Editor's Note: We asked America's top negotiating pros--Kenneth Feinberg, Kevin O'Leary, Leigh Steinberg, Richelieu Dennis, and Eugene Driker--to share their haggling tips and strategies so you can ramp up your dealmaking game.
It all starts with putting yourself in the other guy's shoes. Kenneth Feinberg says the most important thing you can do before stepping into a negotiation is to learn as much about your opponent as possible, so you know what he or she really wants. "What is the other person looking for in a negotiation? How do you accommodate your adversary? An effective negotiator says to himself, 'If I'm the other side, what do they want to hear from me?' Try to project in your negotiating style, and in your terms and conditions, things that the other side will find inviting."
Feinberg has waded through more than his fair share of terms and conditions. For decades, he has negotiated and determined the size of settlement payouts for victims of such tragedies as the 9/11 terrorist attacks, the Virginia Tech massacre, the BP oil spill in the Gulf of Mexico, the Sandy Hook Elementary School mass shooting, and the Boston Marathon bombing. Even in cases with hundreds of thousands of claimants, he has been regarded as a fair, trustworthy arbiter who is adept at working with people living through their worst nightmare.
Doing the hard work of immersing yourself in the details of the dispute is the key, Feinberg says, to his success. "You've got to master the facts," he says. "You've got to know more than your adversary. You've got to know all there is to know about the negotiation. It's about sheer competence and thoroughness." Feinberg uses the information he gathers to get into the heads of the parties involved in a negotiation.
The first settlement Feinberg ever worked on came in 1984, when Jack B. Weinstein, a federal judge in the Eastern District of New York, appointed him to a team of three charged with mediating a class-action lawsuit filed by Vietnam veterans against the makers of Agent Orange. The veterans sought damages for ailments they believed they suffered because of their exposure to the herbicide during the war. For years, Dow Chemical, Monsanto, and five other Agent Orange manufacturers had denied responsibility, insisting it caused no physical harm to humans. The veterans wanted $1.2 billion in damages. The seven companies told Feinberg they were willing to pay a collective total of just $25,000.
Eight weeks later, the companies created a $180 million fund to be paid out to the veterans and their families.
How did Feinberg narrow a billion-dollar gap? The single most important tactic, he says, was presenting each side with the potential ramifications of not reaching a deal. If the case went to court, the veterans stood a real chance of losing, because science at that time had not found a strong correlation between Agent Orange and the illnesses afflicting the veterans. On the other side, the manufacturers risked being publicly vilified, as well as the long-shot possibility that a sympathetic jury would ignore the lack of scientific evidence. "What both sides want is certainty," Feinberg says. So when negotiating, always "promote the certainty of a voluntary, consensual resolution. Show them why they should be risk-averse. Remind them of the uncertain consequences of not negotiating an agreement--that they'll be rolling the dice."
Years later, in 2001, U.S. Attorney General John Ashcroft chose Feinberg to determine payouts of $7.1 billion in taxpayer money set aside by Congress for the September 11th Victim Compensation Fund. Feinberg's role was to decide how much each victim's family was entitled to based on the likely amount of lifetime earnings lost. Those who accepted waived their right to sue the airlines, airport security, and other agencies they felt bore some responsibility for negligence in the attacks. Congress decided up front it would keep the program open for 33 months.
Feinberg says the deadline was crucial in successfully coming to terms with 97 percent of the 9/11 families. It turns out that in potentially contentious negotiations, when the two sides seemingly can't agree on anything, they can usually come to terms regarding a time limit for talks. "You have to establish at the beginning: We disagree on a lot of things now, but when do we agree that the negotiations will end?" he says. "Without an end time, a negotiation can just drift along. It's an excuse to do nothing. If there's a deadline, and everyone knows that three weeks from now at 4 p.m., this negotiation is over, that incentivizes people. You almost always reach your deal at the 11th hour." Two-thirds of the 9/11 settlements came in the six months before the deadline.
Another key point in a case with emotional parties, but also important in just about any negotiation, Feinberg says, is to identify the position of every person involved. In the 9/11 case, many of the families were skeptical of the process early on, while a select few were anxious to accept the money and move on. "You find out," Feinberg says, "who's rigid and who's more malleable, who's the good cop and who's the bad cop, who's emotionally involved and can't budge versus who's able to bridge differences."
Finding those people on the other side who are eager to reach an agreement can help you convert the others. "If you're negotiating with a group and five are in favor of a deal and five are not," Feinberg says, "then you're halfway home. You use those five who are willing to settle to try to get you to a resolution." Those who accepted their payments from the 9/11 fund early on proved invaluable. "They tell all of the critics, 'The program works. It's very generous. There are no hidden agendas. There are no secret paragraphs. It's very open, it's very transparent, and you ought to be part of it,' " Feinberg explains. "That was more important than anything I said."
In all negotiations, Feinberg believes in being in the same room as the people he's dealing with. "There's no substitute for face-to-face negotiation," he says. "You can't do these things on the telephone."
Through all the combative back-and-forth, pain and anxiety, there's one mindset that helps Feinberg, both as a master mediator and as a person, get through a tough negotiation. "Be very optimistic, very positive," he says. "Say, 'There's no reason we can't settle this. We're all reasonable. Let's find a way to get to yes.' "
Additional reporting was provided by Zoë Henry.