Navigating The Negotiation Traps: 5 Factors To Consider

“Let us never negotiate out of fear, but let us never fear to negotiate.”
— John F. Kennedy

Choosing a career as a lawyer, whether litigious or transactional, means you’ve chosen a career based around negotiation. The main obstacles to negotiations are simple; they are yourself and your counterparty. You will want one outcome, they will want another outcome, and where you end up depends on you and it depends on them.

Here are the things I consider (in order) before I negotiate for clients:

1. What;
2. How;
3. Who;
4. Why; and
5. When and Where.

1. What

First of all, I work out what my client wants from the negotiation. It’s that straightforward, and it always stays at the forefront of my mind. As a transactional lawyer, I have clients who more often than not simply want to execute a deal, and my job is to facilitate that in a way that minimises risk. Other times a client will tell me that a deal is contingent on getting certain assurances or concessions, and I know that them making money or growing their business is reliant on us ensuring we get the counterparties to deliver those assurances or concessions.

Trap No. 1: The greatest trap for the “What” is getting mired in detail. At any point in the process of the negotiation, you need to be able to take a mental time out and ask yourself, “Will this help get what we need or want?”, and then ask, “Does the client care about this?” If the answer to both questions is no, it is time to move on.

Trap No. 2: The second greatest trap for the “What” is saying, “We would never agree to [X]”. I don’t say “never” in negotiations, it’s a dangerous word that can come back to haunt you. I sometimes say “can’t” or “won’t” on my clients’ behalf if they have a rationale for not wanting to do something or being constrained from it for whatever reason, but I never say “never.” After all, things can change, the market changes, people change, and each negotiation is different from the next.

2. How

“How” is just as important as “what”, and it’s purely personal. I constantly consider how I want to be perceived by people on the other side of my negotiation and the impact on my reputation if I choose to take certain negotiating styles. I consider how my client will be perceived if I take certain positions on their behalf and once I have reconciled my thoughts around perception, I come to a conclusion about how far I am prepared to go and what I am prepared to do and say to get what the client wants from their negotiation.

Trap No. 1: Not compromising your hard boundaries. For example, I find it to be really poor form when a more senior lawyer doesn’t respect a more junior lawyer on the other side in a negotiation based on seniority alone. It happens quite often as the legal profession is extremely hierarchical. For me, it’s a hard boundary to ridicule someone openly in a professional environment and I just won’t do it. There are other better ways to manoeuvre when a junior lawyer on the opposing team is being difficult or getting things wrong, and making them feel small is not smart. One day that junior lawyer may be a client or they may be seated opposite you as a senior lawyer in another negotiation and you won’t want to look back and remember the cheap shot you took at them with regret.

Trap No. 2: Not being versatile with your styles. Subject to not compromising hard boundaries, you do need to adapt your negotiation styles to suit the audience. I have the joy of having clients in the same institutions who need to be approached with different styles and who want me to approach the opposition with different styles. If I am facing a collaborative audience, I might be quite assertive around the points my client wants to win in the hope that they will respond collaboratively. Conversely, if I am opposite someone assertive, I try and chop and change my style between collaborative, analytical and assertive, taking extreme care about how often I show assertiveness in order to try and keep the negotiation open.

3. Who

It is critical to know who you are negotiating with. My absolute pet hate is being dragged onto a last-minute call or into a meeting where I don’t know who will be there. Negotiating blind is very difficult, it puts you on the back-foot and you should avoid it at all costs. In order to get the most from your negotiation, find out who will be opposite you, what their role is, and how much decision-making power they have.

Trap: The blindsiding game. It happens all the time to unwitting trainees or associates when their counterparty says, “I’ll just conference in [my more senior associate/partner]” and that trainee or associate becomes a sitting duck on a call where they thought the power balance of the discussion was going to be fairly equal. In a market where reputation is of paramount importance, few junior lawyers want to be seen by a partner or senior lawyer to be unreasonable, obstructive, aggressive, or just plain wrong. As the dynamics of who conducts a negotiation are relevant to the outcome, I would always consider declining the offer of being outnumbered and suggest re-convening when you can arrange for the playing field to be levelled.

4. Why

You negotiate to persuade people to move their position. The question of why you negotiate is related to, but different from, what you want from your negotiation. For example, I might wake up one day and want to buy a new car. I know I want a new car, I know why I want it, and I know that I have a certain amount of money to spend and a certain amount of time to look for it. When I enter the car show room, the car sales person only knows one of four of those pieces of key information. They know I want to buy a new car. They do not know why, they don’t know my budget, and they don’t know my time limitations. That is the information that could make the difference to them making a sale to me or not, and for me it is the difference in the price I end up paying.

Trap No. 1: The first “why” trap is giving away too much information that will allow the counterparty to narrow your scope for negotiation leverage.

Trap No. 2: The second “why” trap is not using your power of negotiation (in the car sales person’s shoes) to draw out relevant information from the other side. This can be a complex process, and it is vital to create a connection of some form and empathise with the person you are engaged with. Asking them questions unrelated to the negotiation (such as about their day, their holidays, their children) will start to draw conversation out and create a rapport. Statistics suggest that people are highly more likely to transact with people they like. Further, it is helpful to consistently use repetition and summarise people’s positions to change juncture. Believe it or not, expressing someone else’s position clearly can assist your own position greatly. Having them agree to your summarisation can be the first positive step to reaching a collaborative solution because you have formed agreement on what their position is and there is more chance of them agreeing to move in your direction once you have sought some form of positive sentiment from them.

5. When & Where

When and where you hold your negotiation goes to the initial planning stage of any negotiation. If you want to get the most from your negotiation, it is crucial to check that your opposition has enough time to spend engaging with you. You should over-estimate the time your negotiation will take, because you may have to spend longer than you think drawing out information or analysing the response to positions. If a negotiation is to be conducted face to face, a lot can be implied from where a negotiation is held.

Trap No. 1: Allowing someone on the other side to use time against you is a common trap. I have lost count of the times someone has said to me that they don’t have time to discuss issues because the deal has to close by midnight on X date or else. There’s always the inclination to question why, if the deal is so important to that person, they left it so late to put it in place! Find out whether people are providing false deadlines (it’s commonly the case).

Trap No. 2: There are certain advantages to being able to host a face-to-face negotiation and set up a room to suit your plans for running the negotiation, so always work out if hosting is feasible and take the opportunity to reap strategic benefits of doing so.

Not all lawyers are good negotiators; it is a skill to be consistently practised and honed, but those most able to listen, to question intelligently, and to read body language can become masterful negotiators over time.

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Jayne Backett is a partner at Fieldfisher LLP in London specializing in banking transactions, with a particular focus on real estate financing. Fieldfisher is a 600-lawyer European law firm, with a first-class reputation in a vast number of sectors, specifically, financial institutions, funds, technology and fintech, retail, hotels and leisure, and health care. Jayne has a depth of experience in mentoring and training junior lawyers and has a passion for bringing discussions on diversity in law to the forefront. She can be reached by email at [email protected], and you can follow her on Twitter: @JayneBackett.