IMPORTANCE OF NEGOTIATION FOR LAWYERS
Author: Ms. Chhaya Lalwani, Law College Dhanbad.
Negotiation is a method by which people settle differences. It is a process by which compromise or agreement is reached while avoiding argument and dispute. In any disagreement, individuals understandably aim to achieve the best possible outcome for their position (or perhaps an organization they represent). However, the principles of fairness, seeking mutual benefit and maintaining a relationship are the keys to a successful outcome. Negotiation is part of life: We do it all day, every day. Negotiation is an art, and it is part of most lawyers’ work. Along with skills like writing, drafting documents, setting out logical arguments and so on, capability at negotiation is one of the tools most lawyers need to have in their toolkit. The negotiation takes place in a wider process of assessment of facts and law and the provision of advice. Part of the skill of negotiation is to understand that context and deal with it appropriately.
Fundamental Elements of the Negotiation Process
“Negotiations commonly follow a four-step path: preparation, information exchange, explicit bargaining, and commitment. … Negotiation is, in short, a kind of universal dance with four stages or steps. And it works best when both parties are experienced dancers.”
Process of negotiation is divided into the following phases:
Phase I: Pre-bargaining Phase. Information: Learn as much as you can about the problem. What information do you need from the other side?
2. Leverage Evaluation: Evaluate your leverage and the other party’s leverage at the outset. This is important because there may be a number of things you can do to improve your leverage or diminish the leverage of the other side. What will you do to enhance your leverage?
3. Analysis: What are the issues?
4. Rapport:4 Establish rapport with your opponents. You need to determine early on if your opponents are going to be cooperative; if not, consider employing a mediator as soon as practical.
5. Goals and expectations: Goals are one thing; expectations are something else.
6. Type of negotiation: What type of negotiation do you expect? Will this be highly competitive, cooperative, or something.
Rapport: 4 Establish rapport with your opponent(s). You need to determine early on if your opponents are going to be cooperative; if not, consider employing a mediator as soon as practical.
5. Goals and expectations: Goals are one thing; expectations are something else.
6. Type of negotiation: What type of negotiation do you expect? Will this be highly competitive, cooperative, or something unusual? Will you be negotiating face to face, by fax, through a mediator, or in some other manner?
7. Budget: Every negotiation has its costs. Lawyers will avoid conflicts with their clients by discussing budgets sooner rather than later. Many times there are a number of choices for enhancing leverage. For example, you may enhance your leverage by taking several depositions, by adding parties to a lawsuit, by serving subpoenas on witnesses, or by hiring experts. Unless your client has unlimited resources, you will have to make some hard choices, which should be designed to give you the “most bang for your buck”.
8. Plan: What’s your negotiation plan?
Phase II: Bargaining Phase
1. Logistics: When, where, and how will you negotiate? This can be especially important in multi-party cases.
2. Opening offers: What is the best offer you can justify? Should you make it, or wait to let another party go first?
3. Subsequent offers: How should you adjust your negotiating plan when responding to unanticipated moves by your opponent?
4. Tactics: What sort of tactics will you employ? What sort of tactics is your opponent using on you?
5. Concessions: What concessions will you make? How will you make them?
6. Resolution: What is the best way to resolve the problem? Is there an elegant solution? Be on the constant lookout for compromise and creative solutions.
Phase III: Closure Phase
1. Logistics: How and when will you close? At mediation or later on? Who will prepare the final agreement?
2. Documentation: Prepare a closing checklist.
3. Emotional closure: It’s one thing to end a legal dispute; it’s another to address the underlying interests and needs of the parties. If you neglect the latter, the agreement will probably not sustain.
4. Implementation: It’s not over until it is over.
IMPORTANCE OF NEGOTIATION FOR LAWYERS
In the world where we are negotiating every day, this course highlights the key principles and strategies that you can use when you negotiate in a professional capacity to ensure you achieve a successful outcome. Negotiation Skills for Lawyers will prepare you to approach each negotiation you do with confidence by teaching you how to prepare thoroughly using and applying key strategies. There are two different types of negotiation theories, different types of negotiations and the characteristics and styles of negotiators.
1. Know about the two different negotiation theories;
2. Understand what your personality style is in relation to the negotiation styles;
3. Create strategies for a negotiation which will help you create options;
4. Deal with nerves and fears in a controlled manner; and
5. Know how to deal with difficult questions.
Much of what lawyers do work on behalf of their clients to reach agreements. Examples of agreements may be contracts for transactions or to resolutions of disputes. During litigation, lawyers may reach settlement agreements at any time. All of these interactions require negotiations: at the very least between lawyers and often also between lawyers and their clients. The more advanced a lawyer’s negotiation skills, the more effective she or he will be in reaching effective resolutions for her or his clients.
Hermits aside everyone needs negotiation skills. It’s part of being human. For lawyers is usually a critical part of their job. It starts with negotiating the terms on which they represent potential clients and this is subject to renegotiation. Most disputes are settled by negotiation and don’t get to trial. During a trial, there is normally a fair amount of negotiation with opposing counsel and frequently the judge.
FIVE GOLDEN RULES OF NEGOTIATION FOR LAWYERS
1. Information is Power — So Get It!
Self-described “expert” lawyer-negotiators often enter negotiations with arguments intended to persuade the other side of the legitimacy of their positions. Unknowingly, they’re giving up power from the first time they open their mouths. Negotiation power goes to those who listen and learn. It’s thus critical to ask questions and get as much relevant information as you can throughout the negotiation process. With the information in your pocket, you have power. Without it, you ’ll be scrambling.
Effective lawyer-negotiators know this well. Instead of trying to convince the other side of the strength of their case or why the other side should agree to the merger, they start by getting information. How? By building rapport, developing relationships, asking questions (especially open-ended ones like what, how and why), finding out their counterparts’ negotiation reputations, and probing their and the other sides’ fundamental goals, needs, interests, and options.
2. Maximize Your Leverage
How much does your client want or need that deal or settlement, and how much does your client’s counterpart need it? What are your and their client’s alternatives if an agreement is not reached? What can you and your client do to strengthen your leverage? What might your counterparts be doing? Finding the answers to these leverage questions can be the key to success. Ignoring them can be a recipe for failure.
Maximizing leverage can be especially challenging for litigators. Why? They must, in effect, simultaneously send two seemingly inconsistent signals.
On the one hand, they should convey to opposing counsel that they are ready, willing and able to take the case all the way through trial. After all, most litigators’ best alternative to settling the case — a critical element of leverage — is trying it. And the higher the likelihood of their winning at trial, the stronger their negotiation leverage.
Yet over 95 percent of litigation matters settle. So litigators must also signal an interest in settling. But the more they signal an interest in settling (and thus not trying their case), the weaker their leverage.
So how can litigators credibly send both signals? Pursue each on parallel tracks in the following way. On the litigation track, always push forward to trial in an appropriately aggressive fashion.
On the settlement track, get the other side to initiate the process (thus signaling their relatively strong interest in settling), or suggest that it’s your policy in all your cases to discuss settlement at that stage of the matter (signaling that you do it then in your strong and weak cases, and avoid sending the “We’re interested in settling because we have a weak case” message).
3. Employ “Fair” Objective Criteria
The quest for fairness and the perception of fairness are key elements in many legal negotiations. Fairness, in most instances, boils down to a matter of relatively objective standards, like market value, precedent, efficiency or expert opinion. If both sides can agree on a fair and reasonable standard, many negotiations will be successful. If not, it ’s far more difficult to reach an agreement.
For transactional lawyers, standards can play an especially crucial role. Why? Because many transactions involve parties with future relationships, and standards can provide an independent and objective view of the issues. This can depersonalize the negotiation and help preserve their relationships.
“hering in inflation and the unique elements of your client’s business.” Or “it’s standard in the industry for the losing party to pay attorneys’ fees if a future dispute goes to arbitration.”
Focus on standards. While applicable also for litigators (critical standards include jury verdict research, expert opinions, and precedent), it can be an especially powerful move in many transactional contexts. And it will give you credibility and help keep that “fair and reasonable” hat on your head – a critical factor in many legal negotiations.
4. Design an Offer-Concession Strategy
No one wants to leave valuable items on the table gratuitously. The best way to avoid this is to design the right offer-concession strategy. Doing this will require you to understand the psychological dynamics underlying concession behavior, as well as improve your ability to evaluate your counterpart’s “flinch” point. It’s not an exact science, but you can learn to draw out and recognize certain signals that will give you the edge in your negotiations.
A crucial offer-concession element in the legal arena involves making sure your counterpart walks away feeling like they achieved a good deal.
5. Control the Agenda
Effectively managing the negotiation process — overtly or covertly — is one of the most challenging elements in striking the perfect deal or settlement, even for the most expert negotiators. Understanding when to use deadlines, how to effectively operate within them, and the psychological tendencies underlying them will give you a leg up in your negotiations.
Controlling the agenda can make or break your negotiation.
To practice law is to be a professional negotiator. This is consistent regardless of the practice area. If you plan on having a successful and healthy legal career, you will have to hone and constantly improve your negotiation skills. Effective negotiation will help you resolve situations with minimal disruption. At the end of every negotiation, everyone wants to walk away feeling like they “won.” For lawyers, negotiation is unavoidable. It is not only part of who we are, but an essential part of careers. Thus it makes complete sense to do our best to master and constantly improve already advanced negotiation skills.