Tuesday, July 17, 2012

Latz on negotiations

Dear James,

Hope you enjoy my July Arizona Republic Negotiation Column.
Sometimes ’principles’ aren’t set in stone

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 their 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 someone is faced with better offers.
Marty Latz is the founder of the Latz Negotiation Institute, a national negotiation training and consulting company and the author of Gain the Edge! Negotiating to Get What You Want:

He can be reached at 480-951-3222 or at Latz@NegotiationInstitute.com.

To order Marty`s book, Gain the Edge! Negotiating to Get What You Want, click or paste this link into your browser:


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Latz Negotiation Institute (LNI)
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6242 East Shangri La Road
Scottsdale, Arizona 85254
w. 480.951.3222
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e. Latz@NegotiationInstitute.com

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