By: Edward Lestrade, on behalf of Slovkonsult s.r.o.

Negotiation is a part of our daily routine. Most of us enter into at least 2 significant negotiation situations daily where positive outcomes are very important for us. Our negotiation partners include colleagues, friends, bosses, partners, customers and vendors. In all these settings we use a variety of persuasion techniques to get our own way. The majority of the techniques we use tend to be based on intuition, emotion, and reliance on past positive experience and for the minority of us, as a result of training/ education in negotiation skills.

As such, this article aims to give busy legal practitioners and business executives a comprehensive and focussed skills-base in technical negotiation skills. It will focus on ‘business’, or ‘commercial’ activities because other kinds of negotiations can be about emotional or ‘political’ outcomes predominantly.

The Art of Negotiation

Negotiation can be generally defined as the process of realising the desire by parties to come to terms on a particular matter. Both selling and negotiating are about getting others to agree to your ideas. The key word is persuasion. Therefore in order to master skills in both, you need to have background knowledge of psychological theories of human motivation.

Motivation is the impulse to do or not do something. Generally, people do things to return to a state of equilibrium (balance/ comfort). Balance can be represented by happiness or delight or enhancements of both. For example, we are motivated to eat to become less hungry and also for enjoyment/ pleasure. We are motivated to impress our bosses so that we don’t get dismissed, or lose promotion prospects. But, there are negative and positive factors in all things that motivate us. We are often motivated by a combination of them – desire to reduce fear, satisfy the pleasure of greed, revenge, etc. Generally, better and more reliable results are achieved from positive motivational influences and they tend to last longer. Negative motivational influences on their own are generally not lasting and as robust (i.e., if you force someone to do something, he/she is likely to do it as well are if he or she really wanted to do it on their own).

Abraham Maslow & Motivation Theory

Abraham Maslow presents a rough guide for our motivational influences in his seminal book Motivation and Personality (New York: Harper & Row, 1970). There are other theories on human motivation postulated by other authors. However, in my view, these other theories all significantly support and complement Maslow’s original theory of a sequentially developed standard hierarchy of human needs.

According to Maslow, we have a hierarchy of needs which are developed sequentially the top one being: ‘self-actualisation" – to fulfil oneself, to grow and use our skills optimally and creatively. The others leading up to that are: a) basic human needs (physiological safety – food, water, etc.); b) safety and security (security, protection and stability in day to day events); c) social (need of love, affection, sense of belongingness in one’s relationship with others); d) esteem (need for respect, prestige, recognition, personal sense of competence and mastery).

Motivational Theory and Persuasion Techniques

Therefore, from a theoretical perspective, in order to persuade/ motivate therefore, we need to find people’s ‘hot’ buttons, i.e., where they are in a motivational hierarchical structure. In that respect, it may be useful to use Maslow’s guide for assistance. For example, we might try conceding on price in a negotiation, but if the desired outcome concerns something else, then we will not persuade the other side to come to our way of thinking.

General ‘hot buttons’ might include: -

  • Security/ stability needs (try to be like your opposite number - people tend to be influenced by people who are like them and have similar priorities.
  • Social needs (demonstrate respect for the other side and earn it from them - people tend to want to do business with people they like/ respect, or/ and who like/respect them)
  • Esteem needs (help the other side to do a good job - people like to do a good job for their bosses. Also be considerate and thoughtful – do your research on the other side for personal likes/ dislikes - people generally want to do deals with people whom they can trust and who are professional.
  • Basic human needs (good to do business with pleasure over a coffee/ lunch or dinner or at a golf course. Try to introduce pleasure into the negotiation process. Make it fun, or interesting - people like to be entertained (don’t be boring).
  • Self-actualisation – let the other side believe that he/she is in control and that you are helping him/ her to achieve their objectives.

Non-verbal communication and neuro-linguistic programming skills

Neurolinguisting programming (nlp) has been described as hypnosis awake. It is a way of using total communication skills (verbal, non-verbal) to gain control over a person in his awake state. The technique uses matching of voice tone, body posture, etc. to a high degree of surreptitious similarity. After a while, the user is then able to influence the other side relatively easily. Do not however overestimate its use. Most professional negotiators will have read (or have been trained) in NLP or non-verbal communication skills. However, it works. Try using it and you may be surprised by the good results.

Commercial Negotiator’s General Skills Package

If you are taking on an experienced negotiator, be careful. Find a colleague mentor you can rely on when the going gets rough. Generally, if you feel out of your depth, don’t start. Get someone better, if you can, to do it for you. In that regard, you must not enter into a negotiation unless you are sure that you have a good chance to win. Be prepared, do your research on the other side. Do know your strengths and weaknesses and decide on what you want before you enter into the negotiation – know your top, middle and bottom position and do not deviate from them. Always trade concessions – I give you that, you give me something back. Never give something for nothing – you will regret you ever did! Do not negotiate until you have sold the basic deal. The sales process should always be antecedent to the negotiating process. Selling is the process of getting the other side to agree to your proposal in general terms -to get their commitment to do the deal on terms to be agreed. Without first selling the deal you have nothing to negotiate. You cannot finalise something that is yet undesired.

It is useful to bear cultural issues and national traits in mind. However, don’t get too carried away. Most international negotiators are aware of and tolerant of idiosyncratic national traits. Useful to remember them, but do not rely on them. However, it is good to remember some rules of politeness and respect for the other side – those can always gain you some good points. For example, a lunch meeting for business would not be favoured by the French; the Dutch like to negotiate after the contract is signed; in some Middle Eastern countries a handshake, or a person’s word, take precedence over a signed agreement. However, basically, if you follow the general rules for good negotiation they will survive cross-borders.

You should always use logic to sell your ideas. Logic is seductive – people really don’t want to appear irrational and/or unfair. When the negotiator appears illogical and unfair, know that you are not negotiating with the right person – someone else is pulling his/her strings. Again, do try not to negotiate situations that are inherently bad. Best thing to do is to walk away while you can. Bad situations could be – a) the other side has a history of unfulfilled commercial promises; b) there is the potential for personal conflict of interest (eg., other side may be your potential employer, etc.); c) phyrric victory may be achieved.

Do remember that negotiation and selling is about a perceived win-win. Try to avoid win-lose as people always try to get back one way or the other and that could be unpleasant. The deal struck must be satisfactory to both sides. Again, negotiations scenarios must be planned in terms of members, venue and basic preparations. For example, negotiations with ‘helpers’, ‘decision-makers’, final decision-makers’ have to be structured differently in terms of the setting and relevant preparations.

It is always helpful when negotiating with people who don’t want to negotiate to try to make them that the competition is interested, or that you are just about to sign up another deal, but the door is still open for a possible deal. But, you have to be convincing or the strategy may be perceived as cheap pressure tactics. When negotiating with professional buyers be prepared for price sensitivity. Avoid being pinned down on price at the tender stage, always quote low prices, or give a wide price band. If you quote a low price you can always re-negotiate it, once the other side has ‘bought’ the deal! Sell on service and long-term-relationship and complementary services.

When negotiating contract terms, know your law (and do take ‘expert’s’ opinions) and client’s rights and relative liabilities. Always know the entry and exit policy and plan for it. If you are negotiating choice of law terms seek advice from relevantly qualified lawyers with good insurance and choose a jurisdiction that will best protect your client’s rights in any litigation. Beware of arbitral clauses – they can be nothing more than an agreement to use a ‘freelance’ judge in terms of the choice of law clauses within the contract.

For ‘impasse’ in the negotiation process, re-close (resell) the deal. Go back to basics to make the other side aware what is at stake in the negotiations. Re-sell the benefits and features of the deal. Specify the objection – find out what you have to do to get the other side’s total satisfaction. You might offer a compromise to ‘close’ (‘..so if I can get you X, will this be OK?). Offer a collateral benefit and always appear to give more than you are getting. Use the ‘lost sale close’ as standard (‘…sorry it came to this, how could we have avoided this?’) – once the objection is identified, then re-sell the deal for re-commitment to negotiate terms.

The Negotiator’s Basic Skills Package

  • BE PREPARED
  • Specify and know all topics to be negotiated
  • Agree on what is not to be included
  • Agree on mutual objectives in terms of needs, wants and desires and be consistent
  • Achieve – all your needs and most of things that are ancillary
  • Know the options available (especially the minimum position from both sides)
  • See the argument from the other side and be creative and consistent with the truth (the other side certainly will be!)
  • Identify where you can be flexible and know stuff on the other side
  • Negotiation is about people – know the people you are dealing with.
  • Use timescaling effectively and be aware when it is being used against you as a negotiation ploy.
  • Give concessions for good behaviour
  • Use letters to re-close for timescaling techniques.
  • Test the water (do a ‘test/ assume’ sale)
  • Team or solo – try to match the other side
  • Appear stupid (to get the other side to relax and give you more information. Also, to
  • ensure that you have really understood this issue involved.
  • Appear honest (be consistent)
  • Use body language where possible – use neurolinguistic programming techniques and be aware that some signs may be ‘sent’ to mislead you from the other side, so evaluate them carefully
  • Use the team (your boss, your senior colleagues to relay negatives to the other side and to enhance your own position as a helpful mediator)
  • Beware of the switch/ deliberate mistakes from the other side - back out while you can or go for big concessions.
  • Beware of confusion - you are likely to have been severely disadvantaged.
  • Keep notes.

Your own Practical Model of Negotiation

Please use the article notes above and think of and make notes about a recent negotiation situation you have been in where the negotiator was good in your opinion. Now describe the setting and list the reasons for your opinion. Do these reasons match up with the article points? After you have done that, make notes about a recent negotiation situation you were in where the negotiator was bad in your opinion. Now describe the setting and list the reasons for your opinions. Do your reasons match up with the article points?

You will now have probably created a generalisable model of a good negotiator similar to the profile which follows. As such, good negotiators are likely to have all of the following attributes:-

  1. perceived to be in a position of authority
  2. good rapport with the negotiating partner
  3. already sold the subject matter of negotiation
  4. not confrontational
  5. perceived to want to help the negotiating partner achieve his/her goals
  6. Always sold win-win scenarios
  7. perceived to be truthful
  8. were prepared
  9. addressed cultural issues
  10. perceived to have integrity
  11. knew what he/she wanted
  12. knew the other side very well

The content of this article does not constitute legal advice and should not be relied on in that way. Specific advice should be sought about your specific circumstances.