Digital White Papers

December 2013: Business and Financial Management

publication of the International Legal Technology Association

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Page 13 of 41

NEGOTIATING WIN-WIN FEE ARRANGEMENTS However, we need to recognize that in today's cost-conscious environment negotiation is merely a natural part of the buying process. It also can be a chance for us to strengthen our respective relationships through better trust and to develop more rewarding commercial relationships. It is also typically a "one-off" discussion. Once done, you're seldom tempted to go back. You may also hear this type of negotiation referred to as "distributive," where the parties compete over a fixed sum of "value." The key question is who claims the most value, with the gain of one side being to the detriment of the other. It's an approach which encourages a longer-term relationship between the respective parties, and is one that is highly recommended for those of us working in the legal sector. Each party is more likely to make concessions and seek to partner on the work in order to develop, or sustain, a long-term relationship. On the flipside, collaborative negotiation is more trusting, more tolerant and more cooperative, and the parties involved are more emotionally detached. (Note that this is not the same as being disinterested.) It is also typically more informal. This is often referred to as being a win-win negotiation. This type of negotiation is also sometimes referred to as "integrative," where the parties cooperate to achieve maximum benefits by integrating their interests into an agreement. These types of deals are all about creating value and claiming it. This is exactly the type of negotiation approach we should look to adopt when and where we can. Negative perceptions of negotiation could be due, in part, to the different styles of negotiation that exist. If you think back on your own experiences, you might recognize some of them — from the bluster, hard bargaining and other slightly aggressive styles to those that are very conciliatory, calm and productive. For those of us in legal services, it boils down to two different stances. •Positional negotiation is where one party "wins" and the other "loses" (assuming there are only two parties in the negotiation) •A collaborative negotiation approach is when both parties feel they have won or at least gained something from the agreement Positional negotiation is often public or formal and is characterized as competitive with each side generally intolerant to the other side's viewpoint; parties can quickly become emotionally involved.

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