Tips on Negotiating
Created by FindLaw's team of legal writers and editors | Last reviewed June 20, 2016
It may sound intimidating, and evoke thoughts of international ambassadors and high-powered CEOs, but negotiation is nothing more than the process of reaching a deal. The deal may relate to a sale of property, settlement of a business dispute, or any other instance in which at least two sides have differing interests and a common motive in resolving the problem. Often, negotiation can save you the stress and cost of litigation, and may be a better option than going to court. Here are a few common sense guidelines to help with your negotiation.
If You Are Unable to Walk Away From the Table, You Have No True Negotiating Power
This is the most problematic reality regarding negotiations. People are often placed in situations where they're unable, for whatever reason, to discontinue further settlement discussions, but nonetheless want to negotiate for better terms. Unless a person is willing and able to reject an inadequate final offer, he or she has no true negotiating power. The idea is that if the other party believes that you are willing to walk if acceptable terms cannot be met, that should be sufficient. However, the other side will also be angling for a strategy and thus will also want to appear as if he is willing to walk on a moment's notice. Unless you know that not to be true (i.e., you know that the other party will ultimately take your best offer, whatever it is) this strategy will fail since it will be neutralized as a tactic.
Accordingly, it is important to maintain a status wherein you are both legally and mentally prepared to walk from the table if acceptable terms cannot be reached. If you become legally entangled early on in a collateral matter, such that you have no true choice but to pursue and conclude the deal, your negotiating position will be compromised.
In Typical Negotiations, the More the Other Side Knows About Your Situation, the More Likely the Negotiations Will Be Successful
This statement runs counter to conventional wisdom. However, unless you have a good reason to hide adverse information, the more information the other party has in his or her possession regarding your needs, the better he or she may be able to suggest and agree to terms that accommodate your needs while still achieving his or hers. Further, an atmosphere of full disclosure increases the level of trust among the parties, which inevitably leads to more successful negotiations.
This is not to say that facts should be arbitrarily and randomly disseminated without control. Certain facts are none of the other party's business and there may be circumstances in which disclosure of such facts (if not legally required) will compromise your negotiating position. However, you should not automatically reject the idea of full disclosure as a tactic since it may be to your benefit.
In Any Successful Negotiation, There Is Usually One Person Acting as Moderator
Although negotiations are by definition two-way (and sometimes a multi-sided) affairs, they are always assisted by the assumption by one party of the role of "moderator." This role is often played by an for one of the negotiating parties, and such a role does not need to compromise the attorney's effectiveness on his client's behalf. A moderator is simply one who takes responsibility for keeping the negotiations on track, following up when the other party has not responded promptly, arranging meetings or other methods for bringing the parties together, taking responsibility for developing creative ideas and approaches which hopefully will address all parties' primary needs in a way which allows them to reach agreement, and finally keeping a cool head and a civil tone in the proceedings.
In some fortunate circumstances, attorneys from both sides undertake this role, and such negotiations are almost always successful. However, such a role is necessary in any series of complex or sensitive negotiations. It is sometimes a role played by a third party independent mediator (as in more formal conciliation proceedings) but it need not be a third party.
The Give and Take of Negotiation Is Inevitable.
Despite the best efforts of parties to limit negotiations, there's a certain inevitability to the negotiating process. The offer and counter-offer process will generally continue until exhausted. Usually, nothing either party says by way of "final position" statements will be effective if the other party is not prepared to accept the terms or feels that he can still exact some concessions. In that instance, you will normally receive a counter offer rather than an unconditional acceptance. Thus, avoid such statements in letters to the other side, realizing that they are likely to be ignored or interpreted as being mere posturing.
Settlement Negotiations Should Commence Immediately and Be Actively Pursued From the Commencement of the Dispute.
The strategy of refusing to negotiate and pushing aggressively at the outset of a dispute to establish dominance, and delaying negotiations until later is usually unwise. Not only do the parties (perhaps unnecessarily) incur attorney's fees (which usually forces the parties further apart since each has more invested), the parties may take actions during the interim period that make settlement more difficult. This change of position often times works against resolution of the dispute since it may close options and cause parties to incur costs.
Negotiations can be tricky, and get more serious and complex the bigger the stakes. If you would like legal assistance with a negotiation, you can contact a dispute resolution attorney in your area. You can also visit FindLaw’s Arbitration and Mediation section for more introductory information on this topic.
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