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Negotiation Strategy: Going to the Balcony

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The balcony in negotiation is where to go to see the big pictureTake In The View From The Side Line

Lawyers and claims professionals evaluate a case and expect it to settle in a certain range.  They also expect the other side will act in a certain way on.  When the negotiation does not go as expected, we react.  The reaction is instinctive and emotional.  Hey, we’re human.

One of your strategies when the other side attacks you or your client or your case evaluation, can be to go to the balcony.

Bill Ury, in Getting Past No, expounded upon this strategy.  If you assume the negotiation is taking place on a theater stage, going to the balcony of the theater can give you a broader perspective of what’s really going on.  It has the following salutary effects:

  • It distances you from the fray.
  • It calms your reactive mind.
  • It allows you to slow down the negotiation.
  • It affords you time to name the game the other side is playing and decide how to react logically, as opposed to emotionally.

When negative emotions come up, and they will, take a deep breath.  Take a time out, either literally or figuratively.  Think it through.  As Ury says, “Keep your eye on the prize.”

Be proactive about emotions in negotiation.  They always surface—your client’s as well as yours.

We all know the slogan, “Don’t get angry, get even.”  In negotiation, it’s not about getting angry or getting even.  It’s about getting what your client wants, which is the most value from the negotiation.

Getting More in Your Negotiations

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Negotiate to get more

Getting More by Stuart Diamond

I just read a fabulous new book by Stuart Diamond, negotiation expert and professor at The Wharton Business School, called:  Getting More.  If you want to get more out of your negotiations, get Getting More today!

Professor Diamond outlines, and then explains, 12 negotiation strategies.  His rationales are likely to make “hard” bargainers second-guess strategies that may (or may not) have worked for them in the past.  At a minimum, adding these strategies to your skill set will broaden your negotiation worldview.

To give you a flavor of Professor Diamond’s thinking, here are the strategies in summary form:

  1. Goals are paramount.
  2. It’s about them.
  3. Make emotional payments.
  4. Every situation is different.
  5. Incremental is best.
  6. Trade things you value unequally.
  7. Find their standards.
  8. Be transparent and constructive, not manipulative.
  9. Always communicate, state the obvious, frame the vision.
  10. Find the real problem and make it an opportunity.
  11. Embrace differences.
  12. Prepare—make a list and practice with it.

Diamond uses a simple comparison to recommend his strategies:  “It’s the difference between saying ‘I play football’ and ‘I play professional football.’”

If you want to negotiate like a pro, buy the book.  Read the book.  Improve your negotiated outcomes.  And, be sure to let me know how it worked for you!

Want To Really Save Money In Mediation? Here’s The Secret: Practice Your Negotiations

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How Do Pro Football Players Get Better?  Practice!

I was lucky enough to move to San Francisco in the Bill Walsh-Joe Montana-Jerry Rice era.  The games were glorious.  Jerry Rice made a name for himself by putting as much effort into each practice as he did in each game.  It’s hard to argue with success.

What’s true in sports is true in negotiation.  The more you practice negotiating, the better negotiator you will be.  Fortunately, there are opportunities everywhere.

We tend to accept the stated price of goods and services as non-negotiable.  But think about it:  merchants are hurting.  A merchant is more likely to negotiate to make a sale than to let a sale get away. Some money is better than no money.

You Can Negotiate Anywhere

Recently I needed a smog inspection for my car. Many gas stations are certified for smog inspections, but the fee they charge varies from station to station. I first drove to the station nearest my house. The stated price was $69, plus $8 for the certificate. I asked the owner (in a curious voice) “How is it that a station two miles away is charging $35 for the same service?” He replied that he had better trained mechanics and that therefore his cost of labor was higher. I shrugged my shoulders and got back in my car.

I then drove directly across the street, where the stated price was $65, plus $8 for the certificate. (Hooray, I’m already ahead!) “How is it,” I asked, “that a station two miles away is charging $35 an hour for the same service?” The clerk shrugged his shoulders. I turned to leave, stopped on the doorsill, then turned back to ask, “Would you do it for $50 flat?” He checked with the owner: “Fifty plus $8 for the certificate.” Deal. When I negotiate, I like to leave the other side with a face saving gesture, so I accepted his counter. That way, he got to feel he negotiated, too.

(In the drive from one station to the other, I realized that I really didn’t want to drive two miles away and wait 90 minute in an unfamiliar coffee shop, when I could walk to my house from station #2, and work at home while my car was being serviced.)

My bottom line: station #2 was closer to my home. It served my interests. And I saved $19 (almost 30%) from where I started.

Practice negotiating and keep track of how you do.  Not only will you see a difference in your own wallet, you’ll get some better settlements at work, too.

Where Have You Practiced Negotiating?

Don’t Go Into Mediation Cold: Settlement Requires A Game Plan

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It’s Football Season: Break Out The “X’s” and “O’s” And Prepare

Ninety-eight percent of all lawsuits do not go to trial. The vast majority of those are settled.

It’s time to get more pro-active with your retained counsel to prepare adequately for settlement.

As a lawyer trying cases, I would spend at least a week in 12 hour/day trial prep mode for a three-week trial. Then I’d work between 14 and 16 hours a day during trial. (OK, maybe only 10 hours on Sundays.)

Preparing for mediation? Not so much. I’m not sure what it is about lawyers who gravitate toward litigation, but it seems as if we think we already know how to negotiate. (Unfortunately, I’ve suffered from that same hubris myself.)

I regularly give seminars to lawyers about mediation and negotiation and ask how many of them took a formal negotiation class in law school. The average, over a wide pool in many different states, is less than 15%.

Leigh Thompson, a professor at the Kellogg business school at Northwestern, says, “Excellent negotiators do not rely on intuition; rather, they are deliberate planners.”

A week or so before your next mediation or settlement conference, ask your counsel what his/her plan is for the negotiation. Expect a long pause, or an answer like, “My plan is to start really low and go up r e a l l y, r e a l l y slowly.”

Tell your counsel you want to pay them to be thorough and think creatively about the settlement negotiations. Ask them to send you their mediation game plan. It should include a plan of disclosures and a plan of concessions. You might not stick to it religiously, and of course you will modify it as circumstances dictate, but it will be a guide and it will significantly reduce reactivity and negative emotions which can get in the way of settling those cases you don’t want to try webbanki.ru.

2 Approaches To Early Resolution And Cost Savings For Litigation Guidelines

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Let’s State The Obvious: Early Mediation Can Lead to Lower Costs of Defense

Most insurance and claims adjusting companies have Defense Counsel Guidelines.  I’ve seen many of them.  It’s hard to remember, though, seeing one in which a contingency plan for early settlement was addressed.

Most guidelines I’ve seen are focused on having a case evaluated for settlement at 6 months.  By that time, your defense counsel will have interviewed the client, propounded initial discovery, received and reviewed the medical records and taken the plaintiff(s)’ deposition(s).

Perhaps you could reduce your ALAE significantly by including early mediation in your guidelines. (Transparency caveat:  I’m a mediator and I have a bias.  I mediate cases nationwide.)

2 Ways To Include Mediation In Attorney Guidelines

Here are two suggestions.  One is fast-tracking that process to 3 months.  The second is requiring your lawyer to approach plaintiff’s counsel about mediation within the first 6 months.

  • Fast tracking settlement.  In three months, it’s unlikely you’ll be able to get all of the medical records and receive responses to discovery and take the plaintiff’s deposition.  Ask yourself, though, if you really need all of that information to settle the case.  In some cases, particularly cases of clear liability, the answer is:  probably not.  Yes, you may settle some cases for a little more than having all of the usual discovery would suggest.  On the other hand, plaintiff’s counsel may be willing to take less money in return for not having to work the case up.  You will also be saving attorneys’ fees and litigation costs and closing files.
  • Mediation date within 6 months. There seems to be an institutional bias against the defense being the first side to suggest a mediation.  The underlying fear is that plaintiff or her counsel will conclude your case is weak and their settlement aspirations will zoom skyward and their bargaining posture will harden.  Do you have any data to support that bias?  I haven’t seen any.  Try it out, then calculate your overall savings.

I applaud all sides when they come to me to mediate a case either pre-suit or very early on in the litigation.  I try to set the expectation that the exploration of settlement at an early stage is an opportunity for both sides to be realistic, not only about the value of the case, but also about saving litigation costs.