Lawyers negotiate all day, regardless of whether they are involved in a formal negotiation. In fact, we all negotiate in both our professional and personal lives: that is the nature of social interaction.
However, legal negotiation is a unique creature. Lawyers act as agents not principals in negotiations, requiring a specific skill set. Both law firms and in-house counsel can’t afford not to impress their clients with their negotiating expertise. Understanding the skills required for a legal negotiation requires an in-depth understanding of our role in the process.
What is our role as lawyers? Clients don’t just want us to ‘translate’ an agreed commercial position into legal documentation… our legal expertise is a given. In addition, they expect us to understand their underlying motives, their business environment, the short and long-term consequences of any one deal, their relationships with the other parties, when to revert to them (and when not to)… the list goes on and provides the backdrop to how negotiations should be conducted.
Legal negotiations also differ in that they are contentious or non-contentious. In contentious negotiations, the outcome is not completely within the negotiating parties’ control as the lawyers must bear in mind the court process and the court’s likely attitude to how negotiations have been conducted. In transactional matters, there is more potential for the parties to have shared interests. There is also greater scope in non-contentious discussions to change the negotiating party. The seller of a business could, in theory, find another purchaser.
Due to the multiple business stakeholders involved in a transaction, it is also often a challenge to discover who is really driving the transaction terms. Does the board of directors have a different perception to the one director you receive instructions from on a daily basis? Is the procurement department adversely affecting this negotiation in the interests of consistency? A lawyer’s role involves mediating between these stakeholders and assessing the nuanced motives of the other side’s stakeholders. Clients expect lawyers to be holistic and cognisant of the need to bring other stakeholders along in the process.
This one day course, run by an ex-corporate finance solicitor, directly addresses the issues at the core of legal negotiation by asking delegates to consider 3 central questions:
This focuses on understanding your own effectiveness as a negotiator, assessing your client’s needs and trying to get to the heart of your opponent’s motivations.
In terms of individual skills, it is well recognised within the learning and development industry and social science that skills are learnt through practice and self-evaluation.
Recognising that the issues to be decided upon should be separated from the personalities involved is the first step. Next comes working out possible solutions to the issues at hand and being prepared to adapt to changes and new information.
Abraham Lincoln once said “if I had eight hours to chop down a tree, I’d spend six sharpening my axe”. Part 3 emphasises the importance of effective preparation for effective negotiation.
|Training Course||Training Course Summary|
|Advanced Financial Issues in Acquisition Agreements||Understand the key differences between Enterprise and Equity Value|
|Advanced Negotiation Issues in M&A||Get to grips with the tactics for managing the advisors in the deal|