A Mediator’s Observations On Effective Negotiations Skills and Techniques In A Mediation: Negotiate To Exhaustion
I know, it sounds like a strange term. It does not mean negotiate until you are tired or to 11:32 pm, and the cleaning crew is running vacuums under your feet. The term Negotiate To Exhaustion means:
Negotiate every term, every amount, every point until you get a "No."
It sounds obvious, and I'm sure you think you do it. However, you would be shocked how many times, as a mediator seeing both sides simultaneously, I watched as each side stop negotiating before they extracted everything they could from the negotiations.
What Does Negotiation To Exhaustion Mean?
Negotiate to Exhaustion means you keep negotiating until you receive a clear and definitive NO to all your offers/demands from the other side. This includes taking the numbers down or up as far as you can go.
By negotiating each point, and by negotiating against your self, which is no easy task to ask anyone, you have gained more for your client (an extra $5,000 and a Non-Monetary condition, the client would not have had in the first scenario). You Maximized your client's recovery!! (Great job)
BEWARE: When someone says, "Let's cut to the chase and do this deal." When this happens, the other side wants to forego detailed negotiations. This could prevent you from maximizing your client's recovery and obtaining Non-Monetary Benefits. They are trying to stop you from negotiating to exhaustion because it likely will not benefit the other side.
THE BENEFITS OF NEGOTIATING TO EXHAUSTION
The benefits of negotiating to exhaustion include:
You maximize your client's recovery
You ensure no money, terms, benefits are left "on the table"
You (and your client) are satisfied with the process because there is no doubt about being taken advantage of. You obtained everything you could from the negotiation.
You uncovered and collected Non-Monetary Conditions you would not have obtained by "cutting to the chase"
WHY IS IT SO HARD TO NEGOTIATE TO EXHAUSTION?
It is difficult to Negotiate to Exhaustion because it goes against our natural instincts, even though attorneys love to argue and negotiate. The main reasons attorneys do not negotiate to exhaustion:
It challenges our pride as negotiators
It is tedious and time consuming
Requires deftness and skill, not anger and emotions
1. Pride prevents negotiating to exhaustion
No one wants to be told NO, especially attorneys. We would rather agree to the terms than to make an offer and have the other side NO, and then accept the last demand. It's ego. It's pride. It's human nature. To negotiate to exhaustion requires confidence and mental fortitude to push for a NO and then STILL do a deal.
How many of us like to continue negotiating even though the other side refused to provide a counter-offer twice? The Plaintiff bidded against himself twice without flinching and ended with the best result. As a mediator, I rarely see this. The main culprit is as attorneys, we see bidding against ourselves as weakness.
I challenge this.
Negotiating this way takes a strong negotiator. Sure, Plaintiff was dropping without a response, but if the other side never accepted the amount, why would it matter. Plus, his client wanted to settle at $100,000.
Don't let your pride stop you from getting the best for your client.
2. Tedious and time consuming
There is no way around this. This style requires patience, patience, and patience. It requires negotiating every penny, every point, every term, every benefit. I have seen the negotiations dial down to who will draft the agreement, when the check will be sent, and even who will file the Notice of Settlement. To overcome this, you must stay focused on maximizing your clients' recovery. Plus, you should warn the mediator of your tactic and style, because many mediators can become antsy for a deal (however, I love this type of negotiating so you will never worry about me getting impatient with this style).
3. It requires skill and deftness
This style is difficult, and I rarely see it honestly. But when I do, wow, is it effective. It requires the counsel (and clients) to be unemotional and unaffected by anything the other side, which is surprisingly hard for kick-butt trial attorneys. Despite their claims, they thrive on the emotional fight. So many trial attorneys became so flustered with the other side that they either give up or settled too quickly. A creative attorney can manipulate his or her offers/demands as not to incite the other side to cut-off all negotiations out of frustration but exact every "juice from the fruit" as possible. Many times, attorneys with blunt strategies (The Bulldog negotiator, for example) cannot get over this hurdle, so the mediation ends without maximizing their client's position.
Now, at the end when you do not think there is any movement left on the other side as a question, try asking the best line, as coined by Chris Voss: "It sounds like there is nothing more you can do."
This can trigger the other side, who does not want to show ineptitude to reveal his last cards. For an in depth analysis how this works ,check out Chris Voss's article: 3 Steps to Find Out If You Left Anything On The Table.
Don't Forget: Prepare Your Client For The Negotiating To Exhaustion Strategy
This is not an easy process, and you will be forced to accept NO from the other side and you must push through with continuing efforts to settle. This is not natural, especially for clients.
When they hear NO, they hear IT'S OVER.
You need to advise him of this style and the benefits. Not only do you need to prepare you client for the process, which will be a subject of a later post, but also let him know you plan on Negotiating to Exhaustion, which will require trust on his part. He will have to sit through your efforts negotiating every point of his case, but if he or she knows beforehand, then he will be able to prepare himself for the process.
Also, before the mediation ensure you have went over all the monetary and non-monetary issues and benefits he has has. Find out what he needs, wants, and wishes. What is important, mildly important, and extremely important to him. List them to remind you during the mediation. Doing so will help you know which points to press and which points you can use to barter for what you want.
TIP: When you add other terms, such as non-monetary benefits, make sure you interject them earlier, rather than later. If you negotiate the dollar amount to an agreeable amount, you cannot then demand non-monetary benefits because the other side will feel like you are getting "greedy" and trying to take advantage. Insert the additional terms early, or run the risk of not getting them, or worse, destroying the deal.
Specific Steps To Negotiate To Exhaustion
Negotiations requires preparation just like a deposition. Prepare and have a list of all the negotiating points. Then, during the mediation, follow these steps:
At the opening establish your position
Negotiate in reasonably small increments
Lay foundation for Non-Monetary Conditions
Keep asking
When you get a NO, stay on course and boost your non-monetary conditions
When you get a second NO, keep asking and pushing
When you get a NO on everything and tried all tactics, you can do the deal because you know there is nothing left "on the table
End the mediation with the confidence you maximized your client's position.
WHAT NEXT?
I am a mediator and Special Master, who mediates throughout California and beyond. I am available for all your mediations. I can help you settle that nightmare case. You can reach me to schedule a mediation at:
3585 W. Beechwood Ave., Suite 101
Fresno, California 93711
559-431-1300
--Troy
P.S.-Get a FREE printable PDF of our
TOP 5 NEGOTIATION TIPS
(throw it in your briefcase to read while that mediator is in the other room and impress him when it's your turn to negotiate)
**This publication is provided as an educational service and is not meant to be and should not be construed as legal advice. Readers with particular needs on specific issues should retain the services of competent counsel.