Tips for negotiating a deal

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. We might negotiate on salaries, contract terms, HR matters, equity and investment, restructures or acquisitions. We might negotiate for ourselves, our firm or a client. The reality is, most people (not just lawyers), will negotiate every single day.

By understanding the different stages in the process we can start to ensure that we have maneuvered ourselves into the best possible decision. The following 'deals' approach is designed to highlight the key steps you should be taking every time you plan for and carry out a negotiation.

Discover

Before you get anywhere near the negotiation table you need to discover as much as you can about the issue up for discussion. Do your research, know the facts, understand the market or look at what has been agreed previously. A common mistake is we often go in unprepared and without the insight we need. Do you know who will be involved? Do you know the timescales? Are there industry baselines you can look at? Also discover what type of negotiation it is. Is it value claim (short term, transactional in nature or win/lose) or value create (longer term, more complex or win/win)? Understanding all this will help you develop your potential behavioural strategy and what your tactics might be.

Establish

Next up is to establish some boundaries and priorities. Establish what your key priorities are, as well as what theirs might be. To create a win/win outcome you need to understand what success looks like for them also. Reciprocity means if they feel they have won, they are more likely to help you win too. You also need to establish your breakpoint or walkaway point. This is the worst case outcome for you. Once you've established it - stick to it! In the heat of a negotiation we often agree to things we wouldn't if we were more calm or confident. Next is to then establish what their breakpoint might be. The aim of the exercise will be to finish as close to their breakpoint as possible as that way you are maximising the available negotiation zone.

Ask

This is about making sure you make your proposals in the most effective way. When you make a proposal always make sure you open 'ambitiously but credibly'. Ask for slightly more than you need to give yourself wriggle room to explore what they might be willing to give you. If you can, try and make the first move in the negotiation. Anchoring is a phenomenon from the world of psychology that means we are often overly influenced by the first number put on the table and you are then likely to finish closer to that figure. Don't worry if you don't manage to go first though; just remember to not reinforce their proposal by going on and on about it. Instead recognise the best way to beat their opening proposal is to make one of your own. Simply, the more you talk about what you want and why, the more likely to are to get it.

Lead

This refers to taking the lead in the negotiation. Be confident. Take a deep breath and speak calmly and professionally. Don't allow your emotions to control you. A simple tip to help with this is to remember that even the most confident of people will often feel awkward and nervous when negotiating; they are probably just doing a better job of hiding it! Taking the lead also means if you are negotiating as part of a team that there is discipline within that team. Assign roles, be clear on who does what and when.

Seal

And last but not least is to seal the deal in the right way. Get it in writing as soon as you can. One of the most dangerous phases in a negotiation is the 'post-deal, pre-paperwork' phase. This is the period after the deal has been agreed with a handshake or verbal agreement, but the ink is not yet on the contract. This is the phase where if your counterparty has any doubts about the deal they have just done, they will come back and try and 'nibble' a bit more for themselves or their client, try to alter terms they are unhappy with, or walk away from the agreement in that form altogether. To try and limit the risk of this, be gracious rather than over the top if you get a great outcome and make your counterparty feel satisfied with their result. Agreements are stronger if each side feels like they are winning.

By Natalie Reynolds, founder, AdvantageSPRING