Paul F. Monicatti –
Professors James J. White and Harry T. Edwards, in their 1977 seminal text The Lawyer as a Negotiator, called it the “The Art of Negotiation”. Howard Raiffa titled his 1982 book The Art and Science of Negotiation. And in 2008, Barry Goldman published his book The Science of Settlement – Ideas for Negotiation. Whether negotiation is considered an art, a science, or both, at its core it is a skill sharpened by training and experience.
Science tells us that, typically, people and animals such as our pets will act in predictable ways in response to certain stimuli. In order to encourage predictable behavior, negotiators can use certain techniques as stimuli which usually prompt others to work with them to achieve client goals. Here are 10 time-tested techniques to accomplish them based on my observation and participation as a mediator in thousands of negotiations since 1986.
- Learn from past behavior of others. All negotiations begin long before any offers are actually traded. Thorough preparation is an essential ingredient of success. Therefore, learn as much information as possible about the other parties – both the attorney(s) and the client(s) – including their background, experience, specialties, personality, attitudes, reputation, financial condition, business methods, and litigation track record. Google, LinkedIn, and attorney websites are convenient resources. Court records and other public records such as governmental agency filings also are helpful. Use that information not only to craft strategy but also to make connections, find common ground, and start building collaborative working relationships. Assume nothing and ignore stereotypes. Plant seeds for later harvesting.
Additionally, prior negotiation history can provide valuable clues because bargainers tend to develop a behavior pattern and routinely employ it in subsequent negotiations. Armed with all of this information, you ordinarily will know with whom you’re dealing and what to expect so you will be better prepared to act and react accordingly.
- Anticipate unexpected behavior. On the other hand, experience also tells us that human nature can lead to unpredictable behavior. In order to react to a surprise, you must have the confidence and readiness to improvise. In his creative book entitled Improvisational Negotiation, Jeff Krivis, who is one of the leading mediators in California and the United States, submits that “a [negotiation] is always an improvisation. If your intuition tells you that the traditional approach you planned will lead to disaster, have the confidence to try your own counterintuitive approach.” p 197.
“Improvise” has various dictionary meanings, including to invent or arrange without advance preparation or to construct from whatever is conveniently available. “Improvisational” means spontaneous, off-the-cuff, or in the spur of the moment. While these terms commonly are applied to comedy, theater, jazz, and jerry-rigged repairs, among other things, they also apply to negotiation.
Improvisation relies to a great extent on instinct and intuition. The American Heritage Dictionary of the English language defines “instinct” as the innate aspect of behavior not guided by reason but by reflex action or a powerful impulse. (Emphasis added.) Slightly different although similar, “intuition” is defined as knowing something without the use of rational processes, immediate cognition without activating reason. (Emphasis added.) Thus, in both processes, reasoning is not a factor, and the end result is the same – quick thinking provides answers. As famously proclaimed in the soon-to-be a classic movie Top Gun: Maverick, “Trust your instincts, don’t think, just do.”
From my lengthy negotiation experience, reliable instinct and intuition in a particular situation result from attentive listening, careful observation, and focused mindfulness (i.e., presence, awareness) throughout the negotiation, allows you to modify your strategy when necessary. Because negotiations are dynamic and evolving, bargainers must be ready to process new information and unexpected developments as they unfold and then react quickly and correctly.
- Earn trust, credibility, and confidence. Begin developing momentum toward eventual negotiation success by honoring your commitments, showing respect for the other side despite disagreements, and cooperating in scheduling pre-negotiation activities. Earn trust by voluntarily sharing information openly because withholding relevant information creates suspicion and erodes trust.
Show interest and concern for others’ views by asking open-ended, non-judgmental, and inoffensive questions which won’t make them defensive. Over time, small talk can build rapport and form relationships. Behave in ways inviting respect, civility, and trust from the other side instead of alienating them with persistent and destructive rhetoric that is aggressively adversarial, argumentative, and accusatorial.
Sensitivity to reactions of others and a willingness to adjust behavior to induce positive reactions from them also helps according to Dr. Tanya Menon, a well-known expert and researcher in the fields of decision making, influence, and persuasion. Transparency, candor, and authenticity are other frequently noted attributes.
According to the Harvard Law School Program on Negotiation (“Harvard PON”), positive negotiation relationships are important not because they engender warm, fuzzy feelings, but because they engender trust – a vital tool in securing desired actions from others. Consequently, mutual trust between counsel if not also the clients is another essential ingredient of any successful negotiation.
- Set the right tone. Adopt a collaborative attitude. Acknowledge valid points made by others. Be flexible and have an open mind receptive to different perspectives. Attack problems not each other. Generate creative options in an effort to satisfy the other party’s non-monetary interests, needs, concerns, and goals. Tender principled offers, offer rejections, and counteroffers by providing explanations and justifications so that they are better understood and possibly more persuasive.
Anticipate others’ negotiation behavior and tactics so that you can be pro-active in taking steps to minimize their impact. For example, if you are expecting an emotion-laden appeal, then consider opening negotiations first by showing compassion, empathy, and understanding, and by offering a sincere apology when appropriate. This approach may defuse tension and animosity. A pro-active approach also would be beneficial to affirm a serious, good faith intent to resolve the dispute when the other side has doubts.
- Anchor the negotiations. Anchoring is a psychological phenomenon whereby people often are unduly influenced by the initial figure stated when estimating value. This initial figure then serves as a reference point or a benchmark which anchors future expectations about actual value. Researchers in a number of studies have shown that opening offers can influence negotiation outcomes. Gifted negotiators are those whose initial anchoring offer is exaggerated as much as possible within reason without causing the other side to walk away, thus leading to a series of counteroffers and concessions ending in a better (higher or lower as the case may be) final number or deal.
- Reciprocate whenever possible. According to Harvard PON, people tend to respond to others’ actions with similar actions based on research in the social sciences. Therefore, to activate the so-called “reciprocity rule”, make a concession of lesser importance to you but more valuable to the other side. This rule dictates that the other side then will feel obligated to make a concession to you.
The “rejection-then-retreat technique” is similar to the reciprocity rule, but with a twist. The chances for agreement to a certain request of yours are increased when you first make a larger request than you actually are seeking which will most likely be rejected. Then, after the first request is in fact rejected, you make the smaller request that you were really interested in all along. Consequently, the recipient will view your second smaller request as a concession, whereby they will feel obligated under the reciprocity rule to accept your second request or make a similar move toward your position.
- Expand the pie. I use this phrase to describe the process of simultaneously making multiple offers consisting of different monetary and non-monetary components, thus keeping several options in play to expand the possibilities for settlement. Comparison of the terms of a plan “A” with those of a plan “B“ or “C”, etc. could prompt a party to choose certain components from different offers or a particular offer given the alternatives available. Subliminally, this encourages creativity when considering combinations of various monetary and non-monetary options to increase overall value and satisfy a party’s underlying interests. It also causes the other side to indirectly reveal their most valued objectives when they would not otherwise expressly admit them.
- Send the right signals. Convey subjective assessments of negotiation progress in verbal signals or messages by words and conduct in addition to specific monetary offers. This additional valuable information is a sign to the other side to react in certain ways if they want to eventually reach a deal.For example, if someone expresses pessimism about settlement prospects, it can signal there is little room for movement in their numbers or an attorney’s client is unreasonable or unrealistic. Conversely, when someone expresses optimism, it can signal they have an open mind and can be flexible.Other obvious, cliched signals, if meant sincerely and truthfully, include: “let’s cut to the chase” (no more posturing, start using real numbers); “there’s no more authority” (someone else with settlement authority must now become involved); “you have to make a big move for us to continue talking” (self-explanatory); and “we’re getting close to my bottom-line” (a warning that the monetary offers being made are insufficient to resolve the dispute, so it’s time to reevaluate your position before it’s too late and consider adding creative non-monetary components to the monetary ones to increase the overall value of the offers).
- Control the pen and paper. Develop and prioritize in advance your ideal bullet-point term sheet. Better yet, prepare a draft settlement agreement containing your standard boilerplate deal terms with blanks for later completion or modification during negotiation in accordance with a final agreement. Use them as a road map for discussion purposes and if satisfactory progress is made during the negotiation, consider presenting your draft to the other side in order to focus them on your deal points.
- Negotiate like a poker player. Although it might be considered somewhat outdated or controversial nowadays in the era of Getting to Yes and interest-based bargaining, Professor James J. White, who co-authored the 1977 book The Lawyer as a Negotiator mentioned earlier, had this theory on the essence of negotiation:
On the one hand the negotiator must be fair and truthful; on the other hand, he must mislead his opponent. Like [a] poker player, the negotiator hopes that his opponent will overestimate the value of [the negotiator’s] hand. Like the poker player, in a variety of ways [the negotiator] must facilitate his opponent’s inaccurate assessment. The critical difference between those who are successful negotiators and those who are not lies in this capacity to both mislead and not to be misled.
* * * I submit that a careful examination of the behavior of even the most forthright, honest, and trustworthy negotiators will show them actively engaged in misleading their opponents about their true positions. * * * To conceal one’s true position, to mislead an opponent about one’s true settling point, is the essence of negotiation. (Emphasis added.) James J. White, Machiavelli and the Bar: Ethical Limitations on Lying in Negotiation, 1980 Am B Found Res J, p 926, et seq.
And then there’s this advice from the late singer, entertainer, and philosopher Kenny Rogers in his hit song about a poker player (and life):
“You’ve got to know when to hold ‘em,
Know when to fold ‘em,
Know when to walk away,
And know when to run.”
The Gamble
___________________________
In conclusion, while there are no guarantees of negotiation success, you definitely can improve your odds in most cases by following a few simple suggestions derived from training, experience, science, and scholarly literature, except for those rare disputes which are truly viewed to lie at polar extremes as either perfect (can’t lose) cases or nuisance (can’t win) ones.
______________________________________________________________________________
Paul F. Monicatti is affiliated with Professional Resolution Experts of Michigan, LLC. He’s been an arbitrator since 1983 and a mediator since 1986 in all areas of the law except family law and criminal law. He’s earned the highest ratings possible from Martindale-Hubbell, Best Lawyers in America, Super Lawyer, U.S. News and World Report, Crain’s Detroit Business, and the international Who’s Who Legal: Mediation. A Michigan Lawyers Weekly 2019 Leader in the Law, he was named Best Lawyers’ 2019 Troy Area Mediation Lawyer of the Year, 2018 Troy Area Arbitration Lawyer of the Year, and 2011 Detroit Area ADR Lawyer of the Year. He’s served as a court-appointed mediator, settlement master, arbitrator, facilitator, case evaluator, receiver, expert witness, umpire, and referee. He authored the chapter on Mediation, Arbitration and Other Dispute Resolution Methods in addition to co-authoring the chapter on Settlement, Negotiation, and Alternative Dispute Resolution for ICLE’s Michigan Civil Procedure. He is a co-founder of ADRoit Dispute Resolution, Strongbridge Negotiation Strategists, and the International Academy of Mediators.
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