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Game theory in the popular press.

Negotiating Better Results for Your Clients

New Jersey Lawyer

Christine S. Filip
May 1999
text is a cache of http://marketing.lp.findlaw.com/articles/filip9.html

For a number of years I have been doing research into how one's behaviors at the negotiation table affects financial and other outcomes. For lawyers who negotiate on their clients' behalf day in and day out, understanding this connection could be highly beneficial, or failing to notice it, highly detrimental.

Let me demonstrate from a page out of my recent life before I interview two lawyers who are polished negotiators.

Setting: December, Lower Manhattan, an evening at Small Claims Court. I am pursuing damages against a parking garage that has dinged every panel of my car (except the roof) and has not answered any of my phone calls or missives. Waiting for my case to be called, I hear a strong contralto calling out my name. Looking to the end of the aisle I see a rumpled person acting Napoleonic.

"Christine Filip" he yells again.

I wait two beats, look his way and respond, "Yes, who are you?"

"Step out here!"

I remain seated. "Who are you?" I shout back.

"The lawyer for XYZ Parking Company."

You get the picture. In the next 10 minutes, the other lawyer impugned my age, marital status and competence before asking me to agree to an adjournment. I did not agree so we waited another two hours to reschedule. At least I had my computer. On the return date, I alone showed up and got a default judgment for over four times the amount offered during the first court house 'negotiation'.

While this is a low dollar example, it does illustrate the point: negotiation behavior affects financial results. In talking with two lawyers, one a litigator and one a transactional lawyer, about how they achieve results for clients during negotiations, three themes emerged: 1) preparation is paramount; 2) credibility and rapport usually outweigh ego as a negotiating strength; and 3) because the consequences and parties to a negotiation live on, negotiation behavior can affect future dealings.

Prepare Better than your Opponent

Preparation is the most neglected, and most critical, phase of a negotiation. It should represent the largest time commitment of the total negotiation. The goal of this phase is to understand what outcomes would make the other side and your client both feel successful. After doing this homework, Steven Tarshis, a business lawyer at Budd Larner in Short Hills, NJ, says, "Then you have to separate the essential elements from the important ones." Tarshis points out that the lawyer's job is to understand the difference between a legal decision versus a business decision. "I am in charge of helping my client make an informed decision; I can recommend, but I cannot substitute my judgment for the client's."

Once the essential vs. important elements are listed for both your own client and the other side, you can rationally inspect both the leverage and limitations of each side. Create two if not three scenario outcomes, carefully analyzing the financial impact of trade-offs you may have to make and list them as good, better and best financial outcomes. And make sure you and the client know the financial and legal impact of each term, condition, and trade off, so that you do not trade off a pricey business issue or precious legal condition in a bad mix.

Mark Bodner, partner in the NYC law firm of Bodner & Waldinger, is a litigator in the medical malpractice field. Preparation is the wellspring of his firm's success. It's his firm's practice to spend the greatest amount of time "trying" the case in the office to reach the initial issue of whether or not to file suit. Once filed, however, his mission is to educate his adversary, obviously without revealing critical trial strategies, so that the ultimate question is not the merits of the case, but the amount for which it should settle.

"Too many attorneys are anti-disclosure, hoping to use surprise as a tactic," Bodner comments. Because of his firm's rigorous preparation, his opponents, whom he sees again and again, know that if he has filed suit, it has merit. On the issue of educating adversaries, Tarshis agrees: "Sometimes to get a good result, you have to educate the other side."

What Place Ego?

If preparation is the bedrock of achieving good results in a negotiation, establishing credibility and rapport with the other side is just as critical. Getting information from the other side -- what they consider essential vs. important -- starts with analyzing how they have drafted or revised documents, but is even more subtle as the negotiation progresses.

To get better information from the other side you have to be flexible, adaptive and read people well. Tarshis comments. "Ego has no place in getting what your client wants; ego locks you in to one type of behavior or act and you can't have the same act for every negotiation because you won't be able to ferret out what the other side wants. It's like the garbage issue in a failing marriage ('you never take out the garbage'); but it's not really about garbage, it's about something else. You have to know what else."

To build rapport and learn about unrevealed issues, Tarshis focuses on reading people, adapting to their style, revealing information and even sometimes revealing a seeming confidence to build trust.

Most negotiation training counsels one to 'solve' objections when in reality, one cannot make the roadblock disappear. My experience has shown that understanding the reason for the roadblock is ultimately important, and founded on getting information. When you hit an impasse, try three steps with the caveat that you do not go to #3 unless you're ready to fold the tent:

1. Be conciliatory. 'I realize this issue is important to you, but I need more information about why it is....Can you tell me more so I understand?'

2. Do the Colombo: 'I must be missing something here....I'm confused. Tell me why you absolutely need X???

3. Bring in the Judge: 'So what you are telling me is (paint the best picture from their view)...you want X,Y, and Z. If I did that, how would I explain that to my client and the metaphoric judge (my managing partner, my client's accountant, the ethics board, my dog -- any absent judge)?' This puts the other side into a corner by making them stand in your shoes in front of your judge. Use this as a last resort. It can kill a negotiation or add enough levity to move on.

When you know the reasoning, you have a basis for tradeoffs and concessions. Use factual data to support your view, and if you do concede something, make sure you ask for something in return of equal value, even if that's hard to calculate.

The Life of a Negotiation

In all but a few cases, a negotiation is not a fixed instance in time. As both attorneys point out, your reputation, based on your negotiation actions, lives on. Tarshis summarizes the long view: "In transactional matters, your client is often going to have an ongoing relationship with the other side. The client, not you, has to live with the agreement and its consequences. My job is to help clients make the most informed decisions and understand the legal consequences."

In fact, negotiation theory and practice today is predicated on game theory research, a primary tenet of which is that you will meet your opponent again in this life. Unless you are prepared for the consequences of a scorched earth strategy, remind yourself of this important piece of research. And yes, I did move my car to a new garage. No sense tempting game theory.


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