When I started exploring the science of negotiations, I became interested in interviewing expert negotiators to comprehend the intricacies of real-world negotiations. These interviews informed my lens on the subject and laid the foundation for how I apply to train negotiators. Among the lessons learned, the central tenet that has remained steadfast is expert negotiators consistently employ relationship-based negotiation strategies.
In this blog, I aim to share some invaluable lessons I learnt from Toronto's expert lawyers and their adept use of relationship-based negotiation strategies.
Nestled in the vibrant ambiance of Toronto's Downtown core, I interviewed seasoned business lawyers, each bringing a wealth of experience spanning 2 to 30+ years. Their expertise spans diverse industry sectors, including employment, real estate, and mergers and acquisitions. To unravel the evolution of lawyers' mentalities, I contrasted early and late-career practitioners, delving into the nuances of their negotiation strategies and identifying consistent tactics within this diverse cohort.
For context, negotiations unfold over an extended period, embedded within pre-existing social relationships at various interaction levels – between clients, lawyers, clients and lawyers, and even lawyers and mediators/judges. Lawyers are strategically positioned to influence the negotiation processes by assessing risks, shaping negotiation goals, implementing strategies, and filtering the intentions and communication of all involved parties. Interestingly, the social context between opposing lawyers is a decisive factor, surpassing the negotiation structure and significantly impacting the overall success of the negotiation.
Upon analyzing the responses, a resounding lesson surfaced: experienced lawyers at the pinnacle of their profession consistently leverage relationship-based negotiation strategies. Here, I present vital takeaways that elucidate how relationships influence the negotiation process.
Insight 1 - Building Bridges or Barriers: Interpersonal Dynamics as part of Negotiation Strategy
The seasoned expertise of senior lawyers shines through in their strategic approach to negotiations, a method I term relationship-based negotiation strategies. These adept professionals strongly emphasize evaluating their counterparts' competence and cooperative/competitive tendencies to craft precise strategies.
When confronted with unfamiliar opposing counsel, senior lawyers meticulously embark on information gathering. Precisely, they keenly assess the opposing council's 1) competence, considering factors such as previous deals and time practicing law, and 2) cooperative/competitive tendencies, including honesty and sharp practices. Without an existing relationship and minimal information, most lawyers commence with a cooperative approach, presuming competence. Seasoned lawyers take it further by strategically employing relationship-building tactics, engaging in small talk, and seeking common ground in personal lives, such as vacation, family, or shared acquaintances. This deliberate strategy aims to cultivate rapport to benefit future business discussions.
When perceiving the opposing council as collaborative, the negotiation process becomes smoother. Lawyers demonstrate a willingness to admit mistakes, listen to the opposition's position without bias, speak more candidly and informally, and safeguard the opposing lawyer's reputation through acts of good faith. Positive relationships between lawyers foster a more prosocial negotiation environment, described by practitioners as easy, with resolutions reached more efficiently.
Conversely, senior lawyers are more cautious if the opposing council is perceived as competitive. All exchanges are meticulously documented via email, and in-person and telephone communication is minimized. Lawyers purposefully restrict themselves to formal interactions, expressing concerns that informality may lead to inadvertent information sharing, jeopardizing their client's interests. A negative relationship between lawyers triggers a defensive strategy characterized by written communication, pre-negotiation strategies involving bluffing and increased concessions, and a heightened need to scrutinize opposing counsel's figures. Competitive partners introduce additional time and cost to negotiations for both involved clients. Overall, understanding and adapting to the interpersonal dynamics between lawyers is crucial in shaping the negotiation strategy and influencing the success of reaching a deal.
Insight 2 - Strategic Reputation Management
Legal professionals navigate a complex reputation landscape, meticulously cultivating their standing within the firm, the broader legal community, and with clients. The art of reputation management is a nuanced skill, masterfully executed by senior lawyers who recognize its pivotal role in shaping future client relationships. This awareness is heightened by realizing that each industry's legal bar is notably small as they negotiate with a known counterpart 70% to 80% of the time. A stark contrast emerges with junior lawyers, who interact with known counterparts 20% to 30% of the time and often prioritize legal competence over building relationships with opposing counsel, perhaps due to their evolving understanding of the industry's compact nature.
Senior lawyers, possessing a profound sense of their reputation, strategically shape their communications with opposing counsel, actively seeking to foster cooperative relationships. A recurring observation is the judgment by senior lawyers that their younger counterparts lack essential 'social skills.' Mindful of their reputation, seasoned professionals actively employ strategies to maintain a cooperative norm within their legal community. Investing time and effort, they guard against the potential financial rewards of pressure or bully tactics, ensuring these do not become ingrained practices.
One senior lawyer highlighted the proactive efforts of their firm to uphold a cooperative norm within their legal community. Senior lawyers may go above and beyond, working without charging the client, to prevent the financial reward of pressure or bully tactics that could be detrimental in future dealings. Another seasoned practitioner emphasized the importance of client management, explicitly outlining the strategies they would and would not engage in to preserve their reputation. For instance, this lawyer steadfastly refused strategies that would compromise their standing as a serious professional who "make promises, not threats." In instances where a client requested a strategy that could undermine their reputation with other lawyers, such as bluffing a lawsuit for concessions, this senior lawyer declined, prioritizing their enduring reputation over any single client. Reputation, for them, stands as an invaluable asset, far surpassing short-term gains in client relations.
Insight 3 - Trust in Mixed-Motive Negotiations: Verify, Build, and Sustain
Trust, as elucidated by senior lawyers, entails acknowledging each party's self-interest without taking it personally. Within the legal context, trust flourishes when lawyers expand joint gains and individual benefits for opposing counsel. Trust is maintained when individual gains do not compromise the opposing lawyer's reputation or exploit vulnerabilities. Conversely, distrust arises when cooperative norms are breached, and once lost, trust will not be regained.
Seasoned lawyers recognize the profound impact of trust on the negotiation process. Trust enables lawyers to streamline negotiations, reducing the need for grandstand strategies, fostering honest exchanges, and uncovering more integrative potential in deals.
Experienced legal professionals actively strive to expand joint gains while respecting individual interests, aiming to maintain a sense of fairness even amid adversarial negotiations. Drawing on their wealth of experience, senior lawyers navigate negotiations with a profound understanding of cooperative norms. They build trust through consistent cooperation, fulfilling promises, and even supporting the opposition's reputation.
Trust-building behaviors between opposing counsel include being consistently cooperative, refraining from sharp practices, and avoiding the use of information exchanges in informal discussions that may later be brought up in formal conversations or court. Trust is further solidified by adhering to one's word, meeting deadlines, explaining positions logically during disagreements, and providing opportunities for saving face. Additional trust-building behaviors involve showing empathy, perspective-taking, and forgiveness, such as giving the benefit of the doubt, refraining from capitalizing on mistakes, and not amplifying minor errors publicly.
Failure to recognize the role of positive affect in building trust and rapport hinders the engagement of necessary behaviors and tactics for fostering a cooperative relationship. Senior lawyers, inherently more relationship-focused, actively foster positive emotions in opposing counsel by inquiring about their day, finding points of commonality, engaging in humorous exchanges, and offering compliments on opposing strategies at the conclusion of negotiations. In the nuanced dance of negotiations, trust emerges as a linchpin, a delicate yet powerful force that, when cultivated, propels negotiations towards more cooperative and effective outcomes.