Negotiations – Finding the Motivating Factor
July 13, 2009
The preparation for a negotiation begins with a very thorough discussion or set of discussions with the client about just what its particular goals are. Some or all of the following questions are important:
What is the client trying to get out of the particular project that is under consideration?
What are the key components that must be retained or achieved to reach the client’s goals?
What other aspects of the project are secondary goals, nice to achieve but not critical to the achievement of the client’s goals?
What aspects or matters must be avoided if there is to be a successful outcome?
Sometimes the outcome can be as straightforward as determining a ceiling price, beyond which the project does not make economic and business sense. At other times, a critical aspect to be avoided can be ensuring that the project or a component of the project does not cross a regulatory or governmentally imposed threshold that may make the project uneconomic. In other contexts, the aspects to be avoided are complex mixtures of business, legal and other issues unique to the client, its business or its industry.
This will often involve a series of discussions with a number of business people from various groups within the corporation, starting well before the negotiations begin and continuing as the negotiations evolve. At each step along the way the corporate lawyer will maintain open and complete communications with the appropriate client representatives.
Next, the corporate lawyer does an analysis of the legal issues associated with the client achieving those goals. It is imperative that the corporate lawyer determines whether the client’s goals, and all key aspects of the project, are achievable. To be effective, the corporate lawyer should also determine whether or not the project and its key components have legal issues associated with them that were not apparent to the client.
At the same time, the corporate lawyer tries to quickly understand as much as possible about the other party or parties in the negotiation and their stated and apparent goals. Who is on the other side of the transaction and what is their background and track record? Why it is that they are interested in pursuing the matter that is under consideration? What they are trying to accomplish and what is most important to achieve from their perspective? What, if anything, are they trying to avoid?
A key to successful negotiation is knowing who is across the table from you and their motivation. Finding the answers to this and to as many of these questions as possible will help the corporate lawyer maximize the client’s position.
The most effective facilitator has identified where the client wants to go and completed the preliminary work to understand the issues involved on both sides of the bargaining table. It is not enough just to identify problems: To be truly effective and best maximize his or her role, the corporate lawyer must utilize the parties’ mutual interests to achieve the client’s goals. It is not enough to know what the client wants to achieve. It is also not enough to know what the other side’s goals are. It is only by bridging gaps that arise during negotiations and finding common ground for the parties, to the extent that one is working in one’s client’s best interests, that the skilled corporate lawyer achieves the client’s goals.
If the other side has a problem with one aspect of a negotiated proposal and determines that it cannot go forward, it may walk away from the deal and one’s client loses the benefits of the project. If, on the other hand, the astute and prepared corporate lawyer can develop a solution to the other side’s problem, within the parameters of one’s own client’s goals, then everyone can achieve their goals. The corporate lawyer must be the facilitator, bringing the parties to a reasonable resolution that is consistent with achieving or exceeding the client’s goals.