Category Archives: Negotiating

The “Manly” Lawyer Loses?

The ABA Journal has the news: social science researchers have parsed the data and concluded that oral advocates exhibiting more “manly” speaking styles are likelier to lose, while those displaying more confidence in tone are likelier to lose. A few random observations:

  • The data is based on 200 researchers (sourced via Mechanical Turk) listening to recordings of 60 lawyers making the 8-word intro (“Mister Chief Justice, may it please the court”) at the beginning of oral argument before the Supreme Court. Hold your jokes about analytical rigor and the social sciences.
  • There’s a big correlation/causation issue here. More confident-sounding speakers may well sound that way because they’ve got the better case and they know it.  Even lawyers (who aren’t even social scientists) can build an algorithm that can predict Supreme Court decisions with over 70% accuracy. And you can be damn sure the lawyers working in the trenches on these cases know whether they are on the inside track or slogging messily uphill.
  • I suspect that oral argument at the Supreme Court is more a matter of kabuki theater and ego-burnishing than it is likely to make difference in the case one way or the other. I mean, I’d do it in a heartbeat if I had the opportunity, but I wouldn’t harbor any illusions that my oral advocacy would matter nearly as much as the briefing (to say nothing of the existing predispositions of the justices).
  • Finally, the “manliness” point: I suspect that “manliness” in this context is roughly synonymous with “aggressiveness.” Aggressiveness is a quality many attorneys pride themselves on – and even advertise on the basis of – but in my experience extremes of aggressiveness in representation are usually counter-productive. Other people don’t find such displays attractive, so they only work if they succeed in intimidating the other side. For good advocates, overt aggression is a tactic of last resort.

And so we’re back to correlation and causation – the “manly” advocates may show up on the losing side more often simply because these attorneys knew they were facing an uphill fight and employed, consciously or not, their worst-case approach.

Unfortunately, while aggression is a low-percentage tactic even when negotiating or arguing in general, it got to be singularly unhelpful when arguing before the Supreme Court.

h/t Lawyerist

Ultimatums and Bluffs

Ultimatums can have their place in any negotiation, but they are best used sparingly and with care. And while I’ve gotten the best results by being quite direct in negotiations, being too direct – throwing down an ultimatum – raises a significant risk that your discussions will come to an abrupt end.

Which means, of course, that you should be OK with that outcome if you make an ultimatum.  “My way or the highway,” as they say – and if the other side opts for “highway,” that’s fine.

The corollary to this principle is that it is a mistake to bluff when making ultimatums. The reason is simple: if you make an ultimatum, and then walk it back when the other side resists, you’ve cost yourself a massive amount of negotiating credibility.  It makes the other side wonder why they should believe anything you say, making it doubly hard to get what you need in the deal. 1

Unfortunately, I regularly experience firsthand attorneys violating this principle with their own particular brand of ultimatum: the lawsuit threat.

It’s kind of depressing that attorneys reach for this little trick so reflexively. But I suppose to some, if you’ve got that hammer, everything starts looking like a nail. And it must work at least some of the time, at least when dealing with power imbalances or inexperienced negotiators.

But the problem with the lawsuit threat is the same problem of any ultimatum: if you don’t intend to follow through with it, and the other side isn’t impressed with your threat, you’ve got nothing left to do but slink away.

Maybe that’s OK for some attorneys, but in a profession where reputation is so important, it feels awfully cheap to me to just throw one’s credibility around. And there’s a related problem as well, as lawyer (and Harvard business school professor) Ben Edelman just found out: that your threats will reveal, via the magic of social media, what an insufferable tool you really are.

All of this is why most savvy attorneys rarely make lawsuit threats – they just file.  Or they only make a threat when their client is ready to pull the trigger on a lawsuit.  2

So back to the question: why would an attorney threaten a lawsuit he or she had no intention of bringing? Maybe because they feel like they have leverage over a small business, which has heard the tale of the lawyer suing for $10 million over a dry cleaning mistake.  Or because they feel they can browbeat or intimidate a low-level employee pr small business owner into getting their way (Harvard prof Edelman is obviously big on this tactic).

Not that any of that is right, but at least I can understand the logic.

But why would a lawyer make a threat like this to me?  It takes less than minute to look my background up, see that I may know a few things about media law and negotiating, and realize that the ol’ lawsuit threat bluff isn’t going to work.

Why would they make it to a restaurant owner with a large social media following, who can effectively embarrass them on a national stage?

It should occur to them that their target may turn the tables on them, and make their demands look like the churlish “standing on rights” that they typically are.

Yet lawyers continue to do this, over and over again. 3 It’s just appalling how little work goes into thinking through the efficacy of rolling out the lawsuit threat.  Believe it or not, many businesses don’t quake in fear at the thought of being sued. Many of us will just tell you to get lost – or if you really piss us off, we will make you pay, both reputationally and in actual dollars.

So lawyers, trust me – the “tool” of clearly explaining your position and asking politely for something reasonable? That’s a hell of a lot more effective than threatening to sue.

And it’s certainly a lot less likely to end up with you at the center of an epic media shitstorm.

Notes:

  1. This is also why bluffs work when playing poker. You actually want your bluffs to be called occasionally precisely because you don’t want credibility – predictability – at the poker table.
  2. On exactly one occasion in my legal career did I threaten a lawsuit I didn’t intend to follow through with. I still cringe thinking of it. And no, of course my bluff didn’t work.
  3. OK, and non-lawyers, too – witness the buffoonery of clown-troll Charles Johnson’s many lawsuit threats.

Ethics in Negotiation

When I first started blogging, I was exclusively doing mergers and acquisitions work, and a frequent topic for my posts was the ins and outs of negotiations.

A recent kerfuffle in the legal marketing world has raised an issue I haven’t addressed before – what are the acceptable limits of veracity in negotiation?  Or to put a sharper point on it, to what extent is it acceptable to lie to counterparties when negotiating?

Mirriam-Webster defines a lie as to “make an untrue statement with intent to deceive” or “to create a false or misleading impression.” This covers both affirmative lies and lies of omission.

And here’s the thing: anyone with the least experience negotiating knows that there are plenty of lies that are acceptable in the negotiating process.  It’s routine for parties to attempt to create a false impression of their level of interest in a deal, their bottom-line terms, or their feelings about their counterparties.   Many are the occasions when I’ve overstated my leverage, feigned indifference, and laughed at jokes that fall flat.

But I’ve always drawn the line at making shit up.

The reason it’s acceptable to  misrepresent one’s underlying motivation or feelings is that, fundamentally, motivations and feelings aren’t facts. They are fluid conditions, subject to change. They can shift based on any number of internal or external factors – including the persuasive powers of the person on the other side of the negotiation.

For example: if you ask “how much EBITDA did your company earn last year?”  your question seeks data that is fixed, and you expect a straightforward answer.   But asking “what’s the lowest price you’d sell your company for?”  The answer to that question isn’t fixed – even if your counterparty gives you the most transparent answer they can at the time, the “real” answer can – and probably will – change.  But because it’s not fixed – and it may not even be properly definable, given the fluidity involved – negotiators know that it is neither helpful nor required that they try at every turn to be completely transparent about their motivations.

So this is where people get hung up: they conflate this acceptable obfuscation of feelings, motivations and positions with the unacceptable invention of things that aren’t true.

There is a big difference between feigning a lack of interest in an offer and materially misrepresenting your operating results or professional background. Letting these lines get blurry – letting the facts get blurry – can make for a quick trip to a negotiator’s reputational ruin.

Negotiating for Dummies (Ph.D Version)

This Slate story, about a candidate for a philosophy professorship who had her job offer rescinded, attempts to make the point that academic institutions are cavalierly running roughshod over job candidates. Or as the article’s lead-in states, to gain entry to the academy, “it’s not ‘lean in’ so much as ‘bend over.'”

It’s very likely the case that institutions wield disproportionate power over candidates; tenure-track jobs in philosophy departments have always been a buyer’s market.

But so what? The interesting thing about this story isn’t Nazareth College’s decision to rescind the offer as it is the ignorance of a highly-educated professional to understand how negotiations work.  Here are a few lessons other job-seeking academics can take from this sorry tale:

It’s All a Negotiation

The eponymous “W” made her first mistake in thinking negotiation is some separate part of the job seeking process. Apparently she told the school, upon getting the offer, that she was going into “negotiation mode.” Say what? The whole process of seeking a job is one big negotiation. Sure, the brass tacks come at the end. But it’s a package of relationship-building and dialogue. You can’t think that you can abruptly shift that all aside at the end.  Any list of asks communicates something about you to the other side.  In sensitive or emotional negotiations, the wrong asks – or asks at the wrong time – can blow the whole deal.

Did W have any understanding of this dynamic?  Nope:

“This is how I thought negotiating worked, how I learned to do it, and, for that matter, how I think it should work: You ask about a number of perks and maybe get some of them. I was expecting to get very few of the perks I asked about, if anything … I just thought there was no harm in asking.”

There are plenty of times where “there is no harm in asking.”  And there are plenty of things that you can ask for that won’t cause any harm.  But ask for big things, at the wrong time, and you may well bring the negotiation to a screeching halt.

Preparation

You can’t really get a sense for where the sensitivities lie unless you’ve taken the time to figure out and account for what’s important to your counterparty.  And here W’s fatal error is obvious.

Nazareth College is a small liberal arts school.  It is, as W’s rejection letter noted, “teaching and student focused.”  Yet 4 out of 5 of W’s asks were for things that would reduce her time in the classroom: special maternity leave, a guaranteed sabbatical, a delayed start date, and a reduced maximum course load for her first few years.  This set of asks sends a powerfully negative message about W’s commitment to teaching and student life.

What’s more, two of these asks also raise additional problems.  Asking in advance for a semester off for maternity leave comes off as naive and entitled (as institutions have existing policies for maternity leave).  And I suspect that asking to delay the start date for a year came off as “retrading” – the bringing up of an issue at the 11th hour that the other party thought settled.  Retrading has been death to many a negotiation, and experienced negotiators know to avoid it at all costs.  There had likely been discussions about the need to fill the role, the timing, etc.  If this was the first time the school had heard that W wanted to delay her start, that would be offputting indeed.

Know Your Leverage

Besides knowing what’s important to the other party, you’ve got to know how much negotiating leverage you’ve got. Leverage determines how much you can ask for, and how hard you can press for those things.  What a superstar, experienced professor can ask for is worlds apart from what a first-timer like W can expect.  About the only leverage a first-timer has is inertia – the fact that the candidate selection process is long and time-intensive, and the school may be reluctant to re-open it.  But this is a thin reed to rely on in a job search.  There may be another candidate who is a close second.  Or your selection may have been a narrow one, with factions of the department opposing it.  Objectivity about your attractiveness as a candidate is key; having friendly, collegial meetings and a job offer is not the same as being heavily in demand.

Don’t Overreach

Understanding the sensitivities of the other side and knowing your leverage will give you a good sense of what you can acceptably ask for.  Even the superstar professor can overreach and fatally offend the sensibilities of the institution; it’s just that such an individual has far more negotiating room than a newly-minted professor will.  It’s here that W got it so wrong – you can’t just assume that “there’s no harm in asking” for your wish list of perks.  With the prize so close to being in hand, she stumbled over this most basic of negotiating principles by badly overreaching.

So does this mean, as the Slate article suggests, that candidates for first-time academic positions are completely powerless and can’t negotiate?  Of course not; it just means they need to recognize the relative leverage of the parties and calibrate their negotiating strategy accordingly.

It’s almost never a good idea to “shoot for the moon” in any negotiation.  But it’s a particularly bad strategy when you’re in a low-leverage position.

h/t: Simple Justice

(Image: The Academy of Fine Arts (1578), from the J. Paul Getty Museum)

Sign on the Line that is Dotted?

So the other day I was at work, reviewing a contract. It was no big deal; a standard form agreement for a venue were renting to host an event in. I wouldn’t ordinarily spend more than a few minutes on such a thing – it’s a one-off deal, less than $20k in value, etc. Not worthy of anything more than a cursory legal review.

But it had a quirky clause that basically said that if anything happened to prevent our event from happening (including things in the venue’s control, or due to their systems, labor relations, etc) our only recourse was to reschedule. That doesn’t work very well you’re setting up an event with out-of-town visitors that must happen on a specific date.

No biggie; I sent the venue an email telling them to cross it out and replace it with a few sentences I quickly ginned up that gave us the right to find alternate arrangements if they couldn’t come through.

OK, they said.  But we need a legal addendum.

Fine, I said – just attach my email to the contract.  Done.

Oh, no, read the indigent email I got back.  We need a LEGAL DOCUMENT.

So I put my email into a document titled “Contract Addendum” and sent it back to them.

What a freaking waste of time and effort.

Because here’s the dirty little lawyerly secret (and in fact it’s so secret many lawyers don’t get it): almost anything can be a “legal document.” Outside of a handful of areas where written documentation is required by law (chiefly real estate transactions and estate planning documents), the relative levels of “legalese” and formality that go into a contract are driven entirely by evidentiary concerns, inertia and ass-covering.

Here’s what I mean: for most transactions, you could rely on a verbal agreement – the quintessential”handshake” deal. Why? Because many deals are simple and straightforward, and most of the time both parties will do what they said they were going to do.

The problem, of course, is that if any question arises about the terms of the deal, you haven’t got anything written down.

So you write it down. This is a critical step. In fact, I’d say that 80-90% of the value of a written contract is obtained by the simple step of writing down the basic terms of the deal. It could be on a cocktail napkin, in an email exchange, or via a simple document. Just having the basic terms on paper, clearly laid out, so anyone can refer to them if they have questions about the parameters of the deal.

Beyond this point is where the legal surplussage starts to kick in. Terms to address incredibly remote contingencies. Ritualistic signature requirements. All things to button up problems that could arise – but doing so in advance extracts a cost.

Like the inanity of asking for “wet” signatures. Requiring a signature at all is simply a method of creating evidence (which will most likely never be used) to prove that your counterparties actually agreed to the terms of the deal.  The bigger or more complex the deal (or the less you trust the other side), the more you want actual signatures.  But do you really need 4 original signatures?  Will a copied version not suffice?

If you don’t have a good answer to this question – and indeed, to the need for any provision in your contracts that may create friction, slow things down, or prevent a deal from being done – you need to ask whether that provision can be excised from the contract.

Too much legal process around routine deals is a bad business practice. Yes, having that belt and those suspenders may buy you some clarity in the once-in-a-blue-moon case where someone claims they didn’t agree to your deal, or where your double-secret indemnity provision comes into play. But this contingent benefit is bought, every time, at a very real cost: it erodes trust with your business partners.  It can crater deals.  And it can make it harder to win follow-on business.

Because after all, the relationship and the deal are what’s most important. And sometimes – hell, most times – a cocktail napkin approach is really all you need.

 

Negotiating with Crazy People

On my first blog, I wrote extensively about negotiating – things I’d found effective and ineffective in a career spent negotiating business deals.  One of last posts on Corporate Tool was during the debt limit crisis in 2011; it had to do with the difficulties of negotiating with crazy or completely unreasonable counterparties.

President Obama finds himself in that situation now, and he’s doing what I (and many others) wrote he should have done two years ago: refuse to negotiate.  He didn’t follow that advice, which is why he finds himself dealing with an escalated variety of crazy this go-round.

But here’s the thing: the hardest about dealing with crazy counterparties is figuring out that they are, in fact, crazy.  It’s a long road, particularly if you are reasonable sane, smart and objective yourself, to get to the point where the “these guys are batshit” lightbulb goes off. You want to believe they are reasonable.  That they get how cause and effect works.  That they understand the respective leverage each party holds.  That they want to get a positive outcome for their side.

It may take repeated interactions to get past these assumptions and realize that fear, nuttiness, personal agendas, or a clinical lack of objectiveness is driving their behavior.  And the longer it takes to get there, the more empowered they become.  Their demands become more outrageous.  They retrade. And heaven help you if you finally wrestle a deal to the ground, and then have to deal with them again.

The good news is that once you’ve figured out that you’re dealing with nutters, the negotiating strategy is straightforward: you don’t negotiate.  Anything.  Until they change out the team or demonstrate a newfound and durable commitment to sanity.

If anyone wonders why President Obama doesn’t give up, say, the 2.3% tax on medical devices, or a delay of the ACA individual mandate, in exchange for keeping the government funded, it’s because he’s finally figured out that he’s dealing with crazies in the House.  People who are engaging in a form of economic terrorism in an effort to get their way.  The answer to such tactics isn’t to sigh and give in – it’s to keep saying “no” until they come to their senses or the team is changed out.

Photo: Lexington, KY Historical Society (josh king)