May 20, 2010

SPEAKING VOLUMES: A Review of Bargaining with the Devil: When to Negotiate, When to Fight

Stephen J. Dolmatch

Does it always make sense to negotiate? What if the party across the table has ignored previous agreements with you? Refusing to negotiate may feel good, but would that be in your best interests?

Sometimes your moral or emotional instincts give you prudent advice—it may be fruitless, as well as repugnant, to negotiate an agreement with someone who can't be trusted. But sometimes pragmatic demands conflict with these instincts. In this colorful investigation of a handful of historical and legal disputes, Robert Mnookin seeks to sort out these conflicts. He doesn't believe you should always be willing to bargain with a malevolent adversary, or that you should never be. He aims to help you decide.

The first half of this book recounts several important world events with a keen feel for the psychology of the protagonists and a chess master's focus on the practical analysis behind their moves. Mnookin, who chairs the Harvard Law School Program on Negotiation, offers a rich trove of detail, such as the declassified minutes of Winston Churchill's war cabinet meetings deliberating whether to negotiate with Hitler and Nelson Mandela's account of his decision in prison to open secret negotiations with the apartheid government of South Africa. The author moves from "global devils" in modern history to "business devils" in a major software battle and an intractable labor conflict and "family devils," a bitter divorce and inheritance dispute. The centerpiece of these engrossing stories is the interplay of emotional forces with the costs and benefits of different approaches—including the cost of not negotiating. From these extreme conflicts, the author extracts a set of guidelines.

Mnookin defines a "devil" as someone who has intentionally done you harm or aims to do so in the future or, alternatively, as someone you don't trust. Most negotiating adversaries are not devils, as Mnookin would recognize. Trust is not usually a binary matter of whether you do or do not trust the other side, but a matter of degree: how much you trust them and as to what. Bargaining with the devil is thus not a fitting metaphor for what business lawyers usually do. Business lawyers mostly negotiate with adversaries who, like themselves, are focused on achieving the best results for their clients and are doing so honestly, albeit with a certain amount of bluffing. Most situations involve parties that want to have a business relationship, that care about their reputations, and that expect to do business again in the future. As a result, negotiation is mostly a matter of understanding what is important to your client and what is important to the other side and figuring out a way to achieve a "win-win." This view of negotiation—as a problem-solving process aimed at reconciling the interests of both sides—is exemplified by Roger Fisher and William Ury's 1981 best-selling book Getting to Yes. While each party may be primarily focused on satisfying its own interests, it is perfectly happy, maybe even happier, if the other side can satisfy its interests, too.

However, each side is also looking to do as well as it can, and sometimes negotiations fit the cooperative model very poorly. Your adversary might even be intent on thwarting your interests in addition to satisfying its own. Or it may have knowingly breached an important duty causing your side serious harm. In that situation, is negotiation misguided? Sometimes compromise would only lead to more aggression down the road. But at other times compromise can bring about a better outcome for your side than fighting would. Mnookin uses the example of a medical device company faced with a joint venture partner who has secretly developed a knock-off product in violation of their license agreement. After reviewing various options, the company finds that litigation, or even refusing to do any future business with that party, may not be its best choice.

So should you bargain with the devil? Mnookin's answer in a nutshell is, "Not always, but more often than you feel like it." His advice: First, avoid emotional traps that can lead you to make knee-jerk decisions, such as demonizing the other side or viewing the world in zero-sum terms in which what one side wins the other must lose. Second, inventory your various choices and thoroughly analyze their costs and benefits. Third, recognize the moral issues that may arise if you agree to negotiate with this adversary. As for these moral issues, Mnookin acknowledges that it can be upsetting or even abhorrent to negotiate with an adversary who has wronged you. But, in the end, he is a pragmatist and measures the moral cost of allowing a devil to claim undeserved benefits in pragmatic terms. He favors the approach that best serves your side's interests—much as a business lawyer's clients would likely do.

Mnookin devotes more ink to fleshing out abundant details and background color than he does to guidelines or checklists for negotiators. Bargaining with the Devil is a pleasurable meandering walk that could be shortened considerably without sacrificing much of its direct negotiating advice. For a more concentrated dose of coaching, lawyers and businesspeople might choose Getting to Yes; or for something targeted at lawyers, consider Mnookin's earlier book, Beyond Winning. For a savvy treatment of dealmaking by a prominent M&A lawyer, readers might opt for James Freund's Smart Negotiating. Mnookin's book, however, offers something that the others do not—an absorbing, in-depth look at a few very challenging conflicts that stimulates the negotiator in you and leaves you with insights that could easily give you a critical edge the next time you face off with an intractable adversary.

Bargaining with the Devil should be an enjoyable read for anyone, but lawyers who negotiate for a living will particularly enjoy it. Mnookin lucidly describes the psychology of the process and the ever-changing chess game of identifying your side's true interests, discerning those of your adversaries, and figuring out how to get what your side wants. The fun of this book is that it takes these factors and plays them out in extreme situations where the potential for a meeting of the minds seems remote.                         

Stephen J. Dolmatch

Dolmatch is a corporate lawyer in New York City. He can be contacted at stephen.dolmatch@gmail.com.