Life is negotiation. So much of our daily lives revolve around this practice, and yet so few of us spend any time truly learning what it takes to become great at this requisite skill.
Think about it: How much of your life involves negotiation? Most people don't realize when it is taking place. But it surrounds us. It is who we are.
Sure, everyone knows that you have to negotiate to buy a car. Some may even know that almost every retailer—if pushed—will negotiate a better price for an item. But what about the more subtle forms of negotiation? Do you even recognize when these occur?
Have you ever said to your spouse, "I'll take out the trash. Can you load the dishwasher?" Negotiation. When you ask for a raise? Negotiation. Who's driving? Negotiation.
Since I was a child, my parents have always told me I was good at manipulating others. Negotiation. Perhaps it was inevitable that I went into law, at least initially. A profession that heightened my abilities at reading people and knowing how to react to the tells they were giving me.
After half a lifetime of negotiating and learning the techniques to do so better, here are a few of the secrets I have picked up:
To negotiate, you must learn how to listen and apply what you hear to formulate your next move. Every word has a purpose. Every statement a hidden tell. If you listen carefully, I mean really carefully, you will be able to hear and understand what your opponent in the negotiation truly wants. Listening is the bare minimum skill you must have to start building your abilities as a good negotiator.
2. Be Willing to Walk Away
When two sides are negotiating, one of the other most basic skills you must retain is the ability to walk away if the deal does not satisfy your requirements. Some may think this is axiomatic, but it is not.
Once I was assisting a friend in negotiating the purchase of a new car. At the end we were close, but the dealer refused to remove some extra charge that was just more fat on the bone for his sales price. After much back-and-forth over this item, we reached an impasse: The salesman would not take it out of the price, and I would not move on him taking it out. I stood up, politely thanked him for his time, and said to my friend, "Let's go."
To my surprise, my friend remained seated, turned his eyes toward me, his expression quickly changing to that of a child's wanting a toy in a toy store, and said, "But I really want the car." At that point, any chance of continuing to negotiate a better deal evaporated like a puddle on a hot Southern summer afternoon. If he would have stood and walked, we would have never made it to the door before that item was taken off the cost. But by not being willing to walk away, we gave the other side a critical advantage: He knew we would not walk. Always be willing to walk away from a deal, and let it be known in either a subtle or not so subtle manner, as the situation dictates.
1. Feign Indifference, Don't be Indifferent
Obviously we care about the thing we are negotiating for, otherwise there would not be a negotiation. But just as we must be willing to walk away from the deal, equally as important is that you must never let the other party know how much you want or need to make the deal.
For example, for anyone who is familiar with my other writings you may recall that I am a trial attorney who has tried hundreds of cases in my career and litigated thousands more. At some juncture during the course of litigation, the parties will discuss settlement. Irrespective of my client's concerns and directives, I always feign indifference during settlement discussion. Why? Because if the other side ever gets a whiff that you are not willing to try the case, it will have a decided advantage over you in the negotiation process.
So no matter if my client is ready to take the case to the mat or can't afford or does not want to move forward anymore, opposing counsel gets the same routine from me every time: "We can try to settle the case or just go to trial. I'm good with whatever." The goal in feigning indifference is to be as difficult to read as a blank page. In the end, however, it is a valuable skill to have in any negotiation. So you may not be indifferent, but never let them know.
2. Have the Ammunition You Need
In litigation, this is about having your case ready to go to trial if it does not settle and making sure the other party knows you are ready. In other negotiations, such as in real estate, it's about letting a prospective purchaser know you have another buyer on the line and that if he does not meet your terms, you'll just sell it to the other guy. In any negotiation that involves an alternative action if the terms are not met, you must let the other party know you can, and will, do a specific act it does not want you to do in the event terms are not met. In short, let the other party know that you have your ammo and are willing to use it.
Many years ago, my then firm represented a man who had been horrifically injured by a product. Our firm was brought in to represent his interests against the manufacturer. Because of certain confidentiality provisions, I cannot mention the product or even the type of product it was. Suffice to say, however, it was the first case of its kind and had significant national exposure on not only a media level but political as well. Well, as in any litigation case, the parties are required to exchange documents whether they are detrimental or not to your case.
We knew that the defendants were holding out on us and saying that these specific very damaging reports did not exist despite the fact we had witnesses that testified to the contrary. We knew if we got our hands on these reports, they would be shaking in their boots. Well, to make a long story short while referencing a great episode from Seinfeld, we employed a special team of people to "retrieve" the reports for us, and "yadda yadda yadda," we appeared at pretrial with these ultra-damaging reports in hand. The case, one of the most contentious and longest I had ever been involved in, settled minutes later. Why? Because we had the ammo.
So it does not matter if it is litigation, real estate sales with an alternative buyer, or otherwise, always have the ammo—or appearance thereof—to support your side in the negotiation.
1. What Motivates the Other Party? Use It
As a prerequisite, you must always listen. Listening, as stated above, is critical to hearing what the other side wants. But on a higher level, you must strive to understand why. What is motivating the why? If you can listen between the lines to understand that which truly motivates the other party, you will gain a decided advantage in the negotiation of the deal.
Let's take an example from McDonald's, the iconic company that is now making significant inroads in China. A few years ago, I watched a special on McDonald's that was fascinating. It went through the company's history, business philosophies, and plans for expansion. In regard to expansion, the company has at least one team of individuals canvassing China looking for great locations for future McDonald's.
In this show, McDonald's found and built a restaurant on a relatively undeveloped plot of land on the outskirts of an industrial city. Why? Because McDonald's had done its research and knew that within three months of the purchase or lease of that land the local development authority would be approving a mixed-use high-rise community situated adjacent to McDonald's new location that would house over 20,000 residents. So, sure, McDonald's wanted the land to build a restaurant.
But if you were the owner of that land, wouldn't you find it helpful to understand what motivated the selection of that site? Armed with that knowledge, is it not reasonable to ask for a higher price in the negotiation process? That what in this instance is McDonald's desire to acquire the property. The why, however, and a more thorough understanding of the why, is what would really drive the deal.
So listen and figure out what motivates the other side. It will give you a leg up in the negotiation.
2. Lead Them to the Water and Let Them Drink
A good negotiator knows you can lead a horse to water but you cannot make it drink. Despite your best efforts, the horse must drink on its own.
In litigation, our clients are often frustrated at the length of time it sometimes takes to settle a case out of court. Sometimes this frustration even boils over into demands that we speed the process up or make the other party sign or respond to an offer of settlement.
At the end of the day, however, no amount of complaining, yelling, or otherwise can make the other party sign an agreement. In the end, you can negotiate the deal but the final negotiation—where you ultimately get the party to sign on the dotted line—well, that is all up to them.
You cannot hold their head underwater until they sign. But you can subtlety remind them that every day the agreement is not signed they are just racking up more attorney's fees. Heck, I like to even throw in a little humor referencing the fact I will soon be sending two kids off to college, and I certainly don't mind if they take their time; they are just helping with my kids' college-education fund.
So as in any negotiation, you must be tactful and subtle and lead them to the deal but always mindful you cannot force a deal to be made. A strategy of repeated subtle influence in this regard is often required.
3. Accent Morphing
Familiarity breeds comfort. Comfort leads to a heightened ability to get a deal done. Let's face it, we are comfortable around those with whom we feel some common bond. Years ago, when we got out of a lengthy negotiation, my co-counsel turned to me and said, "Never realized you had a Southern accent before." As the day wore on, my accent dissipated, and I returned to my normal manner of speaking.
Well, it seemed that I had, during the course of negotiation with the opposing counsel, started speaking in a slight to moderate Southern accent during our marathon discussions before a court in Western Virginia. The opposing counsel himself was a large, imposing Southerner much like Fred Gwynne's portrayal of Judge Chamberlain Haller in My Cousin Vinnie. Well, it seems that somewhat subconsciously after hours of stalemate in this heated discussion I had started adopting the accents of the opposing counsel and the judge, a local legend himself. I know this may sound crazy, but we traced when the ice broke in regard to the settlement talks back to around the time I started speaking in a more gentile, Southern manner.
And so began a practice of mine of sometimes morphing my accent, ever so slightly in some instances, more so in others, to create a bond of familiarity between myself and the person with whom I am negotiating. Now, I'm not saying if you are from the deep South and are negotiating with someone from Brooklyn you should suddenly lose your drawl and go all Vinnie Barbarino on them. Rather, slight almost imperceptible changes in your accent to mirror your opponent in the negotiation can create an unconscious feeling of familiarity with you without the other side even realizing it, to the extent that it can, and often does, assist in the negotiation of a deal.
4. Vilify, Unite, and Conquer
Often we are placed in a position that no one wants to be in. A position that someone else has put us in. But the only way out is to negotiate a truce. This is often the case in law when you receive a preliminary ruling that does not support your case or, as is often the case, a ruling that makes trial more difficult for both parties. When this occurs, use the master technique of vilifying the third party, using it to unite those parties in the negotiation, and then conquer the deal through the aforesaid vilification and uniting of common interests.
For instance, we were once in a proceeding in which the judge made a ruling on evidence presented at trial by opposing counsel that was going to fundamentally change the outcome of the case. It was evidence the opposing counsel had offered and, upon our objection, should have been denied but the judge was new, did not know this area of the law very well, and let it in over very stern objections. Even the opposing counsel was stunned it was received.
At the end of the day, all trial counsel agreed that the party offering the evidence was actually in a very bad position. They would likely now win the case, but because the ruling on that critical piece of evidence was simply wrong, we had an absolute grounds for appeal that would be victorious years later, with the matter most likely having to be retried at significant cost and expense.
So what did we do? Vilify, unite, and conquer. Realizing our good fortune, we quickly vilified the court to the opposing counsel, making it appear like the enemy. We established that all parties were now in the same boat, having been sabotaged by this bad ruling. And we settled the case, because no one wanted a three-year appeal that would result in a new trial four to five years from the date of the current trial.
Vilify, unite, and conquer. It won't always be available for you. But when it is, use it to get a deal done.