Negotiation

26 May

• Will probably move rooms on Thursday.
• Handout 1: Syllabus
• Handout 2: Information and Ground Rules
• Handout 3: Negotiations
• Much of what we'll be exploring through the rest of the semester we'll see in this first session, but we'll be uncovering subtleties as we go along.
• The exercises are a critical aspect of the course. Negotiation is related to trial advocacy and legal writing: you get better at each by doing.
• To make things realistic, and to make the exercises work well for everyong, the following are critical:
  1. Never say "my facts don't tell me this" or "my facts tell me that:" in the real world, you're not working off of somebody else's documents, you just know what you know. And it is very realistic not to know stuff: part of the art is handling when you're confronted by gaps in knowledge, and part of what we want to do is get better at dealing with this. You don't want to get marked as a rookie by the other side.
  2. Don't leave your handouts lying around: there are common facts and confidential facts. Usually they are different colors, to help you get your own (don't pick up the wrong ones-- that creates problems). You need to bring it with you, but don't leave it sitting there.
  3. Remember not to say or do things that you wouldn't say or do in a real negotiation.
  4. Stay in character, all the time. Resist the urge to admit that we're students in summer school. Concentrating is what's going to make us good lawyers.
  5. Be prepared. For each exercise. If you don't you won't fulfil your obligation to the others your negotiating with. We will be in trouble if we fail to do this. Learning how to prepare for the negotiation is the most important thing you can do. If you prepare well, you'll do well.
  6. We can not miss a negotiation without prior approval from Heymann and the people with whom you're negotiating.
  7. There's no text, per se, although there will be a quiz on Shell. Most of what's written on the subject isn't too great: basically just "be like me" books. And you can't be just like them, because you aren't them. There's no right or wrong way to negotiate-- everyone has an opinion, and we should think of Shell as a second opinion to Heymann's. So read it prior to Thu, 6/11. The quiz will be simple, and not count much-- basically a pass/fail kind of thing to make sure we read the book.
  8. Some of the exercises (especially towards the end) will require some legal research. For 11 and 12, we'll actually spend some class time laying a foundation. We need to learn what's important to the negotiation-- none of what's required will be extensive. Usually, after all, lawyers will be negotiating legal issues.
  9. Three recommended "readings" with excellent negotiation scenes:
     1. My Cousin Vinny
     2. A Civil Action
     3. Life of Brian
  10. Grades are based primarily on the exercises. Almost entirely. The midterm and final exercises are both videotaped. No exam. Feedback is available both formally and informally. We'll have individual conferences ASAP after mid-semester taped exercise. Informally, just stick around after class, or drop an e-mail. Negotiating is an individual thing, so sometimes individual discussions are good.
  11. Ideally we'd read the "Negotiations" handout before class every day.
• Most negotiation courses (law schools and business schools) tend to have relatively simple fact patterns; they read like law school exams. This one will be a bit different: they're a little longer, with more information provided. Maybe a little more entertaining. Hopefully, more engaging.
• We'll devote 50%-75% of lecture time to how to deal with being prepared. How to prepare for specific individual problems.
• Almost none of the exercises is designed to make a particular point. That's unrealistic, in the first place. But second, every negotiation includes the same elements and potential problems. They all begin (someone has to speak first), for example: that's an intrinsic point of risk in every negotiation. Most book exercises are designed around some particular point-- you don't become a good negotiator by practicing a single topic once and then moving on to the next topic. So we'll get a chance to learn the same things many times. Plus, again, that's more realistic. It'll help us recognize common issues when they come at us packaged differently. Also, a one-theme exercise is too easy: both sides know what the optimal outcome must be, and they neglect all the other issues-- this requires less skill, concentration, and preparation.
• Two of the exercises are (less realistic) group projects. Multiple parties, many folks contributing things. They're like the one-on-one exercises, but we'll be rotating teams of two. The group preparation is advantageous, but it will also give us a chance to see how others are negotiating issues that we've prepared to negotiate ourselves.
• There are also two multi-party negotiations (this is more common than you'd think based on the rest of law school). These can be multiple parties to a single transaction, or multiple related transactions. Those are interesting and hard and highly realistic.
• Most of the exercises don't have time limits; we are free to continue negotiating (but don't take more than an hour on the videotaped negotiations). Efficiency is a worthy aim: after some point additional negotiation can become counterproductive, after all.
• Handout 4: Common facts for Exercise #1.
• Handout 5: Baetz facts for Exercise #1.
• Results cluster $200-$300.
• The moral of exercise 1: there's a range of perfectly acceptable results. The more complex the circumstances, the more there is to resolve, but negotiating is pretty much a bottom-line-oriented activity even though there's always some range.

  But there's rarely an optimal result. We strive to get the best results we can for our clients, but we don't often know what that is when we sit down at the table. And a lot of time, we'll never know-- even after the fact-- what all factors were at work.

• We're learning to negotiate, not to gamble; anyone can be stubborn and just hope the other side blinks. That's just bluffing, not negotiation.
• Don't negotiate your client down so that you're in a position where you can't fail in the negotiation.
• Practice Exercices (PE) to be done outside of class prior to class.
• People go to lawyers to solve problems they can't solve themselves. And the more important it is, the more foolish you are to do it yourselves. So this means we don't get the easy problems, and it means we don't want just OK results. We need to understand what our client expects, what our client is entitled to. None of this is going to be easy: they wouldn't be paying us if it were. That means we've got to be up to the task, to get good results in the difficult situations.

28 May

• For assignment #2, I am Royal York, negotiating with Wassim.
• For assignment #3, I am Roberts, negotiating with Barreras.
• The starting offer is a stressful thing: once you name a price (as a buyer), you'll never pay less. And, as a seller, you'll never get more.
• The numbers that you use ought to be in the same ballpark, or it'll make problems (you're not taken seriously, e.g.). But the numbers also are absolute limits, at least on one side.
• That's an intrinsic characteristic of every negotiation. You can't shape the discussion with an unrealistic number-- those just get blown off. You can't just lowball/highball someone: it doesn't work for anyone with any brains.
• The bargaining doesn't begin until you get to a realistic offer. And "realistic" means "realistic in the eyes of the other side." And if it's not engagingly realistic, it's an uphill battle to make you think it is.
• Once you've got a buyer's offer and a seller's offer, the chances are that the sale will end up halfway between them, because subsequent offers will tend to mirror one another.
• This is the "money only" problem-- if the negotiation is just about one (quantifiable) factor, once you start, you can predict the end. You don't need a lawyer to negotiate about just pure money: the lawyer needs to find a way around the money-only problem for the client.
• The money-only problem lurks under the surface of pretty much any negotiation. There are some ways to deal with it, but they need to be discovered and implemented in preparation, not at the bargaining table. So we need to anticipate when, where, and how the money-only problem will crop up, and have strategies for what to do about it.
• The conventional wisdom is that the one who makes the first offer is at risk. That might be a good general rule, but it's not universal: you can set the playing field, a little bit.
• Usually a negotiation isn't just a money-only thing, and even when it is, a good negotiator has tools to keep it from being that way. Complexity is our friend, as good lawyers: it gives us more to work with, and gives us the opportunity to do more. It requires creativity, and knowing what you're doing, but it makes opportunity. The more stuff there is, the more advantage the better-prepared person has.
• Everybody negotiates better when they do it their way, than when they try to do it some other way that doesn't fit them. That's why most of the negotiation books aren't helpful: they're based on the false premise that you can be like someone else.
• There's a misconception that effective negotiators are show-no-weakness, give-no-mercy bully types. That's not 100% wrong-- stereotypes don't arise out of thin air. But it's not the only way to succeed. Nobody can make you make a concession. It's not that hard just to say no.
• In negotiation, there's no judge or referee-- you don't "win" by having the better argument or the better policy. You can't make them do anything, and they can't make you do anything. Nobody can make you accept terms that you don't agree to. You don't necessarily have to get the last penny on the table in order to get a good result.
• Assuming that both side are competent, the personalities don't matter much. The stuff that says a certain personality type trumps another is not worthwhile.
• There are no style points, and it doesn't matter if you enjoy yourself. It's just about whether you get a good result.
• We don't do gimmicks in here, and we don't do haggling-- good professional negotiators don't need to engage in these things. Being unreasonable might work some of the time, but there are risks associated with it.
• We are hired to do better than just splitting the difference, so we want to do what we can to avoid devolving into a money-only situation. Haggling doesn't make you better-- it makes you worse by capping values at the midpoint, and depriving you of the chance to do better.
• Shifting values in haggling aren't an explanation; they're not a reasoned approach. You want to have enough better ideas that you don't fall back on just plain haggling.
• Negotiations are not an end in themselves-- they're a means to an end. The client decides what ends to seek. We are agents, and that means our authority is limited by what is conveyed to us by the client. We need to know what we're entitled to agree to, and where the limits are (sometimes that means we have to undertake our own give-and-take with the client, in order to find it out).
• It's hard to function in a void-- we need to get commitments one way or another from our clients, or else we don't know what we can and can't agree to. This means knowing what the client wants. It isn't and shouldn't be a money-only issue.
• It's important not to substitute our judgment for the client's. Our job is to do what the client wants us to do.
• This means that you also need to know what the other side has the authority to agree to.