Negotiate Like a Trial Lawyer
The Set Up
We’ve talked about diagnostic questions before. Open-ended inquires that probe your negotiation partners’ needs, desires, fears, priorities and preferences.
What were you expecting to get out of this deal?
What needs to happen for you to get what you want?
Who would be helpful in achieving this result?
How can I contribute to your initiative?
When do you anticipate achieving your desired goal?
All well and good. But what do you DO with the answers to these questions?
You craft a line of further questions that will get your bargaining partner to commit to facts that will help you sell your proposal. And you do so in such a way that it will be difficult, if not impossible, for your negotiation partner to walk back what s/he’s already committed to.
What you do is set your bargaining partner up for a “kill.”
I know this doesn’t sound like happy win-win, kum-by-ya marshmallow roasting mutual benefit negotiation but sometimes your negotiation partner is genuinely an adversary and needs to be treated like one.
To set someone up for a “kill” requires closing all doors of escape from the commitment you want your negotiation partner to make on the path into a box canyon of their own creation.
A Commitment that’s Impossible to Walk Back
Many years ago, I mediated the resolution of a buy-out dispute between business partners. The buyer, who wanted to reduce the price offered for his partner’s share in the business, was predicting a decrease in sales and the eventual ruination of the business by a new competitor in the field.
The seller wanted to lock in the buyer’s commitment to a low- to no-profit future. The seller believed the buyer was dissembling about his projections. In fact, he believed the buyer knew that the business would survive the new player’s entry onto the playing field. Not only survive, but prosper.
Do they really have a winning hand?
Call Their Bluff
Challenge Your Opponent to Bet on His Own Prediction
One of the sticking points in the negotiation was the seller’s share of profits for a five-year period after the purchase. They’d agreed on a five-year pay-out of the total purchase price. They’d also agreed on the concept of post-sale profit-sharing.
But they were at impasse over the percentage of profits to be shared.
Toward the end of the negotiation, the seller set a trap for the buyer. He got the buyer to commit in the strongest possible terms to his belief that the business wouldn’t survive for more than three years. The rest of the conversation went like this:
Seller:. So you believe you’ll be out of business in three years and that profits will decline 20% every year until then.
Buyer: That’s why I’m suggesting the business is only worth $X, not anywhere close to the $Y you keep pushing me to accept.
Seller: So if the business is dead by year four, and decreasing in value in years one through three, you wouldn’t object to a progressive increase in my share of the profits over the five year period . 50% of profits in year four would be zero to you. So let’s agree on a schedule that begins at ten percent, then twenty, thirty, forty and fifty, all of which shouldn’t be a problem for you as profitability falls and the business ceases to exist.
Buyer: Well, of course, there’s always some chance that we’ll fight off the competition.
Seller: So you acknowledge that the value of the business shouldn’t necessarily be decreased today because of certain losses and eventual failure in the future.
When asked to stick to his assumptions or accept a deal based on his projections, the buyer had to back off his low-value estimate. It brought the parties back to reason and they eventually agreed on both price and post-sale profit.
And that’s how you negotiate like a trial lawyer.