Everyone wants to be a better negotiator. The question is how to effectively do it.
Like everything else, the art of negotiation starts by having a conversation. It’s about being respectful, finding common ground, knowing what you want, and most importantly- listening.
Still, a conversation between two lawyers can be complicated at best. By employing a few techniques and tactics, it doesn’t have to be that way.
Many lawyers will prepare for days for a deposition but will not prepare for the most important aspect of the job — negotiating what the client really wants.
Before making a phone call or, ideally, meeting in person, think about the following:
- What is the goal of the meeting?
- Have I practiced what I’m going to say?
- What will the other side likely say?
Then role play and practice before the meeting, as if you’re preparing for your day in court.
Meet in person.
People rely too much on email these days. That can be fine for follow-up. Many times it’s more effective to meet in person first to gather information before drafting a letter. Meeting in person also helps to reduce posturing and allows you to gauge the opposing lawyer’s reaction.
Master the technique of using pauses in discussion. Silence is an effective strategy.
Break the ice.
At the start of the initial meeting, begin discussing something not related to the case, and find some common ground. Maybe it’s where you both went to undergrad or law school, people you know in common, an upcoming trip, or if you’re really desperate, the weather. Just find something.
Listen and be a detective.
Everyone likes to talk. Everyone wants to be heard. Be a detective in the first call and gather as much information as possible. Let the other side talk, and try not to only argue.
Getting the other side’s perspective is important before making an assessment. If you shut down the dialogue, then you can’t accurately assess the strength of the case. Instead, ask questions and show a willingness to provide information. Keep in mind, there typically will be a lot more shades of gray than black and white.
The more information you can gather, the greater chance you have of creating a meaningful conversation with your client about the claim and setting reasonable expectations of where to begin negotiations.
That’s why, the majority of the time, it’s usually best to not give a demand during the first call.
Accurately assess the value of a case based upon risk assessment.
Employers win approximately 70 percent or more of all employment cases nationwide. Very few employment cases go to trial, and there are caps on damages for many types of cases.
For example, in a discrimination case against an employer with 70 employees, the maximum recovery allows for back pay and $50,000 in compensatory and punitive damages; that’s even if the client wins at trial. So, if the back pay is $20,000, the maximum amount to the client is $70,000.
That’s not going to be a realistic outcome to the client.
The real issue is whether the employer will prevail on summary judgment. Since employment lawyers often motion to have their case determined by a judge, you have to show the other side that you will prevail in summary judgment. Negotiating an early resolution then becomes a new ball game.
Make a logical move.
One of the biggest mistakes lawyers make is making too high of a demand or offering an insulting, low-ball offer that might cut-off real dialogue. Instead, make a high but reasonable initial offer to start the negotiation process.
For example, during a wage case where we sued a company for failure to pay overtime, the other lawyer initially called and said the case wasn’t worth much, put out a low-ball offer coupled with a comment about how the client wasn’t doing well financially. I rejected the offer and amended my client’s complaint to add the owner, individually.
The opposing lawyer achieved nothing, antagonized me, and ultimately caused his client to be sued individually.
Understand the role insurance companies play in the negotiation of claims.
Insurance carriers play a large part in the negotiation of employment claims. Approximately 30 to 40 percent of employers have insurance coverage for employment claims via Employment Practices Liability Coverage. This insurance covers discrimination cases, harassment claims, FMLA claims and other types of employment claims. Wage claims sometimes are excluded. Typically, in cases where the company is covered, the company is more likely to settle.
It’s important to understand that adjusters view cases very differently from employers. Insurance companies tend to make cost-benefit decisions instead of having the emotions of the underlying decision makers. While many companies worry about setting a bad precedent and their underlying ego, that’s not on the radar for insurance adjusters.
Many insurance companies have a hammer clause they implement if the employer rejects the settlement recommended by the insurer; the insurer may cap the liability and exposure. If that happens, the insurer will only cover the fees and liability up until that date, including the rejected settlement demand. Any liability the employer incurs after rejecting the settlement will then become the employer’s sole responsibility to pay.
Try different tactics to negotiate past an impasse.
If the negotiation train is not going anywhere, you have to find a different track.
- Change the format of the dialogue. If all the negotiations have taken place in writing, try meeting the other lawyer in person or have a candid phone conversation. Lawyers are sometimes lions in letters, lambs in person.
- Focus negotiations on interests rather than positions. That means finding the underlying benefits for both parties to keep the negotiations moving forward to finality. Remind the other party that this prevents litigation and avoids extensive legal fees, wasting time and energy, and an overall disruption of business.
- Tell the other side that it’s the job of the lawyers to help both parties come to a mutual agreement. Then align yourself with the other lawyer to advocate for a “deal.”
- Propose using a third-party mediator to come in to move both parties to finality. With so few cases going to trial, mediation is often a client’s day in court. It’s a great way to get everyone to focus on the settlement in a single day.
Know that a final offer might not really be final.
Sometimes an offer is final and sometimes not.
You have to listen for verbal cues and try to get “more gravy on top.” If the parties are close, test it out. For example, if I’m at $70,000 and the other side says $50,000 is the final offer, I’ll recommend we split the difference at $60,000.
If that doesn’t work, then call the other side out. Reinforce how they aren’t advancing our collective clients’ interests. Make sure to remind them if we continue in a stalemate we will land in litigation, which eventually costs more, especially when customers and employees are involved.
Then use the “I’ll push my client, if you push yours” mentality.
If the offer is truly final, ask the other side to put it in writing. Then you can share it with your client. Keep in mind, many clients often think final offers are not truly final.
Understand there is compromise in negotiation.
There needs to be movement. Both sides need to be reasonable for a resolution to work.
No one wants to look bad in front of a client. But if you’re dealing with a playground bully, you have to stand up to him and call him out. Sometimes the bully will see cooperation as a sign of weakness, which is why it’s even more important to take a firm stance.
Delaying, hiding information and being unreasonable usually won’t work. If it’s a real problem, raise the issue with the court, especially if the other side is being completely inappropriate or out of line.
Judges typically recognize this type of bad behavior. For example, in a FMLA case I handled, the court awarded us $450,000 in fees. Why? The court said the other side was being unreasonable in their positions. They scorched the earth during the litigation, which resulted in the court stating they only had themselves to blame for the fees.
With any type of negotiation, take the high road. Otherwise, you will be brought down into the mire with the other side.