Tips for Successful Legal, Business & Personal Negotiations
People negotiate everyday of their lives. Even if you hate to negotiate, you still end up doing it. We negotiate with home improvement contracts, our spouses (and kids); customers, clients, parents, and car salespeople, just to name a few. So if you have to negotiate, shouldn't you want to do it as successfully as possible? In this article, I am going to provide some basic tips and strategies that successful lawyers and business people use to come out on top.
However, before I get into the tips and strategies, I want to address those people who hate to negotiate. Not everyone likes to negotiate. In fact, many people would rather give in to the other side because they are so uncomfortable negotiating. However, If you hate negotiating, you need to wrap your head around the cold, hard fact that if you want something badly enough you may have to do it. Now, let's jump into the tips and strategies.
1. Know Your Outcome
You cannot be successful at a negotiation if you don't know what you want to achieve before you start negotiating. Imagine going on a road trip without knowing where you want to end up. Before you start negotiating anything you need to have a clear picture of what you ultimately want to achieve. For example, if you are negotiating a contract with a home improvement contractor, you goals might be to get him to reduce his total estimate or spread out the progress payments or include some additional work at no extra cost. Knowing your outcome will help keep you focused and prevent your from getting distracted by the other side's arguments.
2. Open Your Negotiations as Friendly as Possible
Remember the old saying about catching flies with honey? It still holds true today. Try to start the negotiations off in a friendly, low-key manner. While it might not stay that way as the negotiations continue, it is a good tip to try to set a friendly tone at the start. For example, again sticking with the home improvement contractor, you could start off negotiating his price with, "I really like your plan and am excited to have you get started with our addition, I just have a few details I want to discuss with you concerning the price." In most cases, the contractor will be more receptive to your request for a reduced price because you started off by letting him know that you are serious about moving forward.
Even if you are negotiating a legal matter, it is always a good idea to start things off as friendly as possible. There have been times in the course of a lawsuit when I have needed to negotiate a settlement with an adversary who has been less than polite in prior dealings. Even though we may not like each other, I start off as friendly as possible. For example, I might start off with something like, "I know we have had our differences throughout this case, but settlement is in the best interests of both our clients. I really think that we can work together to resolve this case. (If I am feeling humorous, and the situation is appropriate, I might add, "Plus, if we settle you don't have to hear from me any more.")
3. Listen to the Other Side (Don't just hear, really listen)
You can get more accomplished in a negotiation by listening to the other side than you can by talking. If you listen like a lawyer or detective you will begin to see the holes in your adversary's arguments or understand what they are hoping to accomplish. I generally stick with the old 80/20 rule - listen 80% of the time and talk 20%.
4. Be Prepared
It always amazes me when someone starts negotiating a position that they know very little about or can't back up any of their arguments with facts. If you are not prepared to negotiate, don't do it. You need to know your position, the facts the support it, and your adversary's possible arguments. If a lawyer starts arguing a position with me that he cannot support by facts, I am less likely to recommend that my client settle the case. You should always spend more time preparing to negotiate the you do negotiating. Again, I follow the 80/20 rule.
5. Start Reasonably High but Be Willing to Move
Of course, we all want as much as we can get. Remember Gordon Gekko and his infamous quote, "Greed is Good"? While we want it all you have to understand that you may walk away with less than you hoped for but still a good outcome. Generally, it is a good idea to start high, but within reason. Starting too high or at an unreasonable number or position will bring the negotiations to a quick close. Ignore, Gordon and don't be greedy. Know what you need and be willing to be flexible to get to a point where you have given a little but still end up where you need to be.
6. Point Out the Reality
I always like to point out the reality of the situation to my adversary. For example, I was recently negotiating a settlement on the eve of trial with an adversary whose client had a number of holes in his case. I mentioned to him that if is clients were to accept the settlement it would be case in his hand but he her proceeds to trial he will face a fair deal of uncertainty and could walk away with nothing. I highlighted the issues that I had with his client's position and explained that a jury will have an even harder time.
7. Be Patient
Don't rush it. If you appear impatient to your adversary he may view it as a weakness in your position and may offer you only a few concessions. You need to appear calm, reasonable and patient (even if you are not). On a side note, sometimes it takes months or years to settle a lawsuit.
8. Don't Jump at the First Offer
Go slowly and don't jump at the first offer that is thrown out to you, unless of course, it meets your desired outcome. For example, in a lawsuit where the demand is $50,000, I would not accept the first offer of $10,000. However, if I was negotiating a lower price with a contractor and he agreed to my reduction, I would not be greedy and try to get more than my desired outcome.
9. Be Ready to Walk Away
When you negotiate you have to be able to walk away. If you are not willing to walk away, you may accept anything that is offered to you. In a recent lawsuit, my client had authorized me to settle the case for up to $75,000. I knew that my adversary did not want to go to trial and was very inpatient. I offered him $25,000 and he took it. Had he been patient and willing to walk away he might have obtained a better result.
Next time you find yourself in a situation where you have to negotiate, use the tips above to help you achieve the best outcome possible.
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