A negotiation has two stages, and lawyers routinely underinvest in the first one.
That was the through-line of a presentation I recently delivered with Frank C. Laney for the Expert Continuing Legal Education (CLE) Series sponsored by the North Carolina Bar Association. Frank is an attorney and mediator with the North Carolina Center for Mediation and, like me, a Dispute Resolution Commission certified Superior Court, Family Financial, and Clerk of Court mediator. Spending an hour trading war stories and hard-won lessons with him was the best kind of professional education — the kind where the presenters learn as much as the audience.
Here is the short version of what we covered.
What a Negotiation Actually Is
We started by defining our terms. Negotiation is the interaction between two or more people with the intent of modifying the behavior of the other. Simply put, it is persuading someone to do something they would not ordinarily have done.
That framing matters because it puts the other person at the center of the negotiation. You are not just solving an equation. You are trying to move a human being.
Stage One: Before the Negotiation
Advance preparation is critical. We identified five important things to consider before ever taking a seat at the negotiation table.
Analyze your key facts and legal arguments. What do you need to prove to win, and how will you prove it? What are the best facts and arguments for your client, and how do you maximize them? Just as important — what are the worst facts, and how do you plan to minimize them? One counterintuitive strategy: pre-emptively acknowledge the bad fact. It costs you less than you think and it buys you credibility, particularly when you follow it quickly with a strength.
You should also decide, before you walk in, what information you want to share and what you want to learn from the other side. Holding your cards close to the vest or laying your cards on the table is a strategic choice, and different cases call for different strategies.
Identify goals and interests. What are your client's actual motivations, needs, and core concerns? If they have several goals, how do they rank them? Also look for differences in preference you can trade on — i.e.: terms that cost one side very little but are worth a great deal to the other. That is where value gets created rather than merely divided.
If your client tells you the goal is to win, they have not yet thought hard enough about the question. Winning is not a goal. It is a means. Ask them what they get when they win.
Consider the other side's perspective. It takes two to reach an agreement. If you do not consider the other’s perspective, then you are missing half of the equation. What are their best facts and legal arguments? What might their motivation and core concerns be? How might you be able to address them in a way that could also be acceptable for your side?
Have a plan, but stay flexible. Value the case. Know your optimistic goal, your target, and your tentative walk-away number, and know how you intend to move between them. Begin framing an opening proposal that lands inside a realistic Zone of Possible Agreement — opening somewhere the other side could never plausibly go is, at best, a waste of everyone’s afternoon.
Your plan should never be, "I’ll respond to whatever they do." That hands them control of the entire process.
Calibrate your attitude and approach. It takes two people to agree. Consider the best approach for this case, this client, and this opposing counsel. Then stay flexible enough to adjust as you learn new information during the negotiation.
Four Questions to Help Value Your Case
Frank Laney then walked the group through a four-question framework for calculating what your case is worth.
- What do you get when you win? Work through every category and element of damages, on your good day and on your bad day.
- How often will you win? There are no guaranteed outcomes in court. There is always some amount of risk by going to trial. What you may get at trial should be reduced to account for this risk and uncertainty.
- What will it cost you to win? Direct trial and appeal costs, attorneys’ fees, and the economic and non-economic costs people routinely leave out of this analysis.
- Can you collect the judgment? Solvency, the cost of collecting, the relationship cost of collecting, and your own time and effort.
Run those numbers and you have your BATNA — your Best Alternative To a Negotiated Agreement. It is the realistic baseline against which every offer should be measured.
For example, if you believe you will realistically win $100,000 at trial and there is a 50% chance of this trial outcome, then you should multiply $100,000 by .5, which gives you $50,000. You should then reduce $50,000 by the amount it will cost you to win at trial. For our example, let’s assume it will cost you $20,000 in attorneys’ fees. $50,000 minus $20,000 is $30,000. If you also have concerns about the collectability of this amount, then it should be further reduced so you can determine your realistic BATNA.
Stage Two: During the Negotiation
You are negotiating with a human being, so it helps to understand how human beings operate under pressure. We discussed several different strategies to employ during the negotiation.
Summarize and clarify. A short restatement of what has just been discussed sorts out misunderstanding before it hardens into misconception.
Avoid irritators. These are words that carry no persuasive power but reliably annoy the other side. Most negotiators know better than to insult anyone. Far fewer resist the urge to say gratuitously favorable things about their own position — describing their own proposal as "generous," "fair," or "reasonable." Self-praise does not persuade. It implies the other side is being unfair and unreasonable, and they hear exactly that.
Ask questions. Questions gather information, steer the discussion, and convey disagreement more gracefully than contradiction does. They also keep the other party engaged and buy you a moment to organize your own thinking. Be sure to only ask one question at a time, allow time for the answer, and get comfortable with silence. If you are ever unsure what question to ask, a good fallback is: "Could you tell me more about that?"
Avoid quick counterproposals. When you answer a proposal instantly with a counterproposal of your own, you introduce new issues at the exact moment the other side is least able to absorb them. Additionally, they will likely conclude that you were not really listening to or considering their proposal.
Share inner thoughts commentary. This one feels risky and is often the most useful tool in the room. Say out loud what is going on in your mind — your read on the situation, how you are feeling about a subject, what is motivating you. For example, "I am worried we are very far apart on the price we can pay" cloaks disagreement in a frame that is more likely to lead to productive conversation than shut down the conversation entirely. Naming your motives makes them appear transparent, which builds trust, holds attention, and encourages reciprocity.
Stay focused on your goal. Stick to your plan instead of reacting to theirs, and do not take the bait when it is offered. Conflict makes negotiators emotionally heated; heat produces value-loaded language; attack invites defense, which is read as counterattack, and the spiral tightens. Bullying and bluffing waste time. Credibility, built by being reasonable and realistic, is what produces agreements.
Be patient. Remain unflappable and resist the illusion of urgency.
The Part Worth Remembering
The keys to getting the most out of any negotiation are preparation and discipline. In other words, do the analytical work before the negotiation starts, and then resist the knee jerk reactions that surface once it does.
