Put Yourself in the Shoes of Your Opponents
When business persons and lawyers prepare for bargaining interactions, they carefully determine the factors affecting their own side. What are the relevant factual, economic, legal, cultural, political, and similar issues? Once they obtain this information, they begin to develop their negotiation strategy. They initially explore their non-settlement options, and establish their bottom lines. How far would they be willing to move toward the other side before they walk away and accept their alternatives? They then have to establish their goals. This is a critical part of the preparation process, because there is a direct correlation between negotiator aspirations and bargaining outcomes. When multiple item interactions are involved, they must establish goals for each issue. While it is important to establish elevated aspirations, it is crucial to create goals that are realistic. If they are unreasonably elevated, the bargaining parties are unlikely to get within the settlement range and their efforts are likely to fail.
The final thing negotiators must decide is where they plan to begin their interactions. How high should they make their initial demands? Although some persons try to establish reasonable and fair opening positions, hoping to induce their opponents to respond in a similar manner, they naively ignore the significant impact of anchoring. When they present their reasonable opening offers, their opponents actually move psychologically away from them. They begin to think they will get better results than they originally thought, and they start with less generous opening offers than they had planned. I demonstrate this phenomenon to my Negotiation class students by handing out sheets describing a personal injury situation. It indicates that the students are to serve as defense counsel and asks them to answer two questions: (1) how much do they think their client will have to pay to resolve this claim and (2) what sum of money to they plan to articulate as their opening offers. What they do not know is that one half are told that the plaintiff's lawyer has just demanded $100,000, while the other half are told that the plaintiff's counsel demanded $50,000. The students facing the $100,000 demand expect to pay far more than the students facing the $50,000 demand, and they plan to begin with higher opening offers.
When individuals guide themselves through the preparation stage, they usually focus almost entirely on the circumstances affecting their own side. Proficient negotiators appreciate the fact that this only provides them with some of the relevant information. These adept bargainers appreciate the need to place themselves in the shoes of their opponents to enable them to explore the needs and interests of those parties. What are the relevant circumstances affecting those persons? How much do they need to achieve agreements? How high or low would they be likely to go before they think of accepting their non-settlement alternatives? What are the different items they are likely to desire, and what are the underlying interests reflected in those terms?
I can recall a perfect example of the need for negotiators to explore opponent interests from a bargaining interaction involving a close friend. He was representing a large corporation involved in a difficult bargaining interaction with another company. Their communications had been quite adversarial, and he was afraid they would be unable to achieve any agreement. He asked for my advice. After he explained the relevant factors affecting his side, I asked him what would happen to his client if it did not reach an accord with the other corporation. He replied that it would be bankrupt. I then asked him how bad that result would be. He was shocked by my seemingly ignorant inquiry, and reiterated the fact it would be bankrupt. I asked if his firm would be able to reorganize and survive, and he responded affirmatively. I then asked him what would happen to the other company if it failed to reach an agreement with his firm. He said that he had no idea. When I asked him to think about it carefully, he replied that it would also be bankrupt. I then asked whether it would be able to reorganize. He thought about it for a minute, and responded negatively. His corporation was that firm's principal customer, and if his corporation ceased doing business with it, that company would go out of business. He then began to appreciate the fact that his firm possessed more bargaining power than his adversary. As a result, he negotiated a good deal for his client.
I was teaching negotiation skills to a group of attorneys from an Asian country when several government attorneys asked for my advice. They were preparing for a bargaining interaction with China, and told me that they had absolutely no bargaining power due to the huge economic advantage possessed by China. I asked them what they possessed which China was trying to obtain. It involved advanced technology. I asked them how much China needed that technology. They indicated that China really wanted to obtain it. I then asked if China could obtain it elsewhere, and they responded negatively. Only at this point did they begin to appreciate the fact that they possessed meaningful bargaining power.
When you prepare for future bargaining encounters, after you carefully explore your own side's needs and interests, be sure to look across the bargaining table and try to place yourselves in the shoes of your opponents. How much do they need the prospective deal? What are their needs and interests, and what are their non-settlement alternatives? How high or low do you believe they would be willing to go before they accept their non-settlement options? Only when you have explored these issues should you think you are ready to commence the real bargaining.
Charles B. Craver is the Freda Alverson Professor of Law at George Washington University. He is the author of Effective Legal Negotiation and Settlement(7th ed. 2012 LEXIS); Skills & Values: Legal Negotiating(2nd ed. 2012 LEXIS); and The Intelligent Negotiator (2002 Prima/Crown). He is the coauthor of Legal Negotiating (2007 West), Skills & Values:Alternative Dispute Resolution (2013 Lexis), and Alternative Dispute Resolution: The Advocate's Perspective (4th ed. 2011 LEXIS). Over the past thirty-five years, he has taught negotiation skills to 90,000 attorneys and business persons throughout the United States and in Canada, Mexico, Puerto Rico, Austria, England, Germany, Turkey, and China. He can be reached at firstname.lastname@example.org
Copyright © 2012 Charles B. Craver
Copyright © 2012 The Negotiator Magazine
The Negotiator Magazine (December, 2012 - January, 2013)