publication of the International Legal Technology Association
Issue link: https://epubs.iltanet.org/i/231030
NEGOTIATING WIN-WIN FEE ARRANGEMENTS THREE STEPS TO SUCCESS Every negotiation has a beginning, a middle and an end (like a good novel or article). But how much time do we really give to the beginning — preparing for the negotiation? Ten minutes? An hour or two? More? Those who are experienced in negotiations frequently state that "preparation is 90 percent of negotiation," and yet many of us think it starts when we get in the negotiating room or in the taxi ride to our client or law firm. We need to spend more time preparing. If we prepare well, we have a much better idea of what information we should share with the other party and what information we should request. Through preparation, we can clarify what we need and define the value for our firms. We can also establish what we can provide in return to the other parties. By thinking this through in advance, we are better able to make negotiations as productive as possible. Proper preparation also gives us time to put ourselves in the other party's shoes. We can determine what is important to them, which allows us to identify in advance potential sticking points to negotiate and possible concessions to offer or request. Adequate preparation will help you know from the outset whether or not you feasibly can do "the deal" (the cost might be too high or the fee too low). This will help you be comfortable in saying so, thus avoiding potential frustration later down the line. RECOGNIZE AND DETERMINE VALUE The "Sage of Omaha," Warren Buffett, is reputed to have said: "Price is what you pay. Value is what you get." But value can mean different things to different people. In our world it can revolve around themes such as risk mitigation, speed of delivery, cost or the catch-all phrase "other value-added services." The value that each party places on these as part of a negotiation will vary; some will always be more important than others. Therefore, it is important to think through what can add greatest value to the matter and what the acceptable level of cost would be to the parties involved. Think about how you can more easily highlight the value that you are offering to your prospective client as part of your proposal. This may include providing one or more options, each of which have a different level of cost and value attached. Above all, make it easier for your prospective client to be able to assess your proposal in light of others that they may receive. If you are a law firm client, be as specific as you can as to what you are looking for when issuing a proposal so those responding to your request are able to do so on a more apples-to-apples basis. You might also want to highlight those areas of value which are most important to you as part of this matter. These questions are sometimes answered during the actual negotiation. Studies have shown that skilled negotiators ask twice the number of questions that poor negotiators do. Why? Because it helps them understand what is important and of value to the other party so that they can adjust their proposals accordingly. UNDERSTAND THE DIFFERENCE BETWEEN INTERESTS AND POSITIONS As a negotiator, it's important to recognize the difference between somebody's "interest" and their "position." Interests, which are often not stated, drive people's stated positions as part of a negotiation. By stating your position, you are saying this is the place from which you will negotiate. The other party (or parties) then react to this position, usually without finding what underscores the position itself.