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Mediation Negotiation 101

July 4, 2011

Negotiation is not rocket science.  Negotiating to sell (or buy) a “product” in mediation,  a legal dispute, is not nearly as difficult as many mediating parties make it.

However, a fundamental review course,  “Mediation Negotiation 101”, seems appropriate and timely to offer for those sellers or buyers who may have missed their original course.  Or, for those who just want to make sure they are in tune with others who are more successful.

Any negotiation for a seller must begin with simply fairly pricing your product, initially.  In the legal mediation setting, that means  placing an opening value upon your position that is perceived by your opposition as “high, yet fair, under some circumstances”.

And, you must also assume your opposition has reasonable knowledge of the range of fair for your product, or you will be wasting your time and opportunity by losing your buyer’s interest in even trying to purchase your product.  See my earlier education blog posting, “Putting The For-Sale Price on your ‘Horse'”, January 31, 2011.

This initial pricing step also includes adequately supporting your initial pricing with facts and law that your opposition must concede as correct.  In the mediation setting this is normally done prior to mediation by exchanging, timely, those facts and law (and demonstrative exhibits) that you wish your opposition to consider.

And, then, you must highlight your position with an effective Opening Statement that merely emphasizes your strengths while disarming your opposition by concession  of selective portions of your obvious weaknesses.  The latter is difficult for advocates, but ultimately essential for the credibility necessary for successful mediation technique.

The next phase of negotiation is the opposition-buyer’s response by their initial offer to your initial pricing.  Predictably, it will be less than your initial price to set the parameters for meeting somewhere in between your initial price and their initial offer.  Predictably (but not always) it will be reflective of how reasonable they perceive your initial pricing.  See, also, “Consider The Real Estate Market When Planning Your Next Mediation Negotiation“, December 22, 2010.

The better buyers will offer a price that is perceived by the opposition-seller as  “reasonable, but low, under these circumstances”.   This initial offer will set the tone of the negotiation to follow.  Some buyer-negotiators, however, have an unvaried technique that defies any logic but their own.  But, similar to overpricing, such under-bidding on an initially fair pricing will also become a predictable waste of time.

The best sellers, however, will see any offer as better than no offer.  At least honest discussions on differences of opinion on the matter can now begin.

The sellers next quandary becomes how to respond to the buyer’s initial offer.  Here is where the better sellers (and the better buyers) quickly separate.  At the very least, this is the point at which the tone of the negotiation must be set for your best result.

Some sellers feel compelled to “respond in kind” to the response of the buyer. Some buyers feel the same.  Better negotiators on both sides, however, simply have prepared and pre-considered the ultimate price at which they will sell or buy their position and move immediately to their pre-prepared methodology of reaching their own respective end-points regardless of the opposition’s involvement. 

Time is a major consideration.  Dividing the total practical time allocated for negotiation into “steps” of negotiation is an effective approach.    I also far prefer the parties to move rapidly at the beginning, toward their hoped-for goals, and then slowing as they each approach their waypoints (i.e., a point of pacing your negotiation).   Although the early stages of negotiation are important, settlements can occur only at the end.  Also, see, Don’t Run Out Of Time“, January 25,2011

Pace is another consideration.  Varying any response, up or down from a prior one, depending upon circumstances presented is one good technique of pace.   It is commonly used to convey pleasure or displeasure with the position of your opposition (if that is important to you).  Varying the time required for each response can also be effective in setting your tempo.  A quick response may suggest confidence.  A slow response may convey approaching a waypoint.

Good negotiators will be paying as much attention to each unspoken “message” conveyed as to the amounts conveyed in every response.

Most mediation participants, rightly or wrongly, equate negotiation speed with fairness and preparation.  Both are important to the oppositions’ perception of your credibility.  And, impressions, in negotiation, are also reality.  Many participants conversely perceive any delay in progress as sufficient to derail good impressions or progress previously made.

It is also important to try to make your negotiations interesting to keep the attention of your opposition.

Varying amounts of any offer proposed, and occasionally using odd numbers rather than even,  is a useful tool to reduce  predictability by the opposition.  It also can suggest close consideration being given to a specific point of your concern.

And, consider sharing a factual or legal point or two, or even a concession, or two, with each counter-proposal.  It takes time for any new idea to be accepted by your opposition.  And, acceptance of change is far easier in smaller doses than larger ones.

Knowing your final “line in the sand” position and the “last step before the line in the sand” position is extremely critical.  These are two critical waypoints that give you your complete roadmap to your perceived goals.   And, using waypoints and allocating remaining time insures that your plan of negotiation is met.

But knowing your ultimate final position, that is, the place where lower at mediation will likely/probably be lower than what you can achieve at trial, is your most important point to know in advance.  And, it can be the hardest chore for any seller, particularly where there is no precedent or comparable to your facts or law.  But it is by far the most important component of any negotiation at mediation.  See, Rule One: Know Your Alternative(s) Should Mediation Be Unsuccessful,  December 19, 2011

But, along the way, it is also imperative that you evaluate each proposal you make to your opposition as if you were receiving the proposal.  Unlike advocacy, you should care how your offers are being perceived when you are seeking mutual agreement upon a position.  And, it doesn’t hurt to follow the Golden Rule, either.  It really does work in the pressures of negotiation.

And, try to follow the lead of your mediator in seeking only the positives of each proposal not dwelling upon negatives.  As long as the parties are moving toward each other, progress really is being made.  Put your advocacy hat aside until you have no choice but to wear it again.

Your mediator is of greatest assistance, however, when both the buyer and seller have reached that point where a deal does not seem possible, but the parties are very close.  Mediators are merely guides for the parties in the early talks.

It makes sense, therefore, to move to that “nearly there” point as expeditiously as possible for your greatest chance of success.  Then let your mediator assist to convey the final “reasoning” that may have been missing to both parties up to that point and close the deal!

Negotiation is not rocket science.

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