Some people love negotiating and some people hate it. Some people are really good negotiators and some people are not so good. Sharpening your negotiating skills will go a long way in helping you represent your clients. This is especially true in a mediation, where your negotiating skills (or lack thereof) are on full display for your client to see.
In recent decades, psychologists have learned a lot about negotiations. One of their most important insights was labeled the “anchoring bias” – an initial offer, no matter how arbitrary, becomes an “anchor” that pulls the negotiation in its direction. As a result, planning your negotiation is critical. Misssteps at the beginning can become an anchor that eventually sinks your negotiation.
This anchoring bias can be used to good effect by expressing offers in a range as opposed to a single figure. In a recent article in Negotiation Daily, Katie Shonk, does an excellent job describing the anchoring bias, using a negotiation to buy a car as an example. www.pon.harvard.edu/daily/negotiation-skills-daily/anchoring-bias-negotiation-get-ahead-range-offer/
The car has a fair market value of $5,000 to $6,000 and the seller opens with an aggressive $7000 first offer to sell. The researchers then described three (3) types of ranges built around the target price:
Bolstering range: A bolstering range includes the single-figure offer at one end and a more ambitious number at the other end $7000 - $7500
Backdown range: A backdown range has the single figure at one end and a less ambitious figure at the other end $6500 - $7000
Bracketing range: A bracketing range spans the single-figure offer, e.g., $6800 - $7200
Note: This is a far cry from the “bracketing” that is often simply an attempt to undo the damage done by making initial proposals that are so unrealistic that they undermine the credibility and trustworthiness of the negotiator.
In research that examined negotiations in which subjects employed one of these strategies, the bolstering range strategy produced some important advantages.
Buyers who received bolstering-range offers made greater concessions and more conciliatory counter-offers than did those who received the other offers. The bolstering range also suggests a degree of flexibility and accommodation, and, when strategically formulated, avoid damage to a party’s reputation that comes from making unrealistic proposals. Research suggests that ranges of 5% to 20% of the base figure appear to work best.
TWO TIPS TO ENHANCE YOUR NEGOTIATING PROWESS:
1. Involve your client from the beginning in developing a negotiating strategy that is realistic and flexible – as the case goes on, things change +/-. Keep in mind that there is a negotiation that goes on between a lawyer and her client and an anchor can drown that relationship, too.
2. Resist the temptation to put numbers in play prematurely. Wait until you (and your client) understand your case and have a negotiating plan before you introduce money into the conversation.