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Strategies and Ethics
The current interest in studies of negotiation and systematisation of negotiation behaviours arise partly out of the realisation that "knowledge is power". And where there is access to power, there is abuse of power.
Accordingly, there is considerable complementary interest in most professions in ethical standards and discipline in reaction to negotiating behaviours such as:6
* lying and exaggeration
* bluffs and threats
While ethical standards will continue to be debated, some professional negotiators (including lawyers) and researchers have attempted to systematise a range of strategies to use in anticipation or response to:7
* lying an exaggeration
* bluffs and threats
* add ons
* obscurantist behaviour about facts or precedents
Other important strategic questions include:
* Who should "open" the negotiations?
* What style of negotiation is appropriate to the transaction or conflict?
* When should negotiation styles be changed?
* When and how should litigation be run parallel to negotiations?
* When should negotiation be (temporarily) terminated?
The four basic rules of thumb for legal negotiators developed by the Centre for Dispute Resolution at Pepperdine University are:
(1) Begin reasonably
(2) Retaliate whenever the other party is unreasonable
(3) Communicate clearly and constantly
(4) Forgive, but never forget
Having taken a helicopter overview of some basic issues in negotiation, this paper now turns to a more specific topic.
The Last Gap
What is the last gap in a negotiation? It is the last step necessary to reach an agreement between the negotiating parties. Often that last gap or last increment emerges after long and exhausting negotiations which have led to agreement on all issues but one. For example, that one issue may be - Who gets the grandfather clock? How should the last 10% of the pool of assets be divided? How should the outstanding credit card debt be paid? How to cross the difference of $ 600 or $ 1 million in the parties' "final" offers?
Most lawyers and business people can relate horror stories with humour and/or anguish about clients becoming stuck on the last issue of a lengthy negotiation. Some lawyers can tell how they themselves have offered to write a cheque to cover the last gap in order to help the disputants end the drawn out negotiations and almost invariably the disputants refuse the offer "as a matter of principle".
The Importance of the Last Gap
Why does the last increment or last issue assume such importance and so often anecdotally provide a stumbling block to a negotiated settlement? There are a number of possible explanations:
* The Last Dance - final loss of the conflict or the relationship.
* Unfinished Emotional Business.
* The last straw - "I have given up so much already".
* Sense of having been Tricked.
* Skilled helpers attempt to prove "worth".
* Recriminations for Lost Time and Money.
* Latent request for a symbolic apology.
The Last Dance
Negotiations have often been compared to a dance, where one or both parties circle one another apparently reluctant to end the process.8 Particularly in family, succession and employment disputes, a settlement represents the final loss of the relationship and is therefore often avoided.
The avoider may need to be challenged privately by a trusted adviser about his/her apparent need to avoid that final loss of the relationship. Some patience and new strategies are needed as the avoider weaves and ducks around the resolution of the last issue with a series of "oh but...." statements.
The most clinging form of the last dance has been described by Isolina Ricci as "negative intimacy"9. This occurs where one or both parties are finding meaning to life by being a martyr, or by being in constant conflict. A settlement represents loss of meaning.
Thus the last gap will never be crossed but will be preserved. Even if the other party concedes the last gap, the "negatively intimate" negotiator will create a new last gap - known as an "add on"10
For example, just as agreement is apparently reached:
- "There's something else I want to raise......"
- "There's one more thing that has to be done - I want an apology".
- "Of course, before I sign anything I want all the photograph albums delivered to me".
Unfinished Emotional Business
The last gap may represent a cry by one or both parties that there are some unfinished emotional issues between the disputants. Commercial reality or common sense "does not prevail for good reasons". We cannot allow this dispute to be nominally "finished" when one major issue has not even been discussed, let alone resolved - namely my sense of anger, devastation, guilt or powerlessness. I will hang on to these negotiations and to your presence in this room until my feelings are acknowledged, expressed or healed, or diminished to a tolerable level of pain".
Thus once again, jamming on the last gap may have nothing to do with the substance of the last gap. Rather it may be a cry for help.
If this is a correctly hypothesised diagnosis in a particular case it represents a challenge to skilled helpers (lawyers, counsellors or mediators) to develop a number of strategies to respond to the cry. These strategies need to extend beyond the ubiquitous platitude "perhaps you need to work through this with the help of a counsellor".
The last straw - "I have given up so much already".
The dominant method of negotiation in Western cultures appears to be positional bargaining. Each party makes an extreme claim and by gradual increments moves towards a resolution point somewhere between those extremes. Repeat players such as corporations are experienced in playing this game.
However, one-off or less experienced disputants tend to go through disappointment and anger as they see their original claim whittled away by one concession after another. This is particularly so where they believe that their original offer was reasonable, or at least not unrealistic.
At the end of several rounds of mutual concessions, both ( now angry) disputants may have a strong sense that each has conceded so much already - so much has already been "lost" - without losing yet again on the last issue. Accordingly, each disappointed disputant digs in and insists that the other concede on the last issue. "I want you to give something today as I have already gone way past my bottom line. Be reasonable!" - each disputant echoes to the other.
Some disputants may feel intensely that this last impasse is the last straw - they have been steamrolled all day and are finally putting up a stop sign to preserve some sense of integrity. A dramatic walkout may also be staged or threatened.
The walkout relieves the pressure of the negotiation room, avoids the last concession, demonstrates to all how intensive the pain is, and may inflict some pain on the other side for his/her "unreasonableness".
Professional helpers should be able to anticipate the walkout and normally have a variety of strategies ready to prevent or delay its occurrence. This is because a walkout enables each side to characterise the other as "unreasonable" - one for unreasonably "causing" the termination of the meeting, the other for immaturely exiting. Each party is stereotyped and a new cause for a relationship conflict is founded 11 . Additionally, after a walkout it is difficult to muster enthusiasm, cash and timetables for another face-to-face meeting.
Sense of having been Tricked
Some negotiators sense that they have been tricked when the negotiations reach the last gap, and someone predictably suggests "split the difference". This is because they believe that their first offer was "reasonable", whereas the other parties' first offer was wildly exaggerated. The standard process of incremental concessions has left the range of offers biased towards the "exaggerated" opening offer.
The person who perceives that they opened reasonably will often be fuming for being "punished" for his/her reasonable behaviour. This pattern of behaviour of course encourages some experienced negotiators to avoid opening with reasonable offers.
Even more experienced negotiations/mediators will tend to discuss how negotiations should open - firm reasonable or soft extreme - before the process commences12 .
Skilled Helpers attempt to prove "worth".
The last five, ten, twenty or fifty thousand dollar gap is sometimes a sticking point as the lawyers want to "win" that gap to both establish their negotiation skills, and to pay their own fees. A client will face triple disappointment if they "lose" their expected outcome, "lose" the last gap, and then have to pay fees of skilled helpers (such as lawyers and accountants) from their diminished share. Lawyers understand the marketing need to justify their fees, and to support disenchanted clients who will be their main source of publicity for future clients. Therefore some lawyers may feel the need to negotiate long and aggressively on the last gap.
Recriminations for Lost Time and Money
Reaching the last gap sometimes brings home a depressing reality to one or all the negotiating parties. They are about to settle for a deal which was offered and rejected one or two years previously. Now they are about to settle for the same figures with nothing to show for one or two years of tension, absences from work, uncertainty and thousands of dollars of expenditure on legal and other experts' fees. This pattern reflects the negotiation adages that "the right offer at the wrong time is the wrong offer"; the negotiation dance takes time and money; disputes settle when they are ready to settle - not before.
However this loss of time and money will result in some angry statements particularly by negotiators who are not repeat players:
* "We could have settled for these arrangements two years ago if you had only been less greedy"
* (To the lawyer) "I've spent another x thousand dollars on you - and what do I have to show for it? Nothing!"
* "I was willing to settle for that amount one year ago - but now you'll have to pay all my legal expenses"
* "Two years of pain and expense - for what? - only to make the lawyers richer".
* (To the lawyer) "I wish you had pushed me to agree two years ago when these similar figures were on the table".
* (To the lawyer) "Your initial advice two years ago suggested that I'd get much more than this paltry offer. And now you seem to be pushing me to accept".
This is a familiar litany of recrimination for lost opportunity against self, the other party, and the expert advisers. It can make navigating the last gap a tense passage of blame and defence both within and across negotiating teams.
Some lawyers attempt to deflect or anticipate client blame for their behaviour by producing old written letters of advice to settle; by negotiating aggressively to win the last gap; by blaming the old misdiagnoses on unknown and subsequently emerging facts; by reducing legal fees in the light of the "disappointing outcome"; or by recommending an umpire's decision so that the umpire, and not the lawyers can be blamed for the outcome.
Latent Request for a Symbolic Apology
In family disputes, the return of a particular "minor" chattel sometimes becomes a cause celebre not because the item in itself is important to either person. Rather it represents one form of "unfinished emotional business". This is a sense of hurt from a past particular or series of events which is sought to be remedied by an apology. As a verbal apology is seen as unlikely, one party demands a symbolic apology by insisting upon the return to him/her of a bicycle, painting, hallstand, necklace or set of books. The possessor of the item will usually be reluctant to effect the transfer so long as this might be interpreted as an apology - as (s)he is convinced that apologies should be coming the other way on the "correct" interpretation of history and righteousness.
Can the Last Gap be Avoided?
Are there any strategies whereby the last gap can be avoided in negotiations - or is it inevitable? This is certainly a worthwhile topic for empirical research. How often is there a clear impasse over the last gap? What are the variable factors which can be measured when the last gap is absent?
It may be that almost every negotiation necessarily involves a measure of distributive and positional bargaining, and therefore a measure of pain and pause.
Nevertheless, a number of preventative strategies may help both parties to prepare for the last gap so that it creates less of an impasse.
Education - Talk and Diagrams
A skilled helper (lawyer, counsellor, negotiator, mediator) can educate a client concerning predictable patterns of negotiation and impasse by:
* giving out literature or videos on negotiation
* repetitively giving educational lecturettes
* drawing negotiation diagrams
* listing the fifteen ways to cross the last gap so that the client can consider these in advance13 .
This education process may cognitively help the one shot client to:
* reduce the sense of panic or anger when the last gap is reached
* feel some control over the stressful and mysterious negotiation process.
However, the obvious should be stated-intellectual assent by a client to a series of "educational" verbal propositions from the mouth of a skilled helper may be a totally ineffective learning experience. The humbling adage is that family law clients only hear every fifth word spoken by their lawyers.
"Keep something in reserve"
Some lawyers appear to coach clients to "keep something in reserve" in preparation for the prophesied road block at the last gap. On standard negotiation principles, the "something" should be of high value to the offeree, but of lower value to the offeror. Identifying these extras requires a problem solving search for the "interests, needs and goals" of the other side. For example, the offers held in reserve in family disputes might be:
* a promise to keep a parent fully informed of all the child's activities and school reports.
* a promise to use best endeavours to ensure that a child phones regularly.
* an undertaking to pay private school fees or medical and hospital insurance.
* a request to babysit a child during a holiday period.
* an undertaking to publicise and promote a spouse's business, dispute the martial breakdown.
Maximalist opening offer
Some lawyers routinely advise clients to "open high, as it is easy to give up something; but very difficult to take back". This homespun wisdom supposedly prepares the client to make concessions around the last gap, as (s)he knows (at least in theory) that the initial claim has been overstated in value.
This rule of thumb is a two edged sword. It may fulfil its aim, or may in fact cause the very problem of deadlock it is aiming to predict and avoid. For example: First, used against inexperienced negotiators or lawyers, or against a one-off party, it may cause considerable anger for being "unreasonable" or "out of the range". It fulfils the prophecy that he offeror is "unreasonable", "hysterical" or "greedy" and negotiations are terminated.
A predictable pattern of stand-off, bluff, harassment, threat to use an umpire, followed by eventual incremental concessions is resumed.
Secondly, used against an experienced negotiator or client, the maximalist claim is usually readily identified, named and ignored. Thereby the unexperienced offeror lawyer or client may not have the skills to withdraw without loss of face.
In the jargon of negotiators, the unexperienced offeror made the opening offer "high" but not "soft". (S)he failed to attach sufficient understandable code words to the high opening.
Thirdly, used against an experienced lawyer or client, the maximalist claim may result in a maximalist counter-claim. The following months or years of incremental concessions will leave both parties with an even heightened tension over crossing the last gap.
Problem-solving Opening Approach
Another increasingly popular (but far from infallible) preventative strategy, is to open communications in a problems solving style. For example, "My client has the following five goals......."; "My client has the following three concerns......"; "This is our understanding of a chronology of facts"; "We are willing to discuss possible options or solutions but would first like you to set our your client's general or specific concerns and goals"; "Can you provide us with the following information and documents so that we can properly advise our client"; "Please advise what information and documents you require".
These classic problem solving openings are designed to delay stating positions, maximise communication; reduce suspicion; and put as many chips of value on the negotiating table as possible. In the jargon of the industry, it is worthwhile spending time and skill to enlarge the pie so that packaged or linked bargaining can then take place. The last gap is delayed by keeping all issues unresolved by face saving conditional and linked offers at different levels of specificity. "Bill, would you be prepared to move towards Jane's valuation figures if Jane moved towards a lower percentage?" "Jane, what if you received the business immediately, would you be prepared to give Bill some of the chattels he has requested?"
It has been one of the myths of the dispute resolution industry that this helpful problem solving approach will dispense with positional bargaining and the last gap. This is clearly not correct. Even a packaged and linked multi issue offer eventually becomes specific in its numbers and terms, an at that point there will be a last gap. "That proposition sounds interesting, but I'm not prepared to give you all the chattels on your list - I want the painting"; "We are getting closer, but I can never drop my percentage below 55%". The mixed nature of all negotiations between competitive positional and cooperative problem solving is well established.
How to Cross the Last Gap in Negotiations
Apart from anticipating the last gap, what strategies are available to cross this hurdle in negotiations or mediation?
One aspect of a mediator's role is to be an expert in the dynamics of negotiation and to educate the disputants concerning these dynamics. Parties can then have some confidence, even though they may feel in the wilderness, that there are well trodden paths which they have some power to choose between. On some classic model of mediation, this education is not necessarily advice-giving. Rather the mediator or negotiator can give information concerning the range of options which have emerged in the strategies of negotiation. (A mediator or negotiator can give this information before or after the last gap has been reached in the negotiation). What follows is a list of options on how to cross the last gap. Some of these can often be helpfully written on a whiteboard. Each disputant may be advised "You will need to choose one of these methods if you want to reach a settlement tonight. I am going to ask you each in turn which of these methods you (i) would at least consider as a possibility; or (ii) prefer; or (iii) would like to avoid"
This ritual of visualising options in dispassionate words on a whiteboard may assist the disputants:
* to resume a style of joint problem solving.
* to withdraw gracefully from a strongly stated position - "I will never settle unless I get that car".
* to realise that impasse on the last increment is a normal stage in negotiations.
* to realise that there are many solutions and there still is opportunity to negotiate about the most palatable of these.
* assist the parties to avoid a dramatic and premature walkout before all the options have been considered.
6 eg. W Pengilley, "But You Can't Do that Anymore!" - The Effect of Section s52 on Common Negotiating Techniques", (1993) 1 Trade Practices J 113
7 eg. W Fisher and W Ury, Getting to Yes (London: Century, 1981); W Ury,Getting Past No (London: Century, 1991).
8 eg. K. Kressel The Process of Divorce - How Professionals and Couples Negotiate Settlements (New York: Basic Books 1985)
9 I. Ricci Mum's House, Dad's House (New York: Maemillian, 1980)
10 eg. W Ury, Getting Past No (London: Century, 1991) p.23.
11 A relationship conflict is one of the five types of conflict identified by C. Moore The Mediation Process (San Francisco: Jossey Bass 1986). It arises where disputants have entered into repetitive patterns of negative behaviour towards one another including stereotyping each other.
12 See previous on "opening offers"
13 See later in this paper for the 15 ways to cross the last gap.