues that may influence the negotiation? How will you handle these? The consequences: what are the consequences for you of winning or losing this negotiation? What are the consequences for the other person?
Power: who has what power in the relationship? Who stands to lose the most if agreement isn’t reached?
Possible solutions: based on all of the considerations, what possible compromises might there be?
Bring the right people: only those who have confidence in the process or inadequate knowledge of the dispute are useful. Anyone else could harm your chances of getting the deal done.
Keep reviewing the strength of your case: Whilst you are at the mediation or negotiation, keep assessing the strength of your case and seeing how the interaction is going.
Assess your strengths and weaknesses in the case. Your position in the negotiation will be advanced if you have an understanding of your "Best Alternative to a Negotiated Settlement."(BATNA) This represents what you will do if an agreement is not reached in a negotiation. Consider consequences of a failed mediation or negotiation. No matter how good a mediator is or how effective a negotiator you are, there is always the risk of a failed mediation. If you have considered your bottom line with thought, you can walk away without regrets.
Identify your legal and other costs
Before entering into any negotiation you need to gather the facts – but one crucial fact that is often neglected is the level of legal and other costs incurred. This is essential in helping to put a value on the case and bring a sense of perspective to the situation. In mediation the mediator will almost always get the parties to think about the level of legal costs incurred on the case, as a way of assisting a party in valuing a case. When putting a value on the case it’s important to consider the intangible consequences, such as loss of business opportunities that inevitably accompany the process of conducting litigation.
If you can, make first offers
There has been a fair amount of discussion on this but in my experience a party who makes a strong but realistic first offer is in a better position than one who does not. An aggressive first offer can work in your favour as one of the most effective ways to getting the most from your opponent. The main advantage is that it allows you to offer concessions and still reach an agreement that’s much better than your alternative agreement.
Do a risk assessment
Case analysis or what can be termed risk analysis is very important in a negotiation as it provides a framework within which one can negotiate a case. Without good case analysis, the negotiator does not have a compass and he or she will be ineffective. This is where legal skills can come to the fore and having a lawyer present is very useful.
Have the right attitude to the negotiation
The way that you interact with the other side will impact how they interact with you. Remember the greatest impediment to settlement is the view that the case will not settle. Instead try to think of well-thought out proposals which can reach agreement.
What to avoid when negotiating
Don't treat a negotiation like a Court case
One of the biggest criticisms that I can level at lawyers during mediation and in fact in any negotiation is they often focus just on the law and they neglect the other dynamics of the situation. Whilst the law is important a point not to neglect is that you are attempting to reach a deal with another party not convince a 3rd party (namely a judge) of the merits of your case. In a negotiation you need to bring in empathy with the other party, consider reasonableness and bear in mind that you are looking for a win, win solution, not a win, lose one.
Don't be aggressive
The nature of the English legal system encourages one to be adversarial. Whilst it’s important to be firm in one's position, do not be so aggressive that you upset the other side so much that you jeopardize the chances of a deal being reached. All too often the reason a negotiation fails is that the parties are far too macho, they want to be right or score points, which all serves to wind the other side up and reduce the likelihood of an agreement being reached.
For professional help with your next big negotiation call Justin Patten, negotiator and professional mediator.
What’s Your Negotiation Style?
For a bit of fun you can always find out whether in negotiations you are a donkey, a sheep, a fox or an owl in this online test from Edinburgh Business School.