The following article was published in Inter Alia, the official magazine of the Nevada State Bar.
QUID PRO QUO
The object of all negotiations is to obtain an advantageous deal, not an advantage over the other party. The classic approaches to negotiation, the conventional wisdom of negotiation, focuses on beating down an adversary. Gaining a total advantage over an adversary precludes reaching an agreement. Which do you prefer? Victory? Or a deal? Each negotiation is different. Successful negotiations share common elements.
THE NEGOTIATION PROCESS
Negotiations are not a quid pro QUID or quo pro QUO. It is QUID pro QUO. THIS for THAT. A fair deal will have some parallels but more reciprocals. You give up this to get that. You are willing to part with this because you want that. You never want to trade this for this.
Everything is negotiable except our integrity. In any negotiation, both sides must have (save) face. The object is to obtain the better of the deal, not the upper hand over the other party.
You can not negotiate if you are not talking. Meet face to face. Have the principals meet face to face relatively early in the process.
Do your homework. Do all of your homework. Know everything there is to know and then learn a little more. Comprehend your side and the other side. Understand the objectives and the emotions, the needs and the desires. Understand the principals and the principles.
What problem are you trying to solve? There are no complex solutions to simple problems.
What are your options? What are the other party's options? How many of his options are to your advantage?
How many deals do you want? The negotiations must integrate all of the elements and disciplines. The lawyers are catalysts, translators, interpreters, or advocates. The lawyers are scriveners. When it is together, all of the parts must be together at the same time. It is a team effort. If multiple disciplines are involved, bring them together at the beginning. Otherwise, if you want one business deal and a separate scientific deal and a different engineering deal and another legal deal, then put all of the business people in one room, all of the scientists in another room (separated further by specific disciplines), all the engineers in a third room, and the lawyers in the bar. You will never achieve agreement even on the boiler plate.
Allow the players the opportunity to play to their audience. Engage in a little story-telling to allow the brains of the parties to catch up with the words. Always break for lunch. Working through meals distracts as people concentrate on their hunger pangs.
Boiler plate, pre-printed forms and standardized text provide good check-lists and starting points for negotiation. Whether cast in stone, or electronic word processing memory, they readily succumb to pen and ink, to scissors, and to electronic keys. But do not let the words on a form exalt form over substance.
You are looking for an increase in value for all parties, for a synergistic result where the total is greater than the sum of the parts. The deal is probably not worthwhile if you are only trading assets of identical value. To trade, you do not need a negotiator.
Never agree to a proposition with which you know that your client can not live. Do not allow yourself to be in breach of the negotiated agreement ab initio.
What does the other party bring to the table that you want or need or can use? What do you bring to the table that the other party needs or wants or can use?
What leverage and power do you have?
Recognize the differences between background, culture, education and size of the parties. Recognize, and work with, the different levels of sophistication. Those differences can be the key to successfully reaching an agreement.
Determine what the other side really wants. Is there a way that you can give him everything that he wants and then a little more?
Identify hidden agendas. Is perpetuation of the process, and the ability to bill a few hours every week, the real objective?
What is the organization and structure? Yours? His? For the resulting enterprise? In a bilateral, continuing relationship, can your side live with what it expects for the other side? Test the strength of your position by assuming that on any day your roles could be reversed.
Does the deal itself provide compensation for all of the parties and agents and representatives that must be compensated? Should it?
Tenacity makes deals.
Don't be afraid to play with all of your cards on the table. Don't be afraid to put the weaknesses of your position on the table. The other party knows them or will learn them on his own eventually.
If negotiating in a representative capacity, avoid advance limits on your authority; negotiate with no authority. Negotiate subject to approval by the principals. But know what will be saleable. And be upfront that you have no specified level of authority. Your principal will be advised of the progress or status of the negotiations. You will make recommendations, counsel and advise. The negotiated result can be presented as a take it or leave it proposition.
You can learn more about the other side's needs and wants, and price, when you are on his turf than you can when he is on your turf. If you have traveled to him, you have already met him more than half-way.
Listen to what he is hearing. Does he understand what you are saying? He may offer you something more valuable than you requested. Be prepared to substitute.
There is no deal until there is a deal. An "agreement" on the first point negotiated is an interim point and subject to revision in light of the give and take on subsequent points. Suppose by overwhelming logic you get more than you want on the first point. It is to your advantage to give some of that first gain away at a later time to get what you want on a later point that is of greater importance.
Sometimes it's better to agree on three or four principles first. Other times its better to start at line one and methodically go through the deal line by line. Expect to go through it in that manner at least three times. Rarely are the most important points either at the beginning or the end of the deal.
If something has been left out or left unclear, even after execution, do not be afraid to propose an amendment or clarification.
You can not negotiate if you can not take the consequences of walking. You can not negotiate if you can not emotionally cut away from the deal.
Negotiate knowing that fairness results when you have a willing buyer and a willing seller.
Avoid predictability. A little craziness never hurts. When all else fails throw a tantrum.
If the best offer you can make me is an insult, go ahead and insult me. I won't take it personally (once the deal is signed).
Be careful when bidding against yourself. The other party may reject, or not accept, your proposal without making a counter offer. This is part of doing your homework -- part of determining how to fulfill the needs of the other party.
Know what you have at risk so that you can instantaneously evaluate an apparently off-the-wall proposal.
When negotiating as part of a team, do not require a single spokesman or a unified position. At times some of the players on your side should advocate the other side's position. It assists everyone in understanding the respective positions. People gain understanding at different rates. New ideas can not be all rehearsed in advance. If there is to be one spokesperson and a unified position, why bother to bring all of those other people to the table?
The deal is the totality. There may be interim milestones, interim understandings. However, nothing is settled until everything is settled. Trade value on later items to recoup value given up on earlier items. The process is a circle or spiral where the starting point is repeatedly revisited.
If this is a good deal in its totality, then it is a good deal. A good deal always constitutes a good precedent. In the next deal, different facts or different individual elements can make for a different totality. Don't let fear of precedent-setting hinder the result.
Litigation is war. Negotiation is peace. In war you kill the enemy. You are vindicated. You vanquish him. Negotiation is marriage. You are looking for that warm and fuzzy feeling. The deal is mutuality.
The purpose of the Anglo-American adversary system is to resolve conflicts and avoid war. It has no place in negotiations, although negotiations are a subset of the adversary system. The part of this system of jurisprudence should be limited to the sequel to unsuccessful negotiations. We sometimes confuse ADVERSARY with ADVOCACY.
A negotiation is not bartering -- nor is it an auction. Auctions and bartering constitute nuances of negotiations that must be considered, but not as the driving force of the negotiation.
Just because the other party wins, you don't lose. His gain is not your loss. Your objective is to get a win-win result.
Compromise should not be part of the lexicon of negotiating. Compromise hurts. Mutuality means finding the best place on the spectrum. Each party will have more than one acceptable point. You are looking for a mutually acceptable match, for the place where the spectrums cross.
If the deal is worth the effort of negotiation, it is worth putting in clear writing so that the world knows to what the parties agreed. A handshake deal is an engraved invitation to trouble. If the handshake does not work, if the next phase results in a disagreement, what has been agreed to? Similarly, avoid an agreement to agree. You can always reach a new agreement in the future.
In negotiations beware of litigators who have trained themselves to go for the jugular. Firmness has a place in negotiation but the deal will not work if the other party has been obliterated.
Don't be afraid to be a little iconoclastic. Robert F. Saint-Aubin
