Tips for Effective Negotiation

Negotiation is an art form that is often overlooked by lawyers and non-lawyers alike. Although it’s a vital part of our interaction with each other in society, the only people who seem to take the time to master effective negotiation are sales people.

If you’re trying to resolve an issue before you have to go to the county court, these negotiation tips may enable you to get what you want before you lodge proceedings. Similarly, if you are involved in litigation and want to settle before the final hearing, you are going to need to negotiate terms with the other side.

What Are You Negotiating On?

One way to think about the subject of your negotiation is to think of it as being a box with a number of items in it. Those items are the issues over which you need to negotiate. The box is the total package that you are bargaining over. If for example you’re negotiating over the price of an item, or over a debt, consider the things that you might be able to negotiate:

• how much the debt actually is, i.e. does it include interest, are there any late payment charges involved, and is there any dispute about any part of the payment being made?
• when that payment should be made. What are your timescales for the payment? Do you need it all in one go or would you be wiling to accept installments?
• how the payment should be made. A cheque will take a few days to clear, and there is a risk that it may not be honoured, or that it will be cancelled. Would you accept BACS transfer or other wire transfer? If you accept cash, you must be willing to issue a receipt for the money.
• If there is an issue over the price, or the amount of the debt, would you be willing to reduce the amount (or concede on interest charges or late payment penalties) if they paid more quickly?

Each of these elements above should be thought of as bargaining tools, rather than concessions. You are not giving away the items in your box, but are rather repacking the box to be able to present the package in a different way. If you are able to do this successfully, you may still get everything that you want - but on slightly different terms.

With each element (or item in your box) you need to understand how much each item is ‘worth’ both to you and to your opponent. For example, an extended period for payment is likely to be highly valuable to a business that is struggling with cash flow, which may not be your highest priority. Alternatively, if you are struggling with cash flow, you may consider that renegotiating the interest on the debt or reducing the debt is more advantageous to facilitate prompt payment.

What If We Can’t Agree?

Sometimes negotiations can become stale. Neither side is willing to concede anything. All that happens is that each side repeats themselves over and over again, and there is no ‘grey’ area. If this happens, try to take a step back from what you want and look at things from the other side’s point of view. There will be a reason why they are not budging. If you can work out what that reason is, you’re more likely to be able to get negotiations going again. If you look at the other side’s terms, and ask yourself ‘why are they sticking to this?’ you should be able to see the answer. It may help to look at your own terms to begin with and ask yourself ‘why’ you’re not willing to change them.

Preparation: The Key

Before you start to negotiate, make sure you’ve done your research. Work out everything you need to know about your opponent and the deal you’re trying to do. The more you know beforehand, the quicker it will be for you to agree terms when you come to an acceptable arrangement. If you move quickly once you reach an agreement, you don’t give the other side a chance to reconsider.

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