When dealing with complex matters with another party, it can often be tempting to undertake negotiations yourself. After all, who knows the intricacies of your situation better than yourself? However, handling negotiations personally can often result in emotions taking over, with hotheaded decisions taking the fore.
If you are committed to securing the best outcome for yourself, it is crucial to enlist the aid of an experienced legal firm. Savvy lawyers handle negotiations every day, and are well-versed in the careful research, planning and management that goes into a negotiation that secure the best possible outcomes. Simply put, if your lawyer has executed multiple agreements, they will have amassed a range of negotiation tactics that are designed to maximise your outcome, and to protect you against risks you may never have considered.
Your lawyer will not be emotionally invested in the outcome, meaning they can bring a calm and assured approach to any negotiation on your behalf.
Get to know the opposition
An experienced lawyer will have done their research and formed an intimate understanding of the needs and interests of the other party and/or negotiator. They may discover that money is not the driving factor for the party, and other considerations may secure you a better deal. They may have had previously dealings with the other party, or have the necessary skills to build a personal rapport with that person that facilitates trust and better mutual understanding.
Take the first step
Your lawyer may also advise you to make the first offer. Although this may seem counterintuitive (as we are often told not to show our hand), studies have shown a significant advantage in making the initial offer. According to Harvard Law School’s program on negotiation:
“Opening offers have a strong effect on price negotiations. The first offer typically serves as an anchor that strongly influences the discussion that follows. In research documenting this price anchoring effect, psychologists Daniel Kahneman and Amos Tversky found that even random numbers can have a dramatic impact on people’s subsequent judgments and decisions.”
If you and your lawyer are confident that you have a comprehensive understanding of all aspects of the transaction, this can be an extremely strategic approach that sets the tone for further negotiations, thereby resulting in a more beneficial outcome.
Make strategic concessions
In the words of HBS professor, Deepak Malhotra, “Concessions are often necessary in negotiation. But they often go unappreciated and unreciprocated.” According to Malhotra, a properly-presented concession can result in incredible gains; however, certain strategies must be in place to ensure your concessions are fully appreciated.
- Labelling concessions
When it comes to negotiation, it is crucial to label the concession. In other words, your lawyer will make it known that the concession has been made at great cost to yourself, while highlighting the benefits to the other party.
On a psychological level, this creates what Malhotra calls a “strong social obligation to reciprocate”. Your concession will be seen as reasonable and serious, especially if you hold firm to the value of the concession.
- Demand reciprocity
The other party may try to avoid the social and moral obligation to reciprocate, in which case, your lawyer should diplomatically (but firmly) demand a reciprocal concession of some kind. In addition, they will define the form of reciprocity that should be returned, ensuring the exchange presents value to both parties.
- Contingent concessions
Similarly, your lawyer may advise contingent concessions. These are concessions that you make, only when the other party agrees to make a specific concession in exchange. The good thing about these situations is that they are almost always risk-free. They show the other party that you are willing to negotiate, but only on certain terms.
However, your lawyer should also advise you that taking this route may interfere with building trust with the other party. If every exchange is seen as a “tit for tat” measure, others may be less willing to negotiate to a mutually beneficial conclusion.
- Concessions in installments
According to research done by Stanford professor, Amos Tversky and Princeton professor Daniel Kahneman, humans prefer getting good news in installments. For example, if given a choice between receiving $100 today versus $10 per day for the next 10 days, most people will choose the second scenario.
Therefore, incremental concessions spread out over a period of time can actually be more successful. When you consider that most negotiators expect to go back and forth with offers several times, this method also positions you as a reasonable individual who is willing to negotiate. It suggests that you are flexible and willing to listen to the needs of the other party, thereby creating more goodwill.
Lastly, incremental concessions have multiple benefits from a practical standpoint. By taking things in steps rather than a single offer, you might find that you don’t need to make as large a concession as you originally thought. Furthermore, this will give you the opportunity to ask for reciprocity with each concession.
When it comes to any legal agreement, there are many complex factors to consider. By enlisting the expertise of a knowledgeable lawyer, you can rest easy knowing that they will negotiate the best possible outcome for you. The legal team at Atkinson Vinden have expert training in the art of successful negotiation. Get in touch with our team today to arrange a free consultation.