June 2003

The Art of Negotiation

by Michael Lantz

The psychology of the play is the most important issue.
You must understand the psychology of the negotiating process.

Diplomacy is the art of letting someone have your way.

— Daniele Vare

The art of negotiation is nothing more than the method of accomplishing or establishing the "diplomacy" of letting someone have your way. Here are some ideas lawyers may find useful.

The Golden Rule
Never bid against yourself. Make the other side start the bidding.

1. Learn to read the room. You need to understand the psychology of the persons in the room and their individual motivations. Negotiations are like a complex poker game. In some cases, the facts may not be the most important issues. Above all, listen, and the players in the room will tell you how to make the deal work.

2. Understand that in any negotiation there are only two important things: (1) money and (2) brains. Money can buy the brains, and the brains are trying to get the money. The brains, in many cases, may have no money, but can still be in a position to negotiate because of their strength and their ability to make the money show all of its cards first. Then the brains will play the money's cards as if they were the brains' cards, and make the money feel good about it.

3. Never talk religion in a business meeting. Whenever someone mentions that they are a good — something — no matter what the religion, everyone else at the table will reach for their wallet to make sure it has not been, and will not be, picked. If you mention religion, from that point forward you will not be trusted.

4. Never have more than two people on your side of the table and then have only one person do the talking. The attorney should direct traffic and control the flow of the meeting. The client needs to be well briefed as to the expected scenario. When there are more than two people on one side of the table, they will all want to talk, which will cost that side of the table dearly. If the opposition has more than two people, then attempt to direct the conversation among the persons on the other side. This technique will keep them off balance, and they will overstate their case and show their weaknesses.

5. The job of the attorney is to be a salesman of the client's position. Make a sale — motivate the buyer to buy.

6. Don't argue law, and above all, don't argue your case. It weakens your position and gives away too many cards to the other side as to your strengths and weaknesses. Most attorneys are unable to handle the negotiator who refuses to argue law and discounts its value, especially in a commercial/real estate situation. Such a technique disarms the opposition and is frustrating to them.

7. Don't structure a deal to fit the law. Structure the deal not only to fit with what the client wants, but also to make good business sense; then modify it to ensure it complies with existing laws and what might be anticipated in the future. If it is not a good business decision, the law is irrelevant.

8. Know when to get up and walk away. Don't want the deal so badly that you are not willing to walk away. If you can't walk away, the opposition will sense it and use it to their advantage.

9. Learn to listen very carefully to all persons in the meeting, including your own client. They will slowly, in their own way, give you clues to how the matter can be successfully negotiated. Listen for what the true objections or issues are from all sides, including your own client. In most cases you won't find out until everything has been covered several times.

10. Learn how to use the opposing counsel as an ally, either by making him the good guy and you the bad guy, or by making his perceived abilities called into question. Imply such things. Don't make them blatant, as you will lose points if you do and opposing counsel will become the enemy. Also, learn how to allow opposing counsel to address your client directly, perhaps to get certain points across when your client doesn't want to listen to you.

11. Argue a minor point, using it as a weapon against the opposition to wear them down. This can be effective against bureaucrats who are just doing a job and don't enjoy the confrontation or the adversary environment. This can be used as a tool to make negotiating the major issues much easier.

12. Never attack opposing counsel. Remember, both of you are just doing a job. Once you attack opposing counsel or are attacked yourself, it tells you that someone realizes they have lost control and are losing their position and argument. If opposing counsel ever attacks you personally, be very careful, but don't let them get away with it. If you allow them to get away with it, they will perceive you as weak and will continue to attack, which does not address the issues and is not to your client's benefit. Generally, show sympathy for their obvious weak position, which has caused them to attack you, or cut opposing counsel to shreds. With opposing clients present, the use of the right technique can be extremely effective in undercutting their confidence in their attorney and their position, thus getting them to agree to a solution that is favorable to your client.

13. Don't try to win. If you are attempting to win, you will probably lose and/or end up costing your client a lot of money. Being successful may be minimizing the damage to your client in a negative situation.

14. Be careful not to overnegotiate your position, making it too strong, because you might strangle the other side and make the deal ultimately fail. This situation might require you to renegotiate the deal in the future to make it more functional and practical to keep it from ultimate
failure.

15. Know when to take the deal away from the other side and not let them have it. Make them want it and make them commit to it.

16. Don't think that just because a negotiation breaks down that the deal is dead. Consider it as nothing more than a pause in the negotiations.

17. Know when to destroy the negotiation by blowing it out of the water; then put it back together so everyone saves face and feels as if they have kept or gotten something. If you destroy it without giving something back, you will lose. With it you will generally gain considerable respect.

18. Know when not to negotiate. If either side is too ready to negotiate, it makes for a bad environment, as they may not be able to listen and hear the method of solution or be too fixed in their position. Be patient and it will come to you.

19. Depending on the client and his ability, always consider, with the right coaching and preparation, turning the client loose with the opposing clients and negotiating the matter without attorneys present. Sometimes the best deals are consummated this way. But always spend time with the client in advance and prepare him for as many issues and contingencies, including personality issues, as possible.

20. Don't let egos enter into the negotiations. Once that happens everyone will lose. If an ego is obviously at work and has to be dealt with in order to complete the deal, understand it going in and deal with it in a manner whereby it is not a primary issue. Always make egos a secondary issue, but don't lose sight of how to use the opposition's ego to your advantage.

21. Be a counselor and an arbitrator to your own client. Be able to be objective and effective when you have more than one client. The conflict issue may be present, but in small business, separate attorneys are many times not affordable. In large business, you may represent the corporation, but will have to deal with the personalities of various officers and directors. Learn how to handle such clients and keep them happy. In some cases, you may have to act as a mediator among the executives of the corporation to develop a consensus on the issues and resolution.

22. Learn how to debate/negotiate using the position of the opposition to your advantage and their disadvantage. When the facts and situation are right, agree with the opposition's position, and then give it a twist to your advantage. Once you are able to use their position as a foundation, build your house on top; this makes it difficult for them to wiggle out.

23. Make payment using cash. Start counting $100 bills and everyone will stop talking. They will all now want to count the cash. The client will love it, but opposing counsel might get upset because with the cash they lose control over the money, which could include the payment of their fees. Get a receipt, of course. Have all the agreements ready for signing at that time.

24. Don't ever threaten criminal prosecution. If there is a possible criminal issue, figure out where the emotional guilt lies and then determine how to use it as an implied threat that will work against the emotional guilt and fear.

25. Learn how to negotiate with a judge and/or jury during open court argument.

26. Don't argue to death a minor point that can destroy your credibility with a judge or jury.

Remember: The psychology of the play is the most important issue.

Michael Lantz is retired from the law firm Maas and Lantz, and a retired lieutenant colonel in the U.S. Air Force Reserves. He serves as president of Capstone Mfg. LLC, a company specializing in new-technology insulation products for the construction, transportation, marine, oil and gas, industrial and aviation industries. He published the "Tax Guide for Reservists" from 1979 through 1986 in the Air Reservist magazine and The Officer magazine.

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