Preparing for the Negotiation

The single biggest mistake people make during negotiation is a lack of preparation. It's incredible that people will walk blindly into a negotiation when so much is on the line. Failing to prepare is preparing to fail.

Some lawyers fail to prepare because they feel they don't know what they should prepare for. We'll give you some ideas but realize you probably know how to negotiate better than you think. You already negotiate many times a day during your interactions in life, but most people just do it and don't think too hard about it. If you have a spouse, child, auto mechanic, domesticated animal, or any friends, chances are that you have dozens of negotiations every day.

When you engage in negotiations, have a plan. Have key things that you want, understand which terms you are willing to concede, and know when you are willing to walk away. If you try to determine this during the negotiation, your emotions are likely to get the best of you and you'll make mistakes. Always have a plan.

Next, spend some time beforehand getting to know with whom you are dealing. Some people are so easy to find that you can perform a simple Google search and instantly know everything about them. For instance, Jason, in his past life as a venture capitalist, kept a blog, tweeted a lot, and wrote a book. He was very vocal about the stupidity of negotiating certain terms, as they are just a waste of a startup's money. If you were going to engage Jason, 10 seconds spent on a Google search would have told you exactly what he thought. You don't have to agree with him, of course, but when you send him a markup of his term sheet nitpicking it to death, he immediately looks down upon you. And after the venture financing is completed and he is on the board of the company, the first thing he does is start to look for a new attorney for the company.

If you learn about and get to know the other side ahead of time, you might also be able to play to their strengths, weaknesses, biases, curiosities, and insecurities.

Remember: everyone has an advantage over everyone else in all negotiations. Goliath appeared to be an immovable and unstoppable force unwilling to negotiate, but David knew a few things the big man didn't. Life is the same way. Figure out your superpower and your adversary's kryptonite.

If you are a first-year associate negotiating a term sheet against a 40-something, well-weathered, and experienced lawyer, what possible advantage could you have? The veteran lawyer clearly understands the terms better. She also has a ton of market knowledge. Sounds pretty bleak, right?

Well, yes, but don't despair. There is one immediate advantage you probably have: time. If we generalize, it's easy to come up with a scenario in which the other lawyer has a family, lots of other clients, and a slew of obligations that seep into life as you age. In fact, you found her Facebook page and you confirmed it. You, on the other hand, likely have one singular focus: this client and this negotiation. You can afford to make the process a longer one than the other lawyer might want. In fact, most experienced lawyers really hate this part of the process and will bend on terms to aid efficiency, although some won't and will nitpick every point.

Perhaps you'll want to set up your negotiation call at the end of the day, right before the lawyer's family dinner. Or maybe you'll sweetly ask the other lawyer to explain a host of terms that you “don't understand” and further put burdens on their time.

There are advantages everywhere. Is the other side a huge UCLA fan? Chat her up and find out if she has courtside seats to the game. Are they into a charity that you care about? Use this information to connect with her so she becomes more sympathetic to you. While simple things like this are endless, what matters is that you have a plan, know the other side, and consider what natural advantages you have. In a perfect world, you won't have to use any of these tools, but if you need them and don't bring them to the actual negotiation, it's your loss.