Common mistakes made at the negotiation table

Negotiation is the most important skill in business to secure sustainable agreements, cement reputation, or boost profit margins. In 2013, research by YouGov found that the UK loses £17billion a year through poor negotiating… that's the equivalent of £9 million per hour.

We negotiate every day, in many different ways and with many different people. It is a fundamental requirement in reaching agreement, resolving dispute, and succeeding in business. And yet so many people get it wrong. Or avoid it. Or simply don't really know how to do it well. And this goes for lawyers too.

The danger is, everyone assumes that all lawyers must be brilliant negotiators…that's what lawyers do… isn't it?

Learning about negotiation can be very dull, dry, and abstract if you let it be. There are countless books or courses available out there that will walk you through the theories and processes of negotiation - more analysis on game theory anyone? And of course, it's important that we all understand this stuff. However, it's just as important to know about the unwritten rules of negotiation - the importance of people, emotions, preferences, and behaviours. We need to understand the bad habits that can limit results, the fears that make us walk away too early, and the assumptions and stereotypes that prevent us securing really creative, sustainable, and profitable deals. Ultimately, we have to remember that negotiation is as much about people as it is about process.

I have worked with law firms of varying size and specialisms all over the world and have seen just how dangerous the automatic assumption that 'all lawyers can negotiate' can be.

Lawyers, as much as anyone else, need to invest time in developing their negotiation capability. The fact that someone is an expert in the intricacies of maritime law or EU regulations on commercial taxation, does not necessarily mean they are able to effectively read their counterparty, manage their nerves, control their fear of rejection, know how hard to push someone, or devise a strategy to unlock value or opportunity that is not immediately obvious.

Some mistakes and bad habits are exhibited by negotiators the world over - regardless of age, experience, hierarchy, geography, or industry.

Mistake 1: It's not you, it's me

When we approach a negotiation, we often spend most of our time thinking of all the reasons why the outcome is important to us. We get bogged down in thinking about deadlines, expectations, demands, targets, pressure from competitors, ambition, or whatever it might be that matters to us. We allow this to cloud our thinking and in doing so we ramp up the pressure on ourselves to do well. This often results in anxiety, fear, and nervousness clouding our judgement, planning, and performance.

Smart negotiators realise that the best way to diffuse the pressure of our own expectations is to simply acknowledge these pressures and then put them to one side. The real set of pressures and priorities that we should be thinking about exist in the head of our counterparty. Even if they do come across as powerful and intimidating, they too will have deadlines, expectations from colleagues, and demands from their boss.

The more you research your counterparty and understand things from their perspective, the more you can start to use their pressures to your advantage. It also goes a long way to boosting your own confidence if you know that the balance of power might just be a bit more even than you had previously thought.

Mistake 2: Avoiding negotiation is a clever strategy

"I know, let's just skip that negotiation part! No one really likes doing it, so let's just cut to the chase and save time. We all know it's just a game, right?" Wrong.

A common mistake is to try and limit the time spent negotiating or to bypass the negotiation entirely, believing that both you and the other party will be grateful that they have avoided all that unnecessary awkwardness. The problem with this strategy is that despite the old saying, people do look a gift horse in the mouth. If something is too easy, people start to wonder why that was the case and what might be wrong with the deal they have just (so easily) agreed to. This is when deals become vulnerable to challenge or collapse.

Natalie Reynolds is the Founder and CEO of AdvantageSPRING (www.advantagespring.com)