Improve Your Negotiations With The 5 Golden Rules.   LEARN THEM

“He’s hired me to represent him in these negotiations. But he’s holding out and not telling me everything. It’s like he’s negotiating with me – yet we’re on the same side. And the result is counterproductive for both of us. What should I do?”

Lawyers, investment bankers and other agents negotiating on behalf of others face similar situations frequently. And it’s almost always a lose-lose proposition. Here are some suggestions if you’re the lawyer, agent, or client.

1.     Effective strategies require openness within the team

Clients that hold their cards close to their vest even with their teammates – especially if they have hired those teammates/lawyers/agents as their designated professional negotiators – are tying their representatives’ hands behind their backs.

Years ago a 45-year-old seller told me he wanted to sell to a private equity group that could grow his company to a much greater degree than he could. He also said he really enjoyed being in his business and had no interest in cutting back upon selling.

Critically, possible buyers needed him actively involved due to his substantive expertise, industry relationships, and because the company was branded to him personally

In negotiating with a private equity group with a very attractive bid, I communicated my client’s interest in staying involved. They took this to heart and offered a big chunk in cash upfront plus a much greater amount if the business hit certain future milestones – milestones it would not likely hit without my client’s participation.

My client, unfortunately, asked me to push back hard and request a lot more upfront with less due upon hitting the milestones. While I thought we could reasonably request a bit more upfront, I told him pushing back too hard on the cash portion would send the wrong message – that he just wanted to get out early and/or he really wasn’t confident about the business’ long-term prospects.

He insisted we push back super hard, so we did. The potential buyer then got cold feet and walked away from the deal. I later heard my client had withheld from me critical information regarding his goals and interests in selling.

2.     Credible, trusting relationships overcome these challenges

Lawyers and agents with long-lasting, credible and trusting relationships with their clients rarely face these problems. Why? These clients are much more comfortable sharing their true needs, interests and strategies with their trusted advisors.

How can you develop such relationships? Several years ago I wrote a column on this subject based on book I recommended called “The Trusted Advisor.” Here’s a summary of those recommendations:

  • Actively engage with your client from the start;
  • Truly and deeply listen to their needs and concerns;
  • Frame their needs so they know how well you understand them;
  • Envision what success looks like for them; and
  • Get a realistic commitment from them to take the steps necessary to achieve their goals.

3.     Mutually develop written Strategic Negotiation Plans

Clients often just don’t know what negotiation-related information to share with their agents and so might inadvertently fail to disclose highly relevant and crucial negotiation intelligence. And many agents might fail to ask their clients the right questions or probe deeply enough to get to their true needs and interests and to find out other critical negotiation elements.

The solution: Brainstorm together to mutually develop a written Strategic Negotiation Plan that comprehensively ensures you address the critical strategies recommended by the experts’ proven research.

Although this won’t guarantee transparency between teammates, it will increase the likelihood that you will fill in strategic gaps that might otherwise remain open. Plus, brainstorming at this level is often fun.

That will also help develop that trusting relationship.

Published September 7, 2014 The Arizona Republic

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