A Business Negotiation Primer
People who find themselves involved in litigation often make the mistake of thinking about it like a sport, with each side trying to score points and the judge in the middle watching closely as a referee. However in real life, business litigation often does not look like that. Much of litigation involves posturing and negotiating in an attempt to find an agreement that both sides can be happy with, so that no one has to go through the time and expense of a trial.
This can be a problem because Americans, as a culture, are often uncomfortable with negotiating. Consequently, people, even business owners, do not always learn the skills they need to negotiate effectively. These tips are just a few things to keep in mind when negotiating an agreement, whether in or out of the litigation context.
Go in with Information
One of the best things ways to improve negotiation outcomes is to do research beforehand. In the litigation context this may involve a discussion with your attorney about the potential risks of the case, how long it will last, and its likely cost for both sides. It can also help to do research on the opposing party to see if they are better equipped to bear those costs, which can reveal how much pressure to use during negotiations.
Take Advantage of Anchoring
Anchoring is the idea that the opening offer in a negotiation often tethers the discussion. Consequently, an opening offer closer to the offeror’s desired outcome is going to help them in the long run. This is another place where research can pay off. The idea is to make an opening offer that is just reasonable enough to not offend the other party. This starts the opposing party off at a disadvantage that can have a major impact on where the negotiation ends up. However, an opening offer that is perceived as unreasonable can often have the opposite effect.
Keep Different Valuations in Mind
Another important thing to think about during negotiations is that different parties often value things differently, either because of sentimental value, personal preference, or a particular strategic relevance to their business. These are often great places to make a deal. If one company has something that they cannot use, but that the other can get a lot of value out of, then it is often an easy thing to give up, provided the company giving it up gets something worth more to them in return. That way everyone wins.
Talk to Someone with Authority
Another important point when negotiating with another business is to ensure that the person across the table has the authority to actually make a deal. There is nothing more frustrating then getting an agreement hammered out after hours of discussion, only to hear that the other party has to run it by a higher-up for approval. Savvy companies can even use that to their advantage, learning all about the other side’s negotiating position, only to send the deal back to square one after the C-Suite “rejects” it.
Negotiating during litigation can be a difficult or intimidating task, but an experienced attorney can help. If you are involved in a business dispute and want to learn more about your legal options, contact a West Palm Beach business litigation attorney at Pike & Lustig, LLP today.