Editorial
Front Page - Friday, July 2, 2010
Under Analysis
Let’s make an even better deal
Michelle St. Germain
With my husband’s birthday coming up, I have gotten plenty of hints that this year socks are not going to cut it.? Maybe another tie? – no – apparently, ties are on the black list too.? So when my friend James mentioned he had a bike and was looking to sell it, I told him to hold that thought.? It would be win-win for James and for me; he gets rid of something he does not want, and I get credit for a birthday gift more thoughtful than socks or ties.
I did not realize it at the time, but I started my usual negotiation process.? The lawyer in our heads never shuts off, does it?? I think negotiation is one of the greatest skills a lawyer can have, and one of the most often exercised.? My alma mater emphasized the so-called “soft” skill of negotiation.? It was emphasized for good reason because good negotiation is not always easy to recognize, but when it’s good, it’s extraordinarily powerful.?? It’s also fun: instead of the stuffiness of being in front of a judge or on the record, you can just talk to another lawyer.? Normally lawyers on all sides are friendly (perhaps because everyone thinks they have something to gain) and for once, you are working together.
Like I said, I unknowingly put on my lawyer-negotiator hat in the bike situation even though the transaction was going to be friendly.? The first step I usually take in negotiation is research.? In this case, I researched the bike my friend owned to find out what the going price was.? Next, I researched my funds.? (Yes, just as I suspected, it was full.? Full of dust bunnies and tumbleweed.)?? At this point I would normally check my opponent’s interest such as checking the insurance policy limits, but in the bike scenario, I skipped this step.? For unknown reasons, James would not give up his bank account information.
To prepare for negotiation, I would check in with my client and get a feel for what their expectations are.? Practically speaking, I never felt like I was doing research during this step, but guarding against unreasonable expectations.?
Sure enough, my husband is a lot like a client and wanted a lot more than tumbleweed and dust bunnies could buy.? Just like a client, I ignored that and proceeded with changing his mind about what he wanted.
The next step is considering my reservation point.? The reservation point, for the buyer, is the very top amount that I would pay.? During the negotiation, you want to know what your reservation point is so that the outcome is favorable, but you don’t want the opposing party to know your reservation point.?? Giving away your reservation point is like playing poker with your cards face up on the table.? If you reveal your reservation point to the opposing party, the opposing party will pounce on it--assuming it is acceptable--and won’t (and shouldn’t) accept anything else.
Prior to negotiation, you should also think about your “BATNA” or Best Alternative To a Negotiated Agreement.? The BATNA was conceived by Roger Fischer and William Ury, the authors of “Getting to Yes.”???
A BATNA is what course of action you would take if the negotiation does not work out.? Most often in litigation, the BATNA is trying the case.? But it could also be suing someone else, adding counts to the petition, or, Spencer Farris’ personal favorite, commencing operation: “Be a Complete Pain in the Neck for the duration of the case.”?
The BATNA, as opposed to the reservation point, is a potential gun to bring out during negotiation.?? Before you decide to bring it out though, you should think it through very carefully, or you might be exposing a weakness in your bargaining position.? Not only should you be careful before making the other side aware of your BATNA, but your BATNA should be rock solid.? If you don’t have a good BATNA, and the other side finds out about it, the bargaining power shifts to the other side.
I had thought through my bargaining advantages before I negotiated about the bike with James.? If negotiation is about slicing a pie, then my job is to make the other side think he or she has a smaller slice than he or she thinks; and to make him or her think my slice is bigger than he or she previously thought.? I was mentally armed with the problems of the bike to justify a good price.? On the other hand, I knew I couldn’t pull a “Charlie Kramer” and low-ball my friend.
Walking to work with my friend one morning, I broached the subject and suggested a price since the bike was a “make offer” situation.? James’ response to my offer was a negotiating strategy I have never come across in my negotiation experience.? I’ve looked through the negotiation tactics to see if there is a name for it and I can’t even find one.
He counter-offered a price lower than I offered.
I protested (weakly), and he asked me whether his counter-offer was fair.? A deal was made.
Just so no one’s ever afraid to use this tactic when negotiating with me in the future, I thought it would only be fair to give it a name.? How about the “St. Germain surprise?”
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