A very large percentage of the matters lawyers handle result in settlements or other agreements, and far more cases involve negotiation than trial. Therefore, litigators should focus on gaining or improving their negotiation skills with at least as much enthusiasm as they show for programs on sharpening trial skills. This article offers some basic practice pointers about the set up, design and tactics for value-driven negotiation for those who may be new to negotiation, or may not have considered any approach other than traditional adversarial negotiation in the past. Anyone can further strengthen their negotiation skills by recognizing the importance of negotiation planning, appreciating the differences between adversarial and value-driven negotiation, and focusing in particular on set up, design and tactics for negotiation.
Set Up for the Negotiation
Setting up for a negotiation through careful advance planning is probably the most important factor in a successful outcome. Essentially, there are two types of negotiation: adversarial and value-driven. The planning or set up for each type of negotiation differs in important respects, but a strong negotiator prepares for both types of negotiation, and generally seeks to push the negotiation towards the value-driven model. In either type of negotiation, the attorney’s goal is ensure the best outcome for his or her client. In many cases, that outcome is more likely to occur through value-driven negotiation rather than adversarial negotiation.
Most people without any specific training or experience with negotiation styles automatically think of adversarial negotiation when they think about negotiation. This is the classic tug-of-war over an amount to be paid or the division of finite resources. Every gain by one side is a loss by the other, and every issue is perceived within the prism of a battle between two adversaries. In planning for an adversarial negotiation, each attorney faces a range of outcomes between his or her client’s objective and the opposing party’s goal. The negotiation consists of efforts to pull the other side toward the negotiator’s preferred outcome on a gradation of win-loss outcomes. The goal is to use your arguments and leverage to achieve a result as close to your preferred outcome, and as far from your adversary’s, as possible.
To set up a plan for adversarial negotiation, the attorney works with his or her own client to determine the point below which the client believes there is not enough value in a negotiated outcome to justify settlement, and the client’s preferred or best possible outcome. Further, a good attorney will also predict the other side’s positions with respect to their likely bottom line and preferred outcome. By projecting both sides’ goals and negotiating range, the attorney can estimate the likely outcome of the negotiation, and if necessary this can be done on an issue by issue basis.
Value-driven negotiation is different. Value-driven negotiation focuses on each side’s goals, i.e., the value of certain concessions or objectives to each side. In value-driven negotiation, the negotiators seek to identify—and meet to the greatest extent possible—the goals of both sides, their own and their adversary’s. In value-driven negotiation, the negotiators recognize that each item to be negotiated may have different value to each side. Often, value-driven negotiation can produce an outcome that is better for the client (and possibly even better for the other side, as well) than can adversarial negotiation, because value-driven negotiation is fine-tuned to the needs and objectives of each party.
Setting up for value-driven negotiation is different from planning for adversarial negotiation. Value-driven negotiation requires the attorney to identify the possible value of each different consideration in play to her own client, as well as the value of that item in relation to the likely goals of the other side. This may require more fact-gathering and the consideration of factors outside the immediate contours of the parties’ dispute. In this set up phase, the value-driven negotiator looks to determine the needs of each side, as well as their shared interests, and to identify a resolution that meets as many needs of both sides as possible—and, of course, promotes as many mutual interests as possible, too. Thus, instead of predicting the dollar value of a settlement range as would be done in preparing for an adversarial negotiation, in setting up a value-driven negotiation, the attorney will consider where interests are aligned and where they conflict, noting that each side may attach different values to specific elements of the negotiation.
The Negotiation Design
Once the attorney has identified each side’s interests and likely objectives in a value-driven negotiation, the attorneys move to an initial exchange of information between the parties as they angle toward a formal negotiation, which may or may not be an in-person meeting or negotiation session. In the exchange of preliminary information, each side articulates its goals for the negotiation and seeks to better understand their adversary’s position. The goal is to obtain the information necessary to advance a negotiation based on underlying interests and value to each side, and thereby achieve the best outcome for their client. The attorney then begins to design a negotiation plan based on this specific information.
In adversarial negotiation, an attorney needs to predict the other side’s bottom line and bargaining range. He or she also needs to know the likely arguments that will be advanced by the other side and the leverage they will try to exert in order to be effective in the negotiation itself. The more information obtained in advance about the positions likely to be taken by the other side, the better prepared the attorney is to advance countervailing arguments and drive the negotiation towards the client’s preferred outcome. In turn, the attorney needs to make important decisions, within ethical bounds, about what information to provide and what information to keep confidential to best advance her client’s interests.
In value-driven negotiation, however, the negotiator has an even more difficult task. She needs to identify the other side’s interests underlying its positions, which may require the attorney to elicit different and broader information about what is affecting her adversary’s position. To do this effectively, it is important for the attorney to think expansively about the information needed to assess the other party’s underlying interests, and whether the opposing party is being forthcoming in identifying the interests that are at stake. This can be challenging because attorneys are not always used to looking for what may be important underlying interests that could have a significant role in a value-driven negotiation. At the same time, the attorney must determine what information should be provided or withheld with respect to her own client’s interests and objectives relevant to the issues in the negotiation. The discussion will center not simply on the desired outcome, but the reasons why certain outcomes are important to each side and the significance of those outcomes to each party.
The design of value-driven negotiation therefore calls on a different set of skills than adversarial negotiation. In value-driven negotiation, it is important to obtain a deeper understanding of the interests at stake. It is critical therefore to ask open-ended questions and listen to the other side’s responses. As lawyers, we can unintentionally fall into a pattern of asking narrow questions designed to elicit specific information instead of open-ended questions that may draw out new considerations that we hadn’t identified on our own. Those new considerations may open up another possibility for resolution in value-driven negotiation that emphasizes the parties’ mutual interest and/or separate but compatible interests, and minimizes reliance on their separate and conflicting interests.
Finally, the parties reach the actual stage of the negotiation, which may either be an in-person session or a series of telephone or email communications. This is when the parties will make their demands and counteroffers, and when they will accept, or reject and revise aspects of the other side’s proposals.
In adversarial negotiating, the plaintiff traditionally makes the opening offer, although it is common for both sides to try to force the opponent to commit to a number first. In the adversarial approach to negotiation, the focus is exclusively on much your client will be able to obtain and how much it can force the opposing party to concede in tactical negotiating. Each step forward is a step backward for the other side. In most situations, in adversarial negotiating the best tactic is to make an offer that is as advantageous to your own client as possible (without regard to the other side’s interests, but without shutting down negotiations altogether). The tactical response to a demand or counteroffer is to forcefully reassert your client’s position and demands, moving as little as possible from your initial stance. Ultimately, the parties either land on an outcome that is between the bottom lines of both parties, or they do not and the negotiations are unsuccessful.
By contrast, in value-driven negotiation, the negotiation centers on a solution that seeks to advance mutual objectives and minimize differences between the parties. The offer is custom-made to address the interests and needs of the parties, recognizing that various possible resolutions may have different values to each side. Flexibility is critical. In addressing the issues and interests of each side, in a value-driven negotiation often more than one solution that may be acceptable to the client. If you have prepared by determining your client’s key overall objectives as well as the other side’s interests and concerns, you can explore different ways that your client’s interests will be protected with minimal intrusion on your adversary’s interests. A value-driven negotiation offer will be based on both parties’ interests and needs, not simply a demand for the outcome desired by your own client. Moreover, showing concern for the other side’s interests and objectives is important, even if an offer does not meet all of their stated goals. To be effective, value-driven negotiators keep reframing the issues in terms of how they can meet the interests of both parties, or at least the most important interests of each side. The goal of value-driven negotiation is to uncover and develop new ways of meeting both sides’ needs and ultimately to find an arrangement that meets enough of the core interests of both sides to prompt agreement to a resolution on that basis.
Set up, design, and tactics for value-driven negotiation differ from those used in adversarial negotiating. It is important from the outset to identify the type of negotiation you want to have and, assuming a value-driven negotiation is desired, to follow through with the set up, design and tactics that are necessary to promote a successful value-driven negotiation. In many if not most instances, a value-driven negotiation may produce a better outcome for your client and the opposing party, although it will require more work and skill on the part of the negotiators.
Laura A. Foggan is a partner with Crowell & Moring, LLP, Washington , DC.
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