Notes on Negotiations
By Marty Latz, Latz Negotiation Institute
“He’s hired me to represent him in these negotiations. But he’s holding out and not telling me everything. It’s like he’s negotiating with me – yet we are on the same side. And the result is counterproductive for both of us. What should I do?”
Lawyers, investment bankers and other agents negotiating on behalf of others face similar situations frequently. And it is almost always a lose-lose proposition. Here are some suggestions if you are the lawyer, agent, or client.
Effective strategies require openness within the team.
Clients who hold their cards close to their vest even with their teammates – especially if they have hired those teammates/lawyers/agents as their designated professional negotiators – are tying their representatives’ hands behind their backs.
Years ago a 45-year-old seller told me he wanted to sell to a private equity group that could grow his company to a much greater degree than he could. He also said he really enjoyed being in his business and had no interest in cutting back upon selling.
Critically, possible buyers needed him actively involved due to his substantive expertise, industry relationships, and because the company was branded to him personally.
In negotiating with a private equity group with a very attractive bid, I communicated my client’s interest in staying involved. They took this to heart and offered a big chunk in cash upfront plus a much greater amount if the business hit certain milestones – milestones it would not likely hit without my client’s participation.
My client, unfortunately, asked me to push back hard and request a lot more upfront with less due upon hitting the milestones. Although I thought we could reasonably request a bit more upfront, I told him pushing back too hard on the cash portion would send the wrong message – that he just wanted to get out early and/or he really wasn’t confident about the business’ long-term prospects.
He insisted we push back super hard, so we did. The potential buyer then got cold feet and walked away from the deal. I later heard my client had withheld from me critical information regarding his goals and interests in selling.
Credible, trusting relationships overcome these challenges.
Lawyers and agents with long-lasting, credible and trusting relationships with their clients rarely face these problems. Why? These clients are much more comfortable sharing their true needs, interests and strategies with their trusted advisors.
How can you develop such relationships? Several years ago I wrote a column on this subject based on a book I recommended called “The Trusted Advisor” (find it at www.NegotiationInstitute.com). Here is a summary of those recommendations:
- Actively engage with your client from the start.
- Truly and deeply listen to their needs and concerns.
- Frame their needs so they know how well you understand them.
- Envision what success looks like for them.
- Get a realistic commitment from them to take the steps necessary to achieve their goals.
Mutually develop written Strategic Negotiation Plans.
Clients often just do not know what negotiation-related information to share with their agents and so might inadvertently fail to disclose highly relevant and crucial negotiation intelligence. And many agents might fail to ask their clients the right questions or probe deeply enough to get to their true needs and interests and to find out other critical negotiation elements.
The solution: Brainstorm together to develop a written Strategic Negotiation Plan that ensures you address the critical strategies recommended by the experts’ proven research.
Although this won’t guarantee transparency between teammates, it will increase the likelihood that you will fill in strategic gaps that might otherwise remain open. Plus, brainstorming at this level is often fun.
That will also help develop that trusting relationship.
Want to Learn more from Marty Latz? He will be here November 21.
Gain The Edge: Negotiation Strategies for Lawyers
6 CLE / 6 CME / 1 E – November 21, 2014 9:00 A.M. – 4:30 P.M.
LIVE IN-PERSON SEMINAR ONLY!
– ICLEF Conference Facility, Indianapolis
Marty Latz is the founder of Latz Negotiation Institute, a national negotiation training and consulting company, and ExpertNegotiator, a Web-based software company that helps managers and negotiators more effectively negotiate and implement best practices based on the experts’ proven research. He is also the author of Gain the Edge! Negotiating to Get What You Want (St. Martin’s Press 2004). He can be reached at 480-951-3222 or Latz@ExpertNegotiator.com