Expert legal advice and strategic guidance.

Home > Articles & News > We Are All Negotiators by Paul M. DiPietro

Articles & News

We Are All Negotiators by Paul M. DiPietro

When people think of negotiation tactics they usually think of two kinds. One, the "hard" approach of not budging from a position and making the other side come to you. Two, the "soft" approach of trying to play the "nice guy" in the hopes that the other side will meet you half way. Both of these tactics have their shortcomings. Hard negotiating lends itself to fighting over positions and trying to "win." It often fails to address underlying issues and can ruin future relationships (personal or business) with the other side. As any couple will tell you, the "my way or the highway" approach does not a lasting relationship make. The "soft" approach leas to too much concession and is generally ineffective against someone using the "hard" approach.

There is, however, a third alternative: "principled" negotiating. Principled negotiating focuses on the underlying interests and creating multiple and often creative options to reach those interests. Instead of a "me vs. you" approach, the parties should try to view themselves as allies trying to meet their collective needs and interests. It sounds nice, but does it actually work? It can and it does. Successful us of this approach depends on how you deal with four issues: people, interests, options, and objective criteria. 

People are the heart of every negotiation. Even if you are negotiating with a company, the person you are speaking to is still a person. The first thing to realize and accept is that people are emotional and often irrational, including yourself. The next step is to try to untangle the emotions from the problems and interests of the negotiation. Sometimes it helps to rant or blow off steam. Similarly, an apology can help address negative emotions and allow parties to focus on the central issues. The second step is proper communication. Try to listen and understand; do not just plan your counter arguments. Often repeating what was said can help build a repertoire as well as establish the other side's position. Also, avoid playing the "blame game." Rather rephrase things so that you are making assumptions about the other person. It always helps to treat people like people. If you can build trust, a friendship, then negotiations will always be more efficient and productive.

The purpose of any negotiation is for the parties to try and address some issue or interest. The key is to focus on the interest, not your position. For instance, if you want to evict a delinquent tenant, your primary interest is probably to remove the tenant and begin leasing it as soon as possible. Your position may be that the tenant owes you back rent, penalties, and other damages. If you focused only on your position, you may miss an opportunity to have the tenant leave months earlier than if you stand firm in your position. That does not mean, however, you abandon your interest. In fact, you should always stand firm on your interest, but be willing to find creative ways to obtain it. It may help to openly discuss what each party truly wants and have each confirm her understanding of the underlying interest. When making a demand, list your rationale and reasons first. In doing so, the other side will focus more on your reasoning instead of trying to just fight your demand.

For every negotiation, there is a final result. But how do you achieve that result? Far too often, people get cemented into only one option: "He pays me X or pay him Y." Even your local grocery store gives you more options than that. The store often offers coupons, buying on credit, extended warranties, reward programs, and sales to ensure that you will return as a loyal customer. So why limit yourself to one set of options? Sometimes the key to reaching a deal in a negotiation is a creative solution. Try brainstorming with other people, even the other side, on the different possible ways to address the underlying interests. Think of how different types of professionals might solve the problem, such as a banker or a CEO. When you are ready to make an offer, try to draft multiple options, look for previous agreements the other side has made in similar situations, and heavily criticize the offer yourself to ensure the other side will actually consider it. A creative solution can often overcome even the most deadlocked negotiations.

It helps when negotiating to be able to allude to objective standards. Is their position legal? In line with the market? Moral? The criteria should be legitimate, practical, reasonable, and fair. The can range from luck (flipping a coin), to the market (housing appraisals), to a third party arbitrator. In each case, the parties can point to an objective standard to base their offers on. If a car dealer demands an exorbitant price, it is helpful to refer to other sale prices for similar cars. If deciding on a movie, the wife may point out that the last four movies they saw were action movies. By using objective standards, it is harder for a party to rely on "hard" negotiating. Do not yield to their pressure. Instead, focus on the standards.

All of this sounds fine and dandy, but what about the real world? What about when you are negotiating with someone who is more powerful and in a much stronger position? The key is to be prepared. First, start with establishing your best alternative option if negotiating fails. It should not be hypothetical; you need to concretely know what your other option is. Thinking that you can find another job is not the same as already having another job offer. In some cases, this is easy. If you do not purchase the car from this dealer, you will go to another. If you do not rent this apartment, you will rent the other apartment a mile away. Other times, it is not as easy. No matter the case, it is important to establish what the best alternative is. If your best alternative is very good, disclose it to the other party. If it is weak, hide it. It is also good to know what their best alternative is. A vendor selling apples is more likely to find another customer than a vendor selling a rare collectible. By knowing your best alternative option and theirs, you better prepare and arm yourself for the negotiation.

It also helps to have a trip wire. Set an "alarm" for your negotiating, a benchmark, that if you find yourself offering, you will step away and take a break. It is easy to be caught up in a negotiation and you might lose track of how much you have been conceding or offering. So, go into the negotiation knowing that if you hit a certain point, you will take a break and rethink the situation.

Finally, use your assets wisely. Sometimes the best asset you have is simply walking away. Just because your are outgunned does not mean you cannot use the "guns" you have in a powerful, and meaningful way.

Negotiating is not always easy. Like any skill, it takes practice to perfect. With these guidelines, however, you have the foundation for developing into an effective negotiator.