Preparing to Negotiate: Going Beyond the Case File to Achieve Success

In this article I am providing the second installment of my review of William Ury’s book, Getting Past No: Negotiating in Difficult Situations.  In my previous article I put the cart before the horse and talked about the five steps to a successful negotiation — here I am going to talk about the horse that pulls the cart: negotiation preparation.

We all operate under severe time constraints, but you can’t afford not to prepare.  So, you have studied the case file and know all your facts and legal arguments.  You feel very smug and are ready to go, right?  Wrong!  Knowing your legal case only equips you to begin negotiation preparation.  It’s like standing at the plate in a baseball game with a brand new bat in your hands.  If you don’t know how to hit, your baseball career is going to be very short.  A minimum of fifteen minutes of preparation time is critical, and a better rule of thumb is to engage in one minute of preparation for every minute of anticipated negotiation time.

Ury states that you must map out the way to an agreement by focusing on five important points: 1) interests; 2) options to satisfy those interests; 3) fair standards for resolving differences; 4) alternatives to negotiation; and 5) proposals for agreement.

1. Interests: Positions are the concrete things you say you want — dollars, terms, conditions, etc.  Interests are the intangible motivations underlying your position — needs, desires, fears, and aspirations. You must identify the interests underlying the positions of you and your opponent.  If you don’t know where you want to go, it’s unlikely that you are going to get there.

Rank and prioritize your interests so that you don’t accidentally give up something very important for something of lesser importance.  Moreover, unless you understand the perspective of the other party, you will have difficulty making a satisfactory deal: you must be able to put yourself into their shoes.  You can’t change their thinking if you don’t understand what it is!  The more you know about them, the better chance you have to successfully influence their behavior.

2. Options: Effective negotiators invent creative options to “expand the pie” and satisfy the “interests” of all parties, even when its not possible to obtain everyone’s “positions.”  Never focus on a single solution (often your original position) — brainstorm and invent options without judgment first, and then evaluate them in light of the interests of all the parties.

3. Standards: Once the pie is expanded it needs to be divided up.  Impasse is often created when the process turns into a contest of wills and egos tied to intractable positions.  Come to the negotiating table armed to persuade with fair standards to use as a measuring stick for a mutually satisfying solution that operates independent of the will of either side — examples include market rates, legal criteria, scientific criteria, technical measures, and generally accepted standards and precedents.  Do your homework!

4. Alternatives: The purpose of negotiation is not necessarily to reach an agreement, but to determine whether you can satisfy your interests better through agreement than by pursuing your Best Alternative To a Negotiated Agreement (“BATNA”).  Your BATNA is the key to your negotiating power: the better your alternative to negotiation, the more leverage you have in the process.  Put simply, a BATNA is your best course of action to satisfy your needs without the other side’s agreement.

You need to identify your BATNA, develop and boost it if possible, and use it as a tool to measure any proposal, determine whether to continue negotiations, or whether  to negotiate at all.  Note, however, it is easy to overestimate your BATNA due to your vested interest and personal bias.  Proceed with caution, and, as discussed above, look at the situation as objectively as you can and from the perspective of your opponent.

It is also critical to determine the BATNA of your opponent.  This knowledge will help to guide you through negotiations since you will have a sense of whether any proposals on the table are superior to your opponent’s BATNA.  Having this information allows you to pierce the facade of hard bargaining and posturing.

5.  Proposals: Once you have used this process to identify viable options, you are ready to develop a spectrum of proposals — possible agreements to which you are willing to commit.  Ury suggests developing at least three: one that you aspire to have, one that you would be content to have, and one that you could live with.

The proposal to which you aspire should be realistically high, i.e., the proposal should be within the bounds of fairness and just within your perception of your opponent’s BATNA so that there is at least a chance that they may agree to it.  The proposal with which you would be content should meet your basic interests.  Your third proposal — the one you can live with — should be directly tied to your BATNA: identify an agreement that would barely satisfy your needs only marginally better than your BATNA.  If you can’t obtain an agreement at least as good as your third proposal, you may want to seriously consider walking away from the negotiation table.

These are not rigid positions, but illustrative of the kinds of outcomes that could satisfy your needs.  There is no way to know for sure what he other side will do, and during the course of negotiations you may acquire different information that enables you to develop different options and related proposals.

It is helpful to prepare a worksheet identifying the interests of you and your opponent, the options and standards you have developed, the BATNA of both you and your opponent, and the three categories of proposals you have crafted.  Rehearse the negotiation with a colleague playing the role of your opponent, and elicit feedback regarding what worked and what did not work, and what you might want to try to do differently.  This will help you to anticipate the tactics the other side may try to use and prevent you from being surprised.

Prepare, prepare, prepare…  There is no way to shortcut the process.  But the potential dividends in terms of improving the potential outcome for you and your client are well worth the effort.

I’m Dave Doto, and this is my Opening Statement. – November 23, 2011

Happy Thanksgiving!

The Five Steps to Successful Negotiation

            Would you like to take simple steps to vastly improve your negotiation outcomes?  In his best-selling book, Getting Past No: Negotiating in Difficult Situations, distinguished negotiation expert William Ury identifies “Five Steps to Breakthrough Negotiation.”

            Of course, as Ury points out, before you can effectively use these five simple steps in a negotiation, you must engage in extensive planning.  But I’m impatient, I love to read the ending of a book first, and, true to form, I am “putting the cart before the horse” in this article.  Truth be told, however, I would lose interest faster than Pavlov’s dogs salivated at the sight of a biscuit if I were to read an article on negotiation planning without first having a concrete understanding of what one is planning for and why.  I would like to reduce the chances that any of my columns end up draped over your nose while you sleep!

             In my next article, I will talk about negotiation planning.  I hope that you will gain a framework to comprehend and apply such planning after reading this article.  So, without further ado, here are the five steps to “breakthrough negotiation”:

             1.         Go the Balcony (Your reaction):  The first step to a successful negotiation outcome is to control your own emotions – Ury calls it “going to the balcony” and viewing the negotiation from above.  In other words, don’t react to the other party by getting angry, seeking retribution, or by counter-attacking.  Instead, focus on your own goals and interests, and reflect upon your best alternative to a negotiated agreement (or “BATNA”) as a framework within which to determine whether and perhaps how to continue the negotiation.

             2.         Step to Their Side (Their emotion):   Create a positive atmosphere by defusing strong emotion from  the other party such as anger and hostility.  Don’t attack or resist, but listen to them and agree wherever you can — acknowledge their competence.

             3.         Reframe (Their Position): Change the game.  In response to hard ball tactics, turn what the say into problem solving questions — “why is it that you want that”?  Let the underlying problems rise to the surface and guide them.  Don’t try to meet their attack head on — use verbal jujitsu to deflect their momentum into interest-based problem solving.

             4.         Build a Golden Bridge (Their Dissatisfaction): Do not push the other party to negotiate, draw them in.  Make it easy for them to say yes by identifying and incorporating their needs and interests into your proposals wherever possible, and help them to save face such that the outcome appears to be a victory for them.

             5.         Use Power to Educate (Their Power): Don’t escalate conflict if a party continues to resist negotiating in a cooperative manner.  Educate them about the cost of no agreement: exercise restraint and ask reality testing questions, warn without threatening, demonstrate your BATNA, and reassure them that your goal is a mutual “win-win” agreement, and not victory.

             I would encourage anyone that wants further information, analysis, and/or examples regarding any or all of these negotiation steps to pick up a paperback copy of Getting Past No.  It is a $17.00 dollar investment that will prove invaluable to you time and again.

I’m Dave Doto, and this is my Opening Statement. -November 23, 2011

Getting the Most Out of Mediation: Part II

In Part I of this article, I discussed part of a chapter in Dwight Golann’s book, “Mediating Legal Disputes,” in which Golann addresses the importance of an advocate’s use of a mediator to “manage and structure the flow of information” and “influence the bargaining process.”  Part II of this article will outline Golann’s thoughts regarding the tactics an advocate can use to help the mediator break impasse, and concurrently attain a favorable settlement “closure” to the bargaining process.

1. Bargain with the mediator about impasse-breaking techniques that will be most effective in increasing your client’s share of the settlement pie.

A mediator has a long list of methods to help parties get past impasse ranging from less intrusive methods of getting positional bargaining re-started (e.g., “what if” or hypothetical bargaining) to intrusive methods such as a mediator’s proposal for settlement.  As an advocate,  you have the ability to ask the mediator to avoid specific tactics, or to influence the mediator about the specific tactics that are proposed or used. For example if the mediator wants to use hypothetical bargaining (“what if I could get the other side to go to $150,000″), you can suggest a favorable number or probe the mediator about how likely it is that the other side will agree to move.  If the mediator employs range bargaining, you can bargain with him or her about the endpoints to be used with the underlying knowledge that settlement is likely to occur near the midpoint of the range (“if they will drop to $400,000, we will go up to $200,000, but not if they stay at $500,000″).

Take control and actively intervene in mediator proposals for settlement if you decide that it is in your client’s best interest to entertain one.  Take the initiative to negotiate with the mediator and define what your client is willing to do in order to settle (“if you make a proposal in the range of $200,000, I will recommend it to my client”).  If you know that your mediator will continue negotiating even if his or her proposal is rejected, you may want to consider allowing the mediator to make a proposal that you intend to reject, and then counter with a new offer so as to force the other side to make a mental adjustment toward your position.

Listing the extensive array of tactics you can employ as an advocate in mediation is beyond the scope of this article.  In general, however, always consider what option is likely to achieve the best results for your client at any given point in the process, and press the mediator to use it.  Moreover, always consider how your actions, and reactions to any technique, will affect bargaining later in the process.

2. Use the mediator to educate an unrealistic opponent or client.

 Ask the mediator to give an evaluation if you think your opponent or your client is not being realistic.  This helps to manage your client’s expectations and at the same time preserve your client’s confidence in your loyalty and zealousness, particularly when “bad news” about your client’s case needs to be delivered.  Experienced mediators will allow you to use them as a scapegoat so that you can avoid client criticism (“once the mediator estimated damages at $250,000, it was impossible to get the defense to go any higher”).

Your request for a mediator’s evaluation needs to be tempered with some caution.  Ensure that impasse is being caused by a disagreement about legal merits or some related obstacle an evaluation can address.  If there is some other impediment to resolution such as an emotional or psychological issue, an evaluation will not help.  If you are not confident that an evaluation will be helpful, ask to speak with the mediator privately about it before it is given.

It may be helpful to avoid a “global” evaluation of the entire case, and instead focus on a specific issue that could re-start negotiations.  Carefully consider what issue or issues you want evaluated.  Focus on what issue is causing impasse, and avoid having an evaluation performed regarding an issue that you may have raised for reasons other than its legal merit (such as an argument you proffered to humor your client).

Finally, tell the mediator what you want.  Identify the emphasis and level of specificity you think your client needs – greater or lesser detail, more or less explanation, or an evaluation that is diplomatic or more direct and hard hitting.  To get the best evaluation possible, direct and guide the mediator to key evidence, highlight important language in documents, and where possible, have him or her meet or talk to key witnesses.

3. Continue to use the mediator’s power even if mediation initially fails.

If your case does not settle during the initial mediation session but you believe that your client will benefit from an additional session, prod the mediator to follow up and try to re-start the negotiation process.  Even if settlement is not possible, consider using the mediator to work out an efficient way to proceed with litigation.  You may wish to consider using the mediator as an arbitrator to render a binding or non-binding decision, to help the parties agree on a process to select a different arbitrator from a panel of neutrals, or to help the parties agree on another method by which to adjudicate the dispute in an expeditious manner.  Or perhaps the mediator can help the parties to negotiate a discovery plan or some other procedural element of the litigation.  The list of possibilities is as long as your imagination and creativity.

As noted in Part I of this article, by pro-actively engaging the mediator, you can harness the mediator’s power to achieve a better negotiated resolution for your client!

I’m Dave Doto, and this is my Opening Statement. – August 31, 2011