Negotiations 101: Prepare, Prepare, Prepare!

I still recall bits and pieces of the first negotiation I did as a lawyer more than 30 years ago. I was a new lawyer in a firm that specialized in maritime law, a subject area which seemed to suit me, as I had sailed in the merchant marine and was well acquainted with ships and things nautical. One of the firm’s clients was a tugboat owner who found himself in need of a barge for an upcoming commercial venture. And so it happened that, one Friday afternoon, one of the firm’s partners stepped into my office, handed me a draft of a barge charter agreement and told me to “get the deal done”. This was to be my first negotiation as a lawyer.

The following day I met the client for the first time and accompanied him to the other end of town where we met the barge owner and his lawyer. I did my best to look confident despite my lack of experience or preparation for this exercise. As I recall, my client was also new to the experience of negotiating such an agreement, and he indicated that he was inclined to rely on my ‘experience’ in that regard. We spent most of the day bargaining the terms of a vessel charter agreement I had read for the first time only the day before. Lucky for me, the other lawyer, while an experienced transactional attorney, knew about as much about boats as I did about negotiating. At the end of the day, we had a deal.

I have long since learned from experience that preparation is an essential element of any successful negotiation. Preparation begins with setting goals for the negotiation; that is, determining what you want to achieve in the impending negotiation. Closely related to goal setting is identifying the particular interests at stake in the negotiation; i.e., the reasons why the deal is important to you. As your preparation intensifies, you should begin anticipating the issues you expect to arise in the course of the negotiation and how each issue relates to the interests you have identified. An often neglected component of negotiation preparation is establishing what you and/or your client will do if you cannot reach an agreement with the other side. Of course, this degree of preparation requires time, which may sometimes be in short supply, as it was for me that day long ago.

If pressed for time, however, you should focus what little preparation time you’ve been given by examining the following two questions:

If we could have everything we want in this negotiation, what would we desire in the final agreement?

If everything goes against us in this negotiation, what would be the very least we would accept to conclude an agreement?

I suggest that thoughtful consideration of those questions will help you focus your goal-setting, and assist you in establishing in your own mind their relative priorities, perhaps in the following categories:

Deal Points: These are the essential elements you must achieve from the negotiation, or there is no reason to proceed with the negotiation. They are likely to be few in number, but they are the highest priority.

Secondary points: While important, these are not necessarily vital, and can be compromised if necessary to obtain a deal point.

Trade Points: Everything else; these are low priority and will not play a substantive role, at least not from your client’s perspective. What makes them important is that they may be of value to other side and can serve as concessions.

Preparation in advance of your negotiation process will increase the likelihood of achieving your goals and will help you to begin thinking strategically about the negotiation process. If you are negotiating on behalf of a client, this preparation will also help to ensure that you and your client are on the same page as to the specific interests it seeks to advance by an agreement with the other party.

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