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.

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