From The Lawyer’s Guide to Negotiation, 2nd edition, chapter 1
- Find out what could constrain your freedom as a negotiator.
- Learn the four essential questions of negotiation.
Law practice is negotiation. Whether you are attempting to conclude an acquisition agreement, trying to settle a personal injury claim, or conferring with a client about pending legal matters, you are negotiating. In the final analysis, all of a lawyer’s legal training and professional expertise is directed toward one objective—solving the client’s problems. Negotiation is the primary tool for doing just that. Consequently, lawyers who cannot effectively negotiate cannot effectively practice law.
While every lawyer will undoubtedly agree that negotiation is an important skill, few view it as the single most important factor to the overall success of their practice. Be assured that it is. Negotiation is by far the most frequently used device to resolve conflicts and claims. Negotiation is the only process available to form and give order to business relationships. It is the process that combines legal training and experience with interpersonal skills to achieve tangible results. We like to think of negotiation as being the action side of a law practice.
To illustrate this point, consider the following:
- More than 95 percent of all civil claims are concluded by negotiation, not litigation.
- Of those claims that actually go to trial, only a fraction go to verdict, and of those that do, a substantial portion are settled by negotiation pending appeal.
- Every conceivable type of business relationship is created by negotiation.
- The overwhelming majority of inmates currently serving time in United States penal institutions are there because of a negotiated plea bargain.
Making the Most of Your Natural Advantage as a Lawyer
Lawyers enjoy a decided advantage when it comes to negotiation. While the reasons for this are both real and imagined, the fact remains that lawyers have a head start over the layperson in the give and take of negotiation.
A primary reason for this advantage is public perception. The average layperson views lawyers as being naturally superior negotiators. This is true even in matters having little or nothing to do with legal issues. After all, giant corporations such as Microsoft, Viacom, and Toyota turn to legal counsel when putting together multimillion- dollar deals. Professional quarterbacks, rock stars, and network television personalities usually rely on their lawyers rather than themselves when negotiating big-money contracts. Even the United States government finds it necessary to retain high-powered Wall Street lawyers to help diplomats deal with complex foreign-policy trade negotiations such as the North American Free Trade Agreement, General Agreement on Tariffs and Trade, and Trade-Related Aspects of Intellectual Property Rights. It just stands to reason that lawyers “must” be superior negotiators.
In reality, this perception of superiority based on the mere fact of law school graduation and bar passage is not always accurate. Lawyers have no more of an inherent claim on proficient negotiation skills than anyone else. The plain fact is that negotiation is a learned skill. It was not until the 1990s that American law schools finally began to emphasize negotiation and other essential lawyering skills within the context of their curricula.
Prompted by the findings and recommendations of the MacCrate Commission, law schools began to elevate practical skills such as negotiation, interviewing, and client counseling to a level previously enjoyed by traditional substantive offerings such as contracts, torts, property, and civil procedure. The popular view in legal education prior to the skills movement was that negotiation was something lawyers could pick up in practice. And, while that view makes very little sense today, many members of the bar had no alternative but to learn from trial and error.
Given the new emphasis on bargaining skills and problem solving, together with the fact that lawyers are simply exposed to more negotiation situations than nonlawyers, the public perception that members of the bar are superior negotiators is, for the most part, well-founded. But that does not mean that there is not room for improvement.
The New Paradigm of Law Practice: Problem Solving
Most lawyers are generally adequate negotiators and will win their share of negotiations. But experience teaches that lawyers are not satisfied with just being adequate or merely winning their share.
Combine this basic truism with the new realities of practicing law in the digital age, and it becomes readily apparent that developing negotiation proficiency can no longer be left to chance. This is illustrated by the monumental changes brought about by the emergence of the so-called “new economics.” Within the past five to ten years, as the world economy has changed in response to the information and communications revolution, the legal profession has become much more diversified and grown increasingly complex. The new model for the modern lawyer is that of a cooperative problem solver working in a team environment. The modern lawyer is retained today as much for his ability to overcome problems, break through stalemates, and provide an overall framework for economic growth as for his knowledge of fine points of law. The line between legal advice and business advice has blurred. The lawyer is increasingly viewed as an indispensable player in the modern economy who not only helps clients navigate the legal system, but also plays a key role in making things happen through an understanding of people, their work environments, and problems and challenges.
This new paradigm makes the ability to build bridges through effective negotiation more important than it has ever been within the context of a legal practice. This book is written specifically for lawyers making that adjustment. It seeks to dispel some long-held myths while offering lawyers a consistent approach that will provide the necessary framework for any bargaining challenge within the context of an evolving style of practicing law on a much broader landscape.
Universal Principles and Concepts of Negotiation
The first discovery all young lawyers have to make is that negotiation is not as mysterious or elusive as most would have them believe. The lawyers who negotiate multimillion-dollar, international business agreements do not do it with mirrors or sleight of hand. Rather, they employ basic, time-tested principles and concepts of leverage, timing, knowledge, preparation, and determination to achieve the end result. Instead of searching for magic solutions, these lawyers simply rely on the recurrent patterns and principles of negotiation that have existed ever since two prehistoric cavemen exchanged fire to be used for light and warmth as a quid pro quo for a smooth, heavy rock that could be used for protection.
These basic principles are still at work today in law and business offices and courtrooms around the world without regard to the disarming simplicity of the issue or the cutting edge complexity of the problem or the dollar amount involved.
The Negotiating Lesson from Iran
One of the most dramatic negotiations the world has ever witnessed involved the release of the 53 American hostages from captivity in Iran. On January 20, 1981, after 444 days, the hostages were finally released by virtue of a negotiated settlement directed by President Carter’s White House. It is no coincidence that the American captives were being sped to the Tehran Airport at the precise moment the presidential oath was being administered to Ronald Reagan, half a world away.
Why? The Iranians were greatly influenced by the power of deadlines. They knew that once the transfer of power to the Reagan administration was completed, the negotiating environment would change radically. The new administration promised to take a harder line with Iran. The result: an agreement after 15 months of deadlock. This deadline factor combined with the uncertainty of a new administration—plus the fact that Iran had already gained maximum publicity value from the hostages and desperately needed money to conduct its war with Iraq—resulted in the agreement that delivered the hostages’ freedom.
This well-known example stresses the point that there are, indeed, negotiation principles and concepts that can begin working for you immediately. The key is learning to recognize these concepts and understanding how and why they work. The modern negotiator knows that a calculated and planned approach to bargaining based on these principles will always prevail over reliance on a bag of random tricks. Understanding these controlling concepts will allow you to address any problem that circumstances may dictate, to remain unruffled when the tactic that has always worked before fails, or when the other side remains indifferent after you play what you thought was your trump card. This is the difference between an adequate negotiator and an accomplished negotiator in a modern practice setting.
There Are No Rules
While there are basic principles, concepts, strategies, tactics, and techniques that give form to the negotiation process, there are no rules by which the game is played—except the rules you make, or the ones you allow your bargaining counterpart to make.
To illustrate, consider the following: A resident of Illinois comes to you claiming he has sustained damages in the amount of $100,000 resulting from the alleged negligence of the defendant, a resident of California. Based on this claim, you advise the plaintiff to file suit in federal district court based on diversity of citizenship. As plaintiff’s attorney, you can rely on the Federal Rules of Civil Procedure to provide a framework for the procedural development of your action. Likewise, you know that the rules of evidence will govern admissibility of proof at trial. All of these rules are uniform and binding on both parties. They provide some assurance that the defendant will file a timely responsive pleading and that each side will have an adequate opportunity to seek relevant facts through discovery. They also help minimize surprise, delay, or admission of prejudiced statements based on hearsay or undue influence. The primary drawbacks to using the judicial system to resolve this conflict are the expense and length of time involved. This point takes on added significance where the parties have weaknesses or proof problems with their case, or where the amount of money involved would make it uneconomical to proceed to trial.
An alternative to litigation for both parties is to seek a negotiated settlement that could be quicker and less expensive. Assuming this course of action is adopted, the parties, especially the plaintiff, will quickly begin to realize there are no uniform rules of negotiation to ensure fairness, guard against delay, and otherwise guide the negotiation in a predictable, logical manner. The only rules are the ones the parties elect to adopt.
For example, if you, as the plaintiff’s lawyer, write a demand letter to the defendant, there is nothing that requires the defendant to comply with your demand. In fact, the defendant need not respond to the letter. If he does choose to respond, there is no time limit within which he must do so. Assuming the defendant does elect to respond, he controls both the substance and form of that response.
The point to remember is that you as a negotiator are in a position to create, accept, and reject the rules by which a given negotiation will be conducted. Lawyers who recognize and make the most of this fundamental negotiation principle will enjoy a decided advantage over those who allow their opponents to make the rules.
Constraints That Limit a Negotiator’s Freedom of Action
While there are no rules governing a negotiation, there are certain constraints that limit a negotiator’s freedom of action. Some apply across the board to all negotiators, while others are only applicable to lawyers.
Lawyers and nonlawyers alike are limited by sanctions against illegal conduct, such as fraud, coercion, and conspiracy. While these provisions by no means ensure honesty and fair dealing, they do set a minimal standard of conduct below which most negotiators are unwilling to venture.
In addition to legal sanctions, the American Bar Association’s Model Rules of Professional Conduct, along with any specific state and local rules bearing on attorney ethics, provide a check on a lawyer’s conduct in a negotiation.
A practical constraint on a lawyer’s negotiating style is her own professional reputation. While a lawyer is entitled and even required to pursue a client’s interests zealously within the bounds of legal and ethics codes, lawyers must take care not to sacrifice their reputations and credibility by engaging in conduct detrimental not only to the client but to the lawyer as well. Winning at all costs may have the effect of reducing or destroying a lawyer’s long-term credibility. Representation of a client’s interests must be balanced by a sense of propriety and reputation with the practicing bar.
A lawyer’s approach to a negotiation will also be constrained by her ability to achieve workable solutions to a client’s long-term as well as short-term problems. For example, assume a lawyer is in a position to negotiate a totally one-sided contract in a client’s favor by virtue of superior leverage and the lawyer’s understanding of the negotiation process. The client will obviously be pleased in the short run. However, if the contract proves to be so burdensome to the other side as to be unworkable, the other party may find breach preferable to performance. Should this be the case, the client who was initially satisfied with the negotiated contract will be deprived of his primary objective—a workable agreement.
Clients are seldom pleased to find out that they have to litigate what they thought they had already secured through negotiation. Even if the client should win in court, he is still a loser in terms of lost time and expense. The lesson is to negotiate the most advantageous contract possible for your client that the other side can accept with. To go any further becomes potentially self-defeating.
Constraints Are Rarely Uniform
In addition to recognizing the constraints to a negotiation, lawyers should be aware that these constraints will rarely be applied uniformly. For example, while all lawyers are bound by applicable ethics codes, there is a wide divergence of acceptable ethical conduct within the Model Rules.
Technically, opposing lawyers may be in compliance, while the realities and consequences of their behavior are in marked contrast. It is crucial to understand these types of disparities so as not to fall victim to an adversary who may be playing the same game by a different set of rules. Probably the worst miscalculation one can make is to assume that everyone sees the world from your perspective, ethically and otherwise. To borrow President Ronald Reagan’s memorable quote to then Soviet General Secretary Mikhail Gorbachev at the 1986 summit in Reykjavik, Iceland, “Trust but verify.”
The Client Understands Only the Bottom Line
All lawyers know that the client is the ultimate judge of their efforts. The client may not understand or fully appreciate the intricacies of the law or your ability to grasp and deal with complex legal problems. The client does, however, understand one thing—results! The negotiation process is the primary vehicle to achieving bottom- line results.
The purpose of this book is to help you improve your negotiation skills to the point where you win more than just “your share.” An understanding of the recurring patterns and principles of negotiation, coupled with an awareness of how and when to use this knowledge, will pay immediate dividends to you and your clients in terms of bottom-line results. Ultimately, that is what practicing law is really all about.
Looking Back to See Forward
Most lawyers are destined to have an abundance of negotiating experiences during their careers. Whether you are a young lawyer just beginning your legal practice, the experienced veteran of 40 years, or the many lawyers whose careers fall somewhere in between, you all have one thing in common—the need to negotiate effectively. Because negotiation is such a frequently used skill, lawyers tend to become fairly proficient at it. Whether it’s litigation, mediation, cooperation, or simply communication, all of these forms of persuasion can be used as part of the negotiating process. Since negotiation has been practiced from the very beginning of human interaction, it is often valuable to look to the past to catch a glimpse of how to skillfully use the negotiation process in the future.
The Great War and Rubius Gallos
During the Great War of the Jews against the Romans in 70 A.D., the last resistance of the Jews was the rock fortress of Masada in the Judaean desert. This formidable and seemingly impregnable structure sat on a mountaintop some 1,424 feet above the Dead Sea. The rock of this ancient mountain fortress rose 820 feet on the east side and over 600 feet on the west.
Originally, this superstructure had been built in 36 B.C. as a safe haven for Herod the Great and his family. After Herod’s death, a Roman garrison held the fortress until the Jewish Revolt. Eventually, the Jews overran the Roman garrison and held Masasda throughout the Great War. As Rome began the process of recapturing its lost territory, Masada was the last stronghold to stand after Jerusalem fell to the Romans.
Growing impatient and beginning to feel political pressure from the Senate, Emperor Vespasian ordered the Tenth Legion under the command of Flavius Silva to crush the Jewish resistance at Masada. With 5,000 soldiers and over 9,000 slaves and prisoners of war, Silva stationed his troops along the slopes of Masada and lay siege to the fortress. The Romans constructed a ramp of packed earth and stones and erected a siege tower. Under cover of fire from its top, they moved the tower with its battering ram up the ramp.
Once the siege tower was in place, the Romans began pounding the wall of the fortress. Eventually, it became obvious the mighty wall would crumble and the Romans would overrun the 900 occupants of Masada. On the eve of the day it appeared inevitable to both sides that Masada would fall to the Romans, the Jews made a decision that would deny the Romans a total victory. The next day, as the wall was finally breached and Roman soldiers stormed into the city, they found that all the occupants of Masada had taken their lives.
The mastermind of the plan to retake Masada was an old Roman siege master, Rubius Gallos. Silva had personally recalled Gallos from Rome to develop and implement a plan to capture Masada. During one of Gallos’s many inspections of the ramp prior to the final assault, he was gravely wounded by a Jewish archer. Although Gallos was immediately rushed to the surgeons, they were unable to save him. As he lay on his deathbed, he gave Silva and his staff his final instructions on how to complete the attack. He detailed the angle that the battering ram should be positioned, the time of day of the attack, and the particular units to lead the assault. Just as Gallos was completing his instructions, he died. However, he was able to relay enough information to Silva and his staff for them to complete construction of the ramp and siege tower and execute his assault plan.
The predicament of Rubius Gallos brings into focus a fundamental question: What is really important in a negotiation? What must you know and apply every time you negotiate? Stated differently, if you were in Rubius Gallos’s situation, what essential negotiation wisdom would you pass on to those intently listening to your every word? Assuming time was quickly slipping away, could you do it in 20 seconds or less?
Everything You Need to Know About Negotiation in 20 Seconds
Everything you need to know to conduct a successful negotiation is contained in the answers to four questions:
- With whom am I dealing?
- What do I want?
- How will I go about getting what I want?
- What are the unique circumstances?
The answers to these four questions will obviously vary from one negotiation to the next. However, the answers always lead to the information needed to be successful at the bargaining table. The answer to the question “With whom am I dealing?” identifies the personality type of the individual across the table, which in turn reveals negotiating style and patterns, always helpful information in any negotiation.
Every astute negotiator knows the answer to the question “What do I want?” before entering the negotiation arena. How a negotiation unfolds strategically has to do with the answer to the “How will I go about getting what I want?” question. And every prepared negotiator looks at the specific circumstances in which the negotiation is taking place.
The first step in any negotiation plan should always begin by posing the four Rubius Gallos questions. Clearly define your responses to these crucial questions before time runs out.