A HARD BARGAINER IS A PERSON
WHO:






Opens negotiations with an extreme competitive
offer/solution
Frames the negotiation as “my win is your loss”
Uses a number of tactics to create doubt for the
opposition
Makes diminishing incremental concessions over
time
Creates tensions/impasses
If the last gap is reached splits the difference or
adjourns
1
AN “EFFECTIVE” HARD BARGAINER?


Is not one who “wins”!
Is a person who regularly achieves for his/her
clients, short term and long term commercial
and personal goals, despite the risks attached
to the “hard bargaining” process.
2
“A careful examination of the behavior of even the
most forthright, honest, and trustworthy negotiators
will show them actively engaged in misleading their
opponents about their true position…. To conceal
one’s true position, to mislead an opponent about
one’s true settling point, is the essence of
negotiation.”
(White, James J., Machiavelli and the Bar: Ethical Limitations on
Lying in Negotiation, 1980
AM B Found Res J. 926-930)
3
“On one hand the negotiator must be fair and
truthful; on the other he must mislead his opponent.
Like the poker player, a negotiator hopes that his
opponent will overestimate the value of his hand.
Like the poker player, in a variety of ways he must
facilitate his opponent’s inaccurate assessment. The
critical difference between those who are successful
negotiators and those who are not lies in this
capacity both to mislead and not to be misled…”
(White, James J., Machiavelli and the Bar: Ethical Limitations on Lying in
Negotiation, 1980
AM B Found Res J 926-930)
4
TEN RULES TO BE AN EFFECTIVE HARD
BARGAINER
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
DIAGNOSE CAREFULLY (ie pick your fights).
PREPARE, PREPARE, PREPARE (especially BATNA).
Prepare colloquial catalogue of “DOUBTS” to lower
expectations.
CONTROL PROCESS
KNOW and TEACH “the DANCE”.
ASK QUESTIONS.
DISCLOSE INFORMATION SELECTIVELY.
UNITE and DIVIDE “TEAMS”.
SELECTIVELY USE “TACTICS”.
KNOW and AVOID the COMMON MISTAKES AND
PSYCHOLOGICAL TRAPS.
5
RULE 1 – DIAGNOSE CAREFULLY AND
CONTINUALLY
BEWARE OF COMPETITIVE/HARD BARGAINING
WHERE:
￮ CONTINUING RELATIONSHIPS are important
￮ SPEEDY OUTCOME is necessary
￮ WATNAS and BATNAS are uncertain or risky
￮ The “opposition” are TIME RICH ZEALOTS
￮ ESCALATION or LONG TERM BITTERNESS are FEARED
￮ “VALUE IS SLIPPING OFF THE TABLE”
￮ LEGISLATION and CASE LAW IMPOSE SANCTIONS
￮ IT CROSSES VAGUE BUT EXPANDING ETHICAL
GUIDELINES
6
HARD BARGAINING – “A PUDDLE IN THE SUN”
IN AUSTRALIA? (Cavanagh)
Informed
Customers
Professional
Discipline
Trade Practices
Act
“NORMAL”
COMPETITIVE
BEHAVIOUR
Legislation
Ethics
Duties of
Disclosure
Meaning of
“Good Faith”
7
THE MORAL CODE OF PROFESSIONAL RESPONSIBILITY
(ADAPTED BY ABA)
A LAWYER SHALL NOT:

KNOWINGLY ADVANCE A CLAIM OR DEFENCE THAT IS
UNWARRANTED UNDER EXISTING LAW EXCEPT HE MAY
ADVANCE SUCH A CLAIM OR DEFENCE IF IT CAN BE
SUPPORTED BY GOOD FAITH ARGUMENT FOR AN EXTENSION,
MODIFICATION OR REVERSAL OF EXISTING LAW.

CONCEAL OR KNOWINGLY FAIL TO DISCLOSE THAT WHICH HE
IS REQUIRED BY LAW TO REVEAL.

KNOWINGLY USE PERJURED EVIDENCE OR FALSE EVIDENCE.

KNOWINGLY MAKE A FALSE STATEMENT OF MATERIAL FACT
OR LAW.

NB: A LAWYER GENERALLY HAS NO AFFIRMATIVE DUTY TO
INFORM AN OPPOSING PARTY OF RELEVANT FACTS.
8
“UNDER GENERALLY ACCEPTED
CONVENTIONS IN NEGOTIATION, CERTAIN
TYPES OF STATEMENTS ARE NOT TO BE
TAKEN AS STATEMENTS OF A MATERIAL
FACT. ESTIMATES OF PRICE OR VALUE
PLACED ON THE SUBJECT OF A
TRANSACTION AND A PARTY’S INTENTION AS
TO ACCEPTABLE SETTLEMENT OF A CLAIM
ARE IN THIS CATEGORY”
(COMMENTS ON ABA MODEL CODE OF
PROFESSIONAL RESPONSIBILITY)
9
NEGOTIATORS ADOPT COMPETITIVE STRATEGY
WHEN:
1.
2.
3.
4.
5.
6.
7.
One believes (s)he has “nothing to lose”
Need to preserve a “tough” reputation to avoid
floodgate
Needs to be consistent with past decisions
Substantial emotion and grief exists
There is no concern for the future relationship
between the parties
There is perceived benefit in delay
One perceives (s)he has bargaining “power” (strong
WATNA and BATNA) and can dominate the other
10
RULE 2 - NEGOTIATION PLANNING INSTRUMENT
“PROBLEM” DEFINITION – I must negotiate with ……………….…….. to solve the
following problems.
(1)
(3)
PARTY
GOALS,
INTEREST
S and
PRIORITIE
S
(2)
(4)
Positions
(SOLUTIONS)
1.Insult
2.Target
3.Reservation
PERSUASIVEP
ROPOSITIONS
and LEVERS
APPROACH
TO
NEGOTIATIO
N
OPENING and
CONCESSION
S
CREATIVE
OPTIONS/
PACKAGE
S
‘OUTSIDE’
ALTERNATIVE
S (BATNA;
WATNA)
OWN
SIDE
OTHER
SIDE
11
CLAIMANT
INSULT
ZONE
TARGET
ZONE
RESERVATION
ZONE
RESERVATION
ZONE
TARGET
ZONE
INSULT
ZONE
RESPONDENT
12
RULE 3 – PREPARE “DOUBTS”
CREATING DOUBT IN NEGOTIATION AND MEDIATION
CONCEPT
1.
FACTS – “I have different facts….”
2.
EVIDENCE – “I have a document to show….”
3.
CREDIBILITY – “who is more likely to be
believed….?”
4.
RULES – “You are applying the wrong rules….”
5.
RULES – Insider knowledge: “That is not how the
system works here….”
6.
PUBLICITY/REPUTATION – “What happens when
this becomes public?”
7.
DELAY –“If we don’t agree today….”
8.
COSTS (Direct) – “The predicted costs of lawyers and
accountants are….”
9.
COSTS (Indirect) – “How much time away from
business….”
10.
STRESS – “How much sleep….?”
APPLICATION?
13
11.
12.
INCONVENIENCE FOR THIRD PARTIES –
“How will your children, boss, friends, feel when
subpoenaed, notified….?”
NOTHING TO LOSE – “(S)he will eventually
wear you out/stone in shoe….”
13. POWERFUL – “My client has money and
connections”
14
FLOODGATE – “I cannot create a precedent for
….”
15.
OUTSIDE INFLUENCES – “My
constituents/members/boss insist that….”
16.
ALTERNATIVES – “I can do better elsewhere….”
17.
GOOD COP/BAD COP – “Deal with me or
else….”
18.
EXPERTISE – “Our expert knows more X than
yours”
19.
LOSS OF CONTROL and ESCALATION – “If we
don’t reach agreement, this is the likely
scenario….”
20.
RATIONALITY – “You seem to assume that the
court, club, system, is wise and rational….”
21.
OTHER?
14
TRYING TO “CREATE DOUBT” FOR “THE
OPPOSITION”









“Predictably, I disagree with everything that Jane said except for her fourth
comment.”
“Bill has suggested that there are 7 risks for us. I would like to respond at an
appropriate time to each one of these.”
“I have a one-page document here which has anticipated everything Mary has just
said, and gives our responses in point form.”
“We have heard all of this before and responded in detail in the letters, pleadings
dated….” “We have never heard any of this before. Why?”
“David has suggested that my client carries some risks. I agree. But we say that
these are miniscule compared to the four burdens you carry.”
“Joanne has suggested that my client carries 5 risks. In fact, she has missed 3
others. We have carefully weighed these up in our written risk analysis.” (waves
paper)
“People who live in glass houses should be careful about throwing lists of risks.”
“I would like to put our responses up on butcher’s paper so that they are clearly
visible for the rest of this meeting.”
“Thank you for those comments, I’d like to move on now….”
15
RULE 4 – CONTROL THE PROCESS
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Pre-conditions for negotiation
Schedule meetings at your convenience
Lower expectations early
Speak first and politely; “I can help”
Reduce expenses of inevitable adjournments
Regular breaks with team
Ask “opposition” to prepare documents/witnesses
Make alternative offers
When faced with aggression, revert to process and calmly
discuss needs and interests
Don’t walk out; always get something (eg documents; next
meeting)
16
RULE 5 – KNOW AND TEACH ‘THE DANCE’
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
Be polite and clear
Start high/soft on edge of insult zone
Objective criteria
Ask many questions
Create doubt
Never made a concession without getting something in
exchange
Each concession takes twice the time; and is half the
previous one
Don’t try to shortcut the dance
Near resistance point, ask, the “apart from money?” question
Break pattern at your resistance point
Adjourn (get something); or use standard methods to cross
last gap
17
NEGOTIATION PROCESS
*
*
*
*
*
*
*
*
*
*
PREPARE IN WRITING; Practise Roles
Introductions
Discuss/Suggest Procedure
IDENTIFY Agenda Items (Interests; Problems; Questions)
IDENTIFY any easy common aspirations/agreements
FIRST OPENING/OFFERS
- High Soft / Low Soft
- Reasonable FIRM
- Problem Solving
RESPONSES
- High Soft / Low Soft
- Reasonable FIRM
- Problem Solving
JAM; STRESS; CREATE DOUBT; RESTATE and REASSESS GOALS
and INTERESTS; BATNA; ASK QUESTIONS; BREAK
MORE OFFERS, “WHAT IF…”; GRADUAL CONCESSIONS
PARTIAL or COMPLETE AGREEMENT; HOMEWORK?
FINETUNE IN WRITING
18
RULE 6 – ASK QUESTIONS
Why?
1. To discover opposition’s current target and
resistance points
2. To lower oppositions current target and
resistance points (create doubt)
3. To avoid “group think” in your own team on
WATNAS and BATNAS
4. To search for extra chips
5. To demonstrate empathy
19
RULE 7 – DISCLOSE INFORMATION
SELECTIVELY
Exercise
Write out at least three methods whereby “effective” negotiators you have met make “selective
disclosure”
1.
………………………………………………………………………………………………………
………………………………………………………………………………………………………
……………………………………………………………………………………………………...
2.
………………………………………………………………………………………………………
………………………………………………………………………………………………………
……………………………………………………………………………………………………...
3.
………………………………………………………………………………………………………
………………………………………………………………………………………………..........
……………………………………………………………………………………………………...
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RULE 8 – UNITE AND DIVIDE TEAMS/CONSTITUENTS/TRIBES
HAWKS 2
HAWKS 1
CLIENT 2
CLIENT 1
MODERATES 1
MODERATES 2
DOVES 2
DOVES 1
“NO TEAM IS UNITED”
21
RULE 9 – SELECTIVE USE OF TACTICS










making an extreme opening offer
using threats, rudeness, hostility, rigidity and
intolerance to intimidate
using silence strategically
issuing ultimatums
stalling
withholding concessions and information
claiming lack of authority
stretching the facts
playing good guy/bad guy,
adding “irrelevant” give-away chips
22
GOOD COP/BAD COP ROUTINE
Examples?
Solicitor
Lawyer
Disputant
Middle Manager
Client
Worker
Expert Witness
Client
Individual
─
─
─
─
─
─
─
─
─
Barrister
Accountant
Spouse
Boss
Lawyer
Union Leader
Lawyer
Evaluative Mediator
Same Individual!
23
RULE 10 – KNOW AND AVOID THE COMMON
MISTAKES AND PSYCHOLOGICAL TRAPS
DECISION-MAKING SHORTCUTS AND TRAPS (FOR NEGOTIATORS AND
OTHERS)

The ANCHORING TRAP: Over relying on first thoughts

The SUNK-COST TRAP (ENTRAPMENT): Protecting earlier choices

Mythical FIXED-PIE beliefs

The STATUS-QUO TRAP:
Keeping on keeping on

The CONFIRMING EVIDENCE TRAP: Seeing what you want to see

The FRAMING TRAP: Triggering a premature answer with the wrong question

EASILY AVAILABLE INFORMATION TRAP: “What an impressive chart!”

The WINNER’S CURSE: “Perhaps we could have done better?”

The OVER CONFIDENCE TRAP: Being too sure of your knowledge and ability

The BASE-RATE TRAP (The Law of Small Numbers): Neglecting relevant
information

SELF-SERVING BIAS: Environment versus personality

IGNORING OTHERS’ INTERESTS AND PERCEPTIONS: “Let’s get down to
business”

REACTIVE DEVALUATION: Ridiculing “opposition’s” ideas and behaviour
(See Lewicki (2003); Smart Choices 1999)
24
STANDARD COMMENTS THAT HINDER
NEGOTIATIONS













“It’s only money!”
“The other side won’t take the risk”
“We can agree on the facts”
“Let’s not dwell on the past”
“It’s not personal”
“We don’t apologise”
“Leave it to me”
“I’m in the box seat here”
“Don’t talk to the other side”
“Our expert will win for us”
“I’ve just come here to listen”
“Get an offer from the other side first”
“This is an open and shut case”
25
EFFECTIVE RESPONSES TO POSITIONAL
BARGAINERS
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
Discover reputation beforehand
Detailed risk-analysis; BATNA and WATNA
Must have planned alternatives
Withdraw all existing offers
Make transparent first offer; problem-solving or insult zone
Ignore offer; or name strategy
Lower speed expectations of our clients and team (“normalise”)
Hand over written list of common goals; your strengths; their
perceived weaknesses
Split their team, several lines of communication
Only conditional and reciprocal concessions
Minimise expenditures
Suggest independent expert with joint facts
Occasionally, respond with tactics
File early for benefits of information exchange and door-of-court
26