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The Joy Of Negotiation

Raj Kumar Makkad
Last updated: 30 October 2009
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How to persuade clients to negotiate (and that they might enjoy it!)

In 1906, Jack B. Yeats wrote an article for The Guardian describing the Flat Iron Market in Manchester:

"Here you do not stand sourly while a pale-faced short-tempered shopman whirls your purchase into a dexterously twisted screw of pale brown paper and sends your money trundling in a globe along naked wires. No; here before you make a purchase you can slap and thump a thing, and abuse and sneer at it, and the man behind the stall will slap and thump it too, and praise it; and at last you'll get the price down to near to what he will take and you will give. Then perhaps some old split-the-differ of the market rolls up and makes a bargain between you. Oh, you can enjoy buying in the Flat Iron Market."

This excerpt highlights what many of those who work in dispute resolution already know – negotiation can be a pleasure, providing an extraordinary sense of achievement, gained from having reached a hard-won conclusion, accepted by all concerned.

However, we all also know that this attitude contrasts starkly with the discomfiture of many of us when confronted with many negotiation environments. But why does negotiation sometimes frighten and discomfort us so much, and how, as dispute resolution professionals, can we work with clients to make negotiation a pleasure?
Unrealistic expectations

All too frequently, parties seek legal advice either because they are scared to engage in negotiation at all, or because they believe negotiation "hasn't worked"; unlike Jack, they haven't got what they wanted. The legal route might appeal to an individual as a chance to affirm their own rightness, or it might be the only way of getting the other side to engage with their situation in the first place. Entering the legal system with these sorts of ideas and attitudes results in the individual having unrealistic expectations of what the legal process can offer him or her, and, in some cases, they may hold the belief that, as a result, they no longer have to even consider negotiating.

This leaves legal advisors with multiple challenges in managing client expectations. The most obvious are issues around what a client can expect to achieve through a purely legal route. What are the implications, both legal and personal, of not negotiating? It is unlikely that many clients will initially be aware of the legal and costs implications of being seen to conduct litigation in a "reasonable fashion", let alone the implications in litigation of refusing mediation (a form of assisted negotiation).

Perhaps less obvious is the need to manage expectations in relation to what negotiation actually involves, and helping the individual to understand and appreciate the differences between negotiating on their own and negotiating with the support of a legal advisor.
Damaging assumptions

Clients may well instruct a lawyer with the brief of winning, perhaps explicitly refusing to allow a Flat Iron Market-style trade. The attitude of "You owe me something / I owe you nothing" and the urge to ensure that they get more than the other side (or at least prevent the other side from getting what they want) is often very strong when relationships are already strained.

This "no negotiation" stance often hides a range of assumptions about negotiation: that the trade has to be direct: (you have a product or service I want, I give you money in return); that there will be a winner, and one of us get more of what we want than the other; that I already have all the information I need (it is the other side who don't understand yet); that I am right and you will "see sense" if you are pushed hard enough by me or, if necessary, by someone in authority. In any negotiation, it is possible that some of these elements may be true; the danger is in assuming that one or all of them are definitely the case.

Being aware of these potential assumptions gives legal advisers the opportunity to uncover and address underlying concerns about negotiation, which might have been expressed simply as a demand to "win". Every lawyer knows that the transactional cost of "winning" can be extraordinarily high, and that clients may not realise what they have sacrificed along the way until the end of a legal process.

Lawyers, therefore, need to work all the harder to listen and explore their clients' interests, motives and assumptions; it is only by understanding these factors that they will be able to persuade a client that adequate resolution may be more fulfilling than winning. Lawyers are, after all, uniquely placed to assist their clients in making commercially wise and legally sound decisions and preventing them from falling foul of competitive arousal.

Making it work

So what is it that Jack is enjoying so much in his negotiation experience? A large part of his enjoyment lies in the fact that he has the right expectations of the process, and his expectation and the actual experience are congruent; he is expecting to negotiate, he is expecting to trade money for goods, and that is exactly what happens. There is also congruence in his expectation that he and the stall-holder will need to engage in a process of exchanging information and views, and that they may need to involve a third party (the "split-the-differ") to assist with the negotiation process if there is deadlock or an insurmountable difference of language.

This highlights the importance of lawyers briefing their clients effectively before entering any negotiation environment; just talking through what is going to happen within a process can put people in a position where, through realistic expectations, they are able to access appropriate behaviours at the right moments. Parties involved in legal action may well say that they crave their "day in court"; in fact, what they want is to tell their side of the story and have it heard and understood, not realising that, in court, they will get to do nothing more than confirm their name, address and the veracity of the contents of their witness statement, before their version of events is shredded by the other sides' counsel. Negotiation, and particularly the mediation experience, however, engages lawyer and client in partnership, allowing the client a much greater chance of the wish being heard and understood, and thereby being fulfilled.

There is also a definite sense in Jack's article that pleasure is derived from the transactional process of negotiating itself. The negotiation environment can allow parties to feel that everyone has worked to achieve an outcome. This provides a much higher level of buy-in (hence the much lower level of enforcement procedures following mediation) and satisfaction. Like Jack at the market, they have a sense that they have established and divided the value available in the transaction in a way that is only possible with the investment of time and effort.

It is also easier in an open and well-managed negotiation environment to manage expectations of a whole range of psychological processes in relation to conflict. An example of these processes is the "endowment effect", where the ownership of something leads the owner to attribute a higher value to it than they would if they did not have or had not had a property right to it. Just being aware of the impact of this effect can encourage negotiators to take the slapping and thumping to a different and even more effective level, seeking out objective criteria which both sides might agree to use for the assessment of particular parts of a deal. Building up an assessment of quality and value is crucial to getting to the stage of ascertaining "what he will take and you will give".

Jack's description is an object lesson in the value of the negotiation process: the slapping and thumping involves a trade of opinions about relevant objective criteria, the exploration of options for mutual gain, and an exchange of offers which is likely to go back and forth at least two or three times. The final result should be everyone feeling that they have got something they wanted and that they didn't leave value on the table. In the Flat Iron Market of 1906, as in the negotiations of today, none of this would be possible without preparation, exploration, discussion, debate, and perhaps the intervention of a skilled "split-the-differ" doing so much more than just "splitting-the-difference"!

[This article first appeared in the February 2009 edition of Solutions, the magazine of the Dispute Resolution of the Law Society.]


For more information see: http://www.cedr.com/training/negotiation/

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.


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