Practice Management

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Ten Best Practices That Will Improve Any Negotiation
The author, Helen Leah Conroy, is a licensing and commercial transaction lawyer practicing in Oakland.
E-mail: helen@helenconroylaw.com
Website: www.helenconroylaw.com

No matter what the subject matter of the deal at hand is, following these ten simple rules will improve the outcome of your negotiations.

1.) Prepare before—and during—your negotiations. Research using the Internet, and through discrete inquiries to trusted contacts, gather as much information as you can about the other contracting party’s possible objectives and negotiating style. Identify and write down (for internal use only) all of your "needs" and "wants." Before having any discussions with your counterpart, determine what outcomes you must obtain to do the deal (your "needs"). Identify as many other benefits from the deal that, while not absolutely necessary, you would like to get (your "wants"). Also make a written list of points that are simply out of the question ("deal breakers"). Keep that list on hand throughout the negotiation process. Update as appropriate.

2.) Plan your concession pattern in advance. Know not only what you can "push across the table" in the give-and-take of every deal, but also when, and in what order, you can or want to "give." Maintain flexibility, but evaluate all requests in light of your "needs/wants" list.

3.) Look for non-monetary value. Timing of terms, favorable publicity clauses, rights of renewal at existing terms, revenue recognition concessions (in the software context), and similar non-monetary terms can add tremendous value to a deal without requiring additional cash. Listen, ask, and listen some more, to discover clues for value that neither party had considered at the outset.

4.) Be careful what you say—and what you ask. In negotiations, information is everything. Each side has negative leverage points—weaknesses or objectives that could drive the value of the deal down if known by the other side. The questions you ask during the negotiation could reveal your own negative leverage factors.

5.) Negotiate in person whenever possible. How the parties make their points and react to one another—the tone of voice, demeanor and body language—provide as much, if not more, valuable information than what they say. Try to include at least one face-to-face meeting during the process.

6.) Agree on action items and summarize points agreed to before concluding every negotiating session. Go through agreed-to points during the conversation. Designate a scribe and then go through those points again, one by one and the end of the meeting or call. Do the same thing for follow-up, e.g., action items (with deadlines) for each person who agreed to do something before the next session. Follow that with a hard copy summary, where appropriate, after the meeting.

7.) Use "party-neutral" language when discussing deal points. Instead of saying "we would like" or "can you give us," frame your points in the third person. Whenever possible, demonstrate how the change you seek would benefit both sides. The less you say "we want" or "we need" during the negotiations, the less it will seem like your counterpart is "giving."

8.) Control the tempo of the back-and-forth. Take as much time as you need, unless you know for certain that a quick pace works to your advantage. (If you need to close the deal in a hurry, remember that that usually operates as a negative leverage factor—so don’t let the other side know, unless you absolutely must.) Think about, consider, and prepare in advance your reaction to important points raised in the negotiation. Even for fairly simple deals, you can usually get the other side to let you "sleep on it."

9.) Respond unemotionally if the negotiations heat up. Point out—using the third person—how the aggressive, rude or hostile behavior of your counterparts does nothing to advance the process. Suggest other ways to get the negotiations back on track. Avoid the (sometimes great) temptation take it personally, losing sight that what matters is the process and the objective results of that process.

10.) Don’t negotiate directly from deal documents. Many people like to negotiate deals by going page by page through documents they have used before. Don’t. First, the documents used in earlier transactions reflect the final deal, after the parties had completed their bargaining. You can only do worse if you start your negotiations from the place you ended the last one. Second, the documents don’t reflect the best order for negotiating the business points of the deal—and may prevent you from finding new "hidden value" in a deal. Also, be aware that depending on how tracked changes are accepted and shown in a document, there may be hidden information about prior deals. Always start with a "clean" document.

Although few, if any deals, ever perfectly balance the interests of both sides, all parties to a deal should view it as fair. By remaining true to your objectives, by listening carefully throughout the process, and by clearly stating the parties expectations—including objective criteria for measuring performance—you almost certainly will get the best deal you can.

 

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