Negotiation styles and approaches can impact the outcome of a negotiation. As a corporate lawyer, it is important to be aware of different styles in order to prepare for a successful negotiation.
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Preparing for a Successful Negotiation: The Lawyer’s Perspective
One aspect of preparing for a successful negotiation outcome involves adopting the mindset of the opposing party. A savvy lawyer will take the time to understand the opposite party’s perspective. They will also list out the company’s deal priorities for the negotiation. An astute lawyer will think about which deal points the company could compromise on and which deal points the company simply cannot concede.
Knowing the Parties Involved
When you are leading the negotiation, it is helpful to develop a strategy about the order in which you address different deal points. Opening with a couple of substantive points that you are willing to compromise on can set a positive tone. Giving the other side what it wants in certain respects can give you leverage leading into more difficult deal points. People tend to reciprocate niceties. Another strategy that can give you leverage is the feeding ego of the other side.
It is also important to read social queues. Maintain an awareness of when it is appropriate to talk and when to sit back and listen. One helpful tip to keep in mind is that you cannot lose a deal point if you remain silent. Showing a willingness to listen can give the other party the impression that you are seriously considering their position. Even if their position is unreasonable, listening to their thoughts allows them to feel a sense of closure.
Game Theory and the Prisoner’s Dilemma
Before diving into negotiating styles, drawing parallels to game theory may offer some useful perspectives. Game theory, or the study of mathematical models of strategic interactions among rationale players that maximize gains and minimize losses. The most famous game is the prisoner’s dilemma. This game demonstrates how two people might not cooperate with one another even if it is clearly in their best interests. Keeping in mind these invisible rules can provide useful perspective before entering into a negotiation.
A wide range of behaviors can surface in the negotiation context. Some negotiators adopt the characteristics of a bully. They are willing to forgo professionalism for yelling and threatening the other side. A strategy for dealing with a bully negotiator is to mellow them out. An effective lawyer will respond to threatening, erratic behavior with a chilled-out tone.
On the opposite end of the spectrum, some people adopt an overly pleasant personality during negotiations. This “nice guy” negotiator can be hard to pin down for clear, definitive answers. Sometimes a lawyer may need to add a bit of bully into the mix to avoid getting frustrated by the seeming lack of progress in the negotiation.
People on the other side that get caught up in technical detail can similarly frustrate negotiations. These individuals tend to excessively scrutinize every detail. This can cause the focus on the negotiations to be diverted from the core deal points. An effective corporate lawyer will avoid having their attention diverted and their energy drained by insignificant technicalities.
Getting to Yes
At the end of the day, “getting to yes” involves a host of factors. Most effective lawyers remain calm and collected throughout the negotiation process in order to achieve an optimal outcome. A collaborative approach over spewing threats generally increases the likelihood of success.
In considering whether to walk away from a negotiation, a skilled lawyer will think about their BATNA, or best alternative to a negotiated agreement. The strength and range of the backup options available of course highly dependent on the company’s circumstances. Regardless of the company’s negotiating leverage in a particular situation, the company’s legal counsel should avoid being pushed outside their willingness zone. This is where understanding BATNA comes into play.
Being an Effective Deals Lawyer and Adopting an Entrepreneurial Perspective
An effective in-house lawyer will possess the right balance of technical expertise with a smooth negotiation style. A great lawyer can firmly negotiate deal points on the company’s behalf while maintaining a calm demeanor in the face of difficult circumstances.
Great in-house lawyers are also able to adopt the entrepreneur’s perspective. They do their homework about the deal and strategize to position the company for future business growth. This requires maintaining an open mindset that takes into account the unique business, financing, and legal needs of the company.