Reading a Negotiation: Who Wants to Do the Deal and Who Wants to Argue?

October 15th, 2009

My normal strategy in a negotiation is to be frank about my client’s needs and try to find a collaborative solution for both sides.  Here is an example of when that worked really well, another one where it didn’t and what I could have done to improve the outcome.

Negotiation as Collaboration
In one recent transaction my client and its business partner had reached agreement on about 90% of the issues in the deal.  The last few were somewhat sticky because they were less about business terms than allocation of risk.  I explained our situation to the other side, then listened carefully to the other side’s points.  When we started going through the draft agreement I realized that the first two points were much more important to them, while some later ones were bigger points for us.  After hearing them out we agreed we could concede the first two items. The mood on the call immediately improved, the other side agreed to concede the items we explained were important to us and we breezed through the rest of the call.

Negotiation as My Way or the Highway
This strategy worked so well that I tried it again in another deal and it blew up.  The difference was that the attorney in the second deal had no interest in collaborating- she simply wanted to “win” every point.  That call was so adversarial, in fact, that everyone started shouting and stopped listening.  My client ended up getting everything it needed, but only by going around the attorney after the call and convincing the business principal that his attorney was standing in the way of the deal.

How I Avoid Making the Same Mistake Twice
The lesson I took away from negotiation #2 is to read the tone of the discussion as quickly as possible.  The people on the first call started out wary, then quickly warmed up through a candid discussion of the issues.  The attorney on the second call was belligerent from the outset and had no interest in talking through the business points.

Fundamentally I believe in my approach- I know my clients’ products cold, have business reasons to justify almost every point and a strong sense of which purely legal items we can give up in order to do the deal.  In my second deal, I should have avoided letting emotion take over, stuck to the business points and gotten off the call as quickly as possible so that both sides could work through the facts without having the attorneys showing off for their clients. The call might still have been unsuccessful but we could have avoided polarizing everyone.

My clients and I work as a team.  My job is not to win every point in a negotiation but to put the business terms into language both sides can benefit from.  I love this job because even though I have spent 11 years practicing my approach I still learn new things every time.

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