For more detailed advice on how to negotiate effectively, check out our Negotiation course. This offers a practical insight into how to effectively negotiate, including effective preparation, key strategies, and the importance of controlling your emotions.

What is negotiation?

Many people see negotiation in binary terms: you win or you lose. But this is generally too simplistic. Negotiation is not a debate. If you don’t reach an agreement, both sides lose. Instead, negotiation should generally aim to determine an agreed course of action that at least partially satisfies everyone involved. 

With this in mind, the negotiation process should involve the parties eliciting information from one another in order to determine the issues or elements that truly matter to each side, then the parties compromising in order to reach a workable and enforceable agreement. When this approach is taken, negotiations usually run more efficiently, and conclude with each side achieving some of its objectives (often the key objectives) and conceding others (which may well have been ancillary to their primary aims). 

When might you negotiate throughout your career? 

You’ll likely find yourself negotiating right the way through your career, and not just as a lawyer. 

• As an employee, you may need to negotiate deadlines on a daily basis if you’re balancing heavy workloads for multiple supervisors. 
• You might need to negotiate your holiday days with supervisors or other team members, especially if you work in a small team that can’t afford to lose multiple employees at the same time. 
• You might negotiate your salary and bonus structure as you move between firms and up the ladder. 
• If you leave or are fired, you might find yourself negotiating a settlement agreement, and not just some kind of financial payment, but the extent of any restrictions you’ll need to agree to (for example, the duration of any restriction on your ability to work for competitors). 
• If you transition into a management role, you might need to negotiate budgets for your team, be that budgets for new hires, equipment, training or socials. 
• You may also need to negotiate with clients: fees, deadlines, free services and so on. 

Of course, commercial lawyers are also regularly involved in legal negotiations. For example, dispute resolution lawyers may negotiate settlement agreements. Transactional lawyers often negotiation transaction documents, including any proposed contractual protections. Employment lawyers may negotiate the terms of employment contracts. Trainees may negotiate non-disclosure agreements or engagement letters. The list goes on.

How to prepare for a negotiation

If you’ve ever come out of a discussion and thought to yourself “why did I agree to that?” or “why did I not argue that point?”, give some thought as to why. Were you too nervous or intimidated? Were you too concerned about upsetting the other person? Or did you perhaps get side tracked and miss out on the opportunity to put forward your opinions? 

We’ve all been there, but how can we ensure that we take a more positive approach in the future? How can we be more persuasive? Well, understanding the key factors that can impact negotiation, including strategies that can help you to succeed, can make a real difference. And this doesn’t just apply to professional negotiations. 

Set the scene

Always consider whether it might be better to carry out a negotiation face to face (or Zoom to Zoom), rather than via written communication. Sometimes tone may come across in unanticipated ways via email, slack and WhatsApp, and this can cause things to escalate unnecessarily. In addition, try to schedule a negotiation when you know everyone involved will have enough time to properly discuss the issues. Time pressure can contribute towards a more stressful and emotional atmosphere, but a relaxed atmosphere can be more conducive to productive discussions.

Do your research

Do your homework. If you demonstrate a lack of knowledge around whatever it is you are negotiating, the other side might see this as a sign of weakness and try to exploit it. Or you might get confused and lose sight of what’s important. 

If you’re negotiating the acquisition of a business, make sure you have thought about the key risks that need to be dealt with. If you’re negotiating a salary, be sure to look into market rates in that industry. If you’re negotiating the purchase of supplies, research into the rates charged by other suppliers, and ensure you’re aware of any aspects of the current suppliers’ offering that might justify a higher (or lower) price. 

You don’t want to be blindsided by something you hadn’t previously considered. Also look into your counterparty in case they have a reputation for negotiating in a particular way. If you are aware of their preferred approach in advance, this might help you to better prepare from a strategic perspective.

Develop a coherent strategy 

When preparing to negotiate, whether on your own behalf or on a client’s behalf, you must carefully consider the key issues in play and the outcome(s) that you or your client want to achieve. If you have the opportunity to prepare in advance, make sure you are clear on which points you absolutely cannot concede, would ideally not concede and can concede if necessary, as well as any thresholds or ranges that you need to stick to (e.g. the lowest and highest price that you are willing to accept).  

Above all, be clear on your “walk away” point, meaning the minimum outcome you’re willing to accept. You see a lot of people walk towards the wall on Dragon’s Den when considering an offer. Sometimes this is probably a negotiation tactic to force the dragons to stew for a while, but in other cases the relevant entrepreneur clearly hadn’t given enough thought in advance to their walk away point. Failure to plan in this way could result in you contradicting yourself – or a team member contradicting another team member – during a live negotiation, which might lead to confusion and potentially result in the other side exploiting this confusion or your team’s lack of unity to negotiate more favourable terms for themselves. 

Finally, try to ensure you have some kind of plan in place for the negotiation, then consider kicking off the negotiation call or meeting by suggesting an agenda or process to follow throughout. For example, you might want to go through each issue in turn, or prioritise the most pressing issues. This can improve your chances of progressing efficiently and effectively.

How to behave during a negotiation

I’ve heard of all sorts of tactics used by people to try to gain the upper hand during negotiations, for example, one party arranging the negotiating table so that the sun will constantly be in the counterparties’ eyes, seating the counterparty in uncomfortable chairs, or bringing along a disproportionate number of co-negotiators to outnumber – and therefore apply more pressure to – the other side. 

However, these types of tactics often prove counterproductive, as such tit-for-tat manoeuvres can spiral out of control and negatively impact working relationships. These negotiations invariably prove frustrating and expensive for all involved, and often break down even when solutions exist that could have satisfied everyone’s interests. Now of course, different people will respond better to different approaches during a negotiation, so try to use your emotional intelligence to gauge which approaches are likely to work most effectively in a given scenario.  

Whilst an aggressive, uncooperative approach can reduce trust and amicable feelings between the parties, a collaborative and conciliatory approach is much more likely to preserve business relationships, which can be conducive to the continuation of commercial activity between the parties in the future. In other words, generally aim to negotiate “with”, not “against” the other side. Making concessions where possible can help you to win points that are more valuable and may increase the likelihood of you reaching an agreement that leaves everybody happy (or at least partially satisfied). 

That being said, you may want to avoid conceding too much too early on, as this could subsequently leave you without bargaining power when discussing other terms. You could consider negotiating an unimportant issue to some extent, so that when you then concede the issue, the other side feels as if they have won a point. You could then later leverage this concession to demonstrate how reasonable you are being.

Eliciting information

During a negotiation, try to understand the other side’s motivations. You should primarily be asking questions, listening attentively, proposing solutions and trying to brainstorm new alternatives if you and the other side can’t reach an agreement. Focusing on interests rather than positions and power tactics – and identifying areas of commonality and compatibility – may help you to reach better compromises and result in the negotiation progressing more amicably and efficiently. It really helps if you can empathise with the other side’s perspective, which involves trying to understand where they are coming from. 

Asking open questions can encourage the other side to explain their objectives and priorities, which can help to promote active discussions and clarify motivations. This in turn should increase the likelihood that both sides will remain willing to explore all possible outcomes and potential solutions. The more information you have to assess the facts and circumstances, the higher the likelihood that you will think of effective ways to compromise. So keep asking questions.

Once you have better understood the other side’s position, and any assumptions on which they are basing that position, you could perhaps challenge some of those assumptions. Doing so may help you to ascertain whether they are basing their position on incorrect information or have a particular concern or motivation of which you were previously unaware. Once you have all the relevant information in hand, you may find that there are multiple possible routes to a good outcome, and this is where you can get creative. Thinking creatively and flexibly may help you to come up with a solution that satisfies everyone involved, which can be much more productive than taking a hard-line approach.

Controlling your emotions

Over recent years, research has started to focus more on the ways in which emotions such as anger, disappointment, anxiety and excitement can impact the behaviour of parties during negotiations, and therefore the outcome of those negotiations. And the impact can be significant. I asked ex-City partner, professional development trainer, and best-selling commercial awareness author Chris Stoakes to write a forward for my Commercial Law Handbook. It was only a short piece, but he felt that negotiation – including the emotions that can underpin negotiation – was a sufficiently important topic to include the following advice:

Negotiating isn’t slamming your fist on the table and threatening to walk out of the room. That doesn’t do your client any good. Clients want things resolved. So it’s about finding out what matters to your client (by talking to them) and then finding out what matters to the other side (by talking to their lawyers) and finding a compromise. Which can be creative. 

Anxiety

The more prepared you are, hopefully the less anxious you will feel. This is important, because research shows that looking or feeling anxious tends to result in suboptimal negotiation outcomes. You should therefore do all you can to reduce feelings of anxiety when negotiating, or at least learn to control any external signs that could indicate your anxiety to the other side. Train, rehearse, and keep trying to develop your negotiating skills, as this can help negotiation to feel more routine, and therefore become less of an anxiety-inducing experience.

Anger

Research has shown that anger can disrupt the negotiation process by escalating conflict, biasing perceptions and increasing the likelihood of deadlock situations arising. It can encourage competitive behaviour, discourage cooperation, increase the rate at which offers are rejected, and ultimately result in a worse overall outcome for everyone involved. Angry negotiators are also less accurate than neutral negotiators, both in recalling their own interests and in judging other parties’ interests. So keep this in mind if you feel your temper flaring up during a negotiation. Controlling that anger, or at least limiting the extent to which you outwardly express it, should be seen as an essential negotiating strategy. 

Trying to build a rapport with the counterparty before, during and if possible, after a negotiation can reduce the chances of hostility flaring up on either side. You could also make it clear at the start that you want to work together to find a win-win solution. If anger does start to flare up during the negotiation, perhaps suggest that everyone takes a break to cool off and regroup. Resist the urge to escalate.

To that end, in legal negotiations where the parties are getting frustrated and there’s a risk of a deadlock arising, lawyers will sometimes ask the counterparty’s lawyers to check a particular point with their client before discussions relating to that point continue. This temporarily parks the point, enables everyone to calm down, and forces the other lawyers to check whether their client actually cares. This can help to avoid negotiations faltering purely because a lawyer for the other side is being stubborn for no real reason. 

Excitement

Allowing yourself to feel excessively excited about a potential deal can cause you to lose sight of what’s important and have an adverse impact on your negotiation. Moreover, even if you feel you’ve nailed it, never gloat after a negotiation. In certain situations, showing happiness or excitement can trigger disappointment or resentment in others, which can have a detrimental impact on commercial relationships in the future (or even result in the other side reneging on a deal to which they had previously agreed). The best negotiators achieve great deals for themselves, but leave their opponents believing that they too secured a great deal (even if this doesn’t reflect the reality). 

Practical tip: try all you can to control your emotions during and after a negotiation, and remain observant of the other side’s emotions throughout (as their emotions might betray their true position). You’re more likely to understand their position if you tune into their tone of voice and non-verbal communication in order to ascertain how they are really feeling. And this could help you to negotiate more effectively, perhaps by adapting your own approach.

Bargaining power

Now, I need to caveat everything I’ve just said by acknowledging that the bargaining power between parties to a negotiation will have a significant influence on what each party can get away with. A party with all the leverage, who knows that the counterparty is hopelessly dependent on them, will likely be able to get away with being far more aggressive and resistant to compromise than they would if the counterparty had equal or greater bargaining power. 

Taking an aggressive approach likely won’t help to strengthen the relationship between the parties, but parties with bargaining power simply might not care. They may just want the best result possible. So when preparing for a negotiation, it’s worth bearing in mind who has the greater bargaining power. Consider questions such as: Who is more desperate to get the deal over the line? Who has other viable options? Who can afford to walk away? If the other side has more bargaining power, think about whether there is anything you can do or say to mitigate this, for example seeking out other viable options as a backup. 

Document the outcome

Finally, don’t forget to document what has been agreed after a negotiation, whether in a follow up email or in a formal document. This can ensure everyone is clear on what has been agreed, which can reduce the chances of future disputes. After a negotiation call, I’ll typically email the other side a summary of our call, including what was agreed and any points that haven’t yet been determined. At least that way, we have a record of where we got to. This can be essential if, for example, the person you negotiated with is replaced by someone else, or if they try to pretend that they didn’t agree to a particular point further down the line.