Vol. 77, No. 11, November
The Five Golden Rules of Negotiation for Lawyers
Lawyers negotiate constantly, but few lawyers have learned the
strategies and techniques of effective negotiation. Here are five golden
rules of negotiation to increase your ability to get what you and your
by Marty Latz
Marty Latz is president of Latz
Negotiation Institute, a national negotiation training and consulting
firm based in Phoenix. His book, Gain the Edge! Negotiating to Get What
You Want, can be ordered at GainTheEdge.com. Contact Latz at (480)
951-3222 or at Latz@Negotiation-Institute.com.
Let's say you're sitting at your desk Monday morning, your telephone
rings, and it's Jane, opposing counsel in one of your cases, calling to
see if you might be interested in discussing the offer she emailed you
last week. Because you're mostly up-to-speed on it, you jump right
What just happened? You - like thousands of lawyers in countless
negotiations every day - just made a common negotiation mistake even the
most experienced lawyers consistently make. Who has the advantage here?
Jane. Why? You agreed to speak with Jane before you had strategically
Here's what you should have said: "I'm right in the middle of
something. Can I get back with you shortly?" Then you should have
The fact is, lawyers negotiate constantly. Whether you're trying to
settle a lawsuit or attempting to close a merger, you're negotiating.
Yet relatively few lawyers have ever learned the strategies and
techniques of effective negotiation. Instead, most lawyers negotiate
instinctively or intuitively. It's natural. It also can be
To avoid this mistake and others - and to strategically negotiate and
thus increase your ability to get what you and your clients want -
follow my Five Golden Rules of Negotiation.
1) Information is Power - So Get It!
Self-described "expert" lawyer-negotiators often enter negotiations
with arguments intended to persuade the other side of the legitimacy of
their positions. Unknowingly, they're giving up power from the first
time they open their mouths. Negotiation power goes to those who listen
and learn. It's thus critical to ask questions and get as much relevant
information as you can throughout the negotiation process. With
information in your pocket, you have power. Without it, you'll be
Effective lawyer-negotiators know this well. Instead of trying to
convince the other side of the strength of their case or why the other
side should agree to the merger, they start by getting information. How?
By building rapport, developing relationships, asking questions
(especially open-ended ones like what, how, and why), finding out their
counterparts' negotiation reputations, and probing their and the other
sides' fundamental goals, needs, interests, and options.
2) Maximize Your Leverage
How much does your client want or need that deal or settlement, and
how much does your client's counterpart need it? What are your and their
clients' alternatives if an agreement is not reached? What can you and
your client do to strengthen your leverage? What might your counterparts
be doing? Finding the answers to these leverage questions can be the key
to success. Ignoring them can be a recipe for failure.
Maximizing leverage can be especially challenging for litigators.
Why? They must, in effect, simultaneously send two seemingly
On the one hand, they should convey to opposing counsel that they are
ready, willing, and able to take the case all the way through trial.
After all, most litigators' best alternative to settling the case - a
critical element of leverage - is trying it. And the higher the
likelihood of their winning at trial, the stronger their negotiation
Yet more than 95 percent of litigation matters settle. So litigators
also must signal an interest in settling. But the more they signal an
interest in settling (and thus not trying their case), the weaker their
So how can litigators credibly send both signals? Pursue each on
parallel tracks in the following way. On the litigation track, always
push forward to trial in an appropriately aggressive fashion. On the
settlement track, get the other side to initiate the process (thus
signaling their relatively strong interest in settling) or suggest that
it's your policy in all your cases to discuss settlement at that stage
of the matter (signaling that you do it then in your strong and weak
cases, and avoid sending the "We're interested in settling because we
have a weak case" message).
3) Employ "Fair" Objective Criteria
The quest for fairness and the perception of fairness are key
elements in many legal negotiations. Fairness, in most instances, boils
down to a matter of relatively objective standards, like market value,
precedent, efficiency, or expert opinion. If both sides can agree on a
fair and reasonable standard, many negotiations will be successful. If
not, it's far more difficult to reach agreement.
For transactional lawyers, standards can play an especially crucial
role. Why? Because many transactions involve parties with future
relationships and standards can provide an independent and objective
view of the issues. This can depersonalize the negotiation and help
preserve their relationships.
"The reason my client's purchase price and terms are fair and
reasonable," you might suggest, "is because they are in line with the
market and they are the equivalent of what it paid last year for a
similar company, factoring in inflation and the unique elements of your
client's business." Or, "It's standard in the industry for the losing
party to pay attorney fees if a future dispute goes to arbitration."
Focus on standards. While applicable also for litigators (critical
standards include jury verdict research, expert opinions, and
precedent), it can be an especially powerful move in many transactional
contexts. And it will give you credibility and help keep that "fair and
reasonable" hat on your head - a critical factor in many legal
4) Design an Offer-Concession Strategy
No one wants to leave valuable items on the table gratuitously. The
best way to avoid this is to design the right offer-concession strategy.
Doing this will require you to understand the psychological dynamics
underlying concession behavior, as well as improve your ability to
evaluate your counterpart's "flinch" point. It's not an exact science,
but you can learn to draw out and recognize certain signals that will
give you the edge in your negotiations.
A crucial offer-concession element in the legal arena involves making
sure your counterpart walks away feeling like he or she achieved a good
deal. How can you make sure of this?
Build in sufficient "room to move" with your offers so your
counterpart will feel like she received a decent result. How often have
you left a negotiation feeling you achieved a good deal based on how far
you were able to get the other side to move? "I know we negotiated a
great deal when we settled that lawsuit," you might say, "because John
increased his offer by $100,000 and we only moved down $35,000." This is
So don't just start at one point and refuse to move. Instead, start
more aggressively and make some significant moves. Provide your
counterpart with the ability to walk away feeling like he negotiated a
5) Control the Agenda
Effectively managing the negotiation process - overtly or covertly -
is one of the most challenging elements in striking the perfect deal or
settlement, even for the most expert negotiators. Understanding when to
use deadlines, how to effectively operate within them, and the
psychological tendencies underlying deadlines will give you a leg up in
Controlling the agenda can make or break your negotiation. Early in
my career, I set up an appointment for an hour with a prospective client
and arrived promptly at our scheduled time. She kept me waiting for 30
minutes and then escorted me to a conference room where she told me she
was running late and that I had 15 minutes to explain what I could
provide to her and what was my fee. "Cut to the chase," she told me.
I did. And it was a mistake. I should have said, "Wait a second.
Before we discuss my fee, why don't you tell me what you want, why and
how you think we might be able to help each other? Then we can discuss
the value I add, which provides the basis for my fee. And if we run out
of time, I'll be happy to come back or put together a written proposal
for you based on your needs, what we've discussed, and include my
In short, control the agenda. And if your counterpart tries to
control the agenda, negotiate it. Not in an overly aggressive way. But
in a way that satisfies both parties' interests.
Experienced lawyers often tell me they wish they had been exposed to
the strategic elements of the negotiation process earlier in their
careers. "Just think of the difference it could have made," they say. My
response? "Experience does not equal expertise in negotiations. It's
never too late to learn and improve." Remember that before your next