How many times have you heard in a negotiation “but it’s the principle involved”? Countless times, I’m sure. But is it really? Or is it just a subterfuge for “I don’t want to move and calling it a principle is a convenient and relatively painless way to avoid doing so.” What’s really going on?
Here are some tips on how to decide which it is and thus, how to respond.
1. Probe the principle
Don’t just accept someone’s statement that a “principle is involved.” Ask about it. Dig out the rationale underlying it. Test whether it’s true. Find out if they have consistently applied it in similarly situated negotiations or if they have made regular exceptions to it.
A potential client recently refused to pick up half my expenses on a business trip booked for another client. From its perspective, since I was already scheduled to be there for the other client, and because that other client had already agreed to pay my expenses, they felt they shouldn’t have to pay any of my expenses.
But here’s the problem, and the principle. My clients always pay my expenses and I always split my expenses proportionately amongst my clients on my trips. If I do two seminars in one day in New York City, I will charge the previous night’s hotel stay 50/50 to my two clients.
I think this is fundamentally fair – and reflects an important principle that I will not treat similarly situated clients differently.
“Wait,” you might say, “how much would that client’s share have been of your expenses and how does it relate to the loss of your fee? In short, was it worth walking?”
Well, this potential client’s share of my expenses would have been around $500 and my fee is much higher, and yes – it was worth walking. Why? Because I couldn’t in good faith have one client effectively subsidize another by paying my full trip expenses. I am just not willing to undermine this critical principle.
2. Research your counterpart’s reputation
When I was practicing law and litigating cases I would regularly ask my clients early on what they wanted to accomplish. And I would fairly often get a variation of the following – “I want to send a message to my counterpart that their behavior is unacceptable, and I am willing to spend whatever it takes to send that message.”
But then, after 6 or so months and many dollars in litigation fees, they would come to the table with a very different cost-benefit analysis.
How could I have discerned early on that the “send a message about their bad behavior” principle took a back seat to their later cost-benefit analysis? By asking other lawyers who have worked on their cases for their client’s reputation relating to this specific strategic element. You don’t have to reinvent the wheel.
3. Counter with a counter
Another way to test if the principle is really crucial is to make a more attractive counteroffer and see if or when the principle fairly suddenly loses its relevance and/or legitimacy.
Seemingly crucial principles will sometimes fade away when faced with better offers.
Published July 6, 2012 The Arizona Republic