NEGOTIATION: A Little Magic and a Lot of Skill

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NEGOTIATIONA Little Magic and a Lot of Skill
MGMA Bring the Magic to your Practice! September
25, 2009

• Laura L. Katz, Esq.
• Saul Ewing LLP
• 500 East Pratt Street
• Baltimore, MD 21202
• Phone [phone]
• Email LKatz_at_saul.com

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What is Negotiation?

• To deal or bargain with others
• To arrange for settlement of terms or produce an
  agreement
• To engage in a problem-solving process
• To participate in a process that creates value or
  change.

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Negotiation is Part of Everyday Life.

• Occurs between spouses, parents and children,
  employers and employees, professionals and
  clients, office managers and physicians
• Almost everything can be negotiated.
• As President John F. Kennedy said
• Let us never negotiate out of fear,
• But let us never fear to negotiate.

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Approaches to Negotiation Positional Bargaining

• Participants are adversaries
• Goal is victory
• Dig into position
• Demand concessions
• Apply pressure
• Look for a win.

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Approaches to Negotiation Positional Bargaining

• Costs
• Endangers ongoing relationships
• Promotes rigid adherence to positions
• Involves a zero-sum game
• Can lead to unwise agreements.
• Benefits
• Does not require trust or exploration of
  interests
• Does not require full disclosure
• May produce compromise.

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Approaches to Negotiation Principled Negotiation

• Focuses on interests not positions
• Participants are problem solvers
• Shared goal of a wise outcome
• Separates the people from the problem
• Invents options for mutual gain
• Uses objective criteria.

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Approaches to Negotiation Principled
Negotiation or Interest-Based Bargaining

• Costs
• Requires trust and exploration
• May uncover divergent values and interests
• Involves greater disclosure.
• Benefits
• Builds relationships
• Promotes solutions that satisfy mutual interests
• Can create value through mutual gain.

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Stages of Negotiation Importance of Preparation

• Study precedents
• Identify your interests, priorities and
  objectives
• Identify other partys possible interests,
  priorities and objectives
• Evaluate alternatives including your Best
  Alternative to a Negotiated Agreement or BATNA

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Importance of Preparation

• Establish your Reservation Value and
  hypothesize as to the other partys Reservation
  Value (walkaway positions)
• Plan your strategy
• Assess strengths and weaknesses
• Obtain as much information as possible.

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Preparation and Process Relationship Building

• Understand values, cultural background and
  viewpoints of other party
• Establish a relationship built on trust
• Promote cooperation and collaboration
• Accept responsibility dont engage in blaming.

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Preparation and Process Relationship Building

• Recognize and understand emotions
• Be optimistic
• Demonstrate respect and understanding
• Clarify communications.

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Process Separate the Substance from the
Relationship

• Put yourself in the other sides shoes
• Engage in active listening
• Pay attention
• Ask questions
• Acknowledge what is said
• Speak for a purpose
• Identify compatible or mutual interests.

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Process Be a Negotiation Detective

• Ask why?
• Detect constraints, reactions, biases or
  weaknesses
• Find out how the other side perceives your
  interests
• Explore multiple options and
• Prioritize options.

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Promote Use of Objective Criteria

• Look for objective criteria that will apply to
  both sides
• Do not insist on your position based on the
  criteria you advanced
• Give hypotheticals to determine acceptance of the
  criteria you proposed
• Identify the objective criteria that will be used
  to reach agreement.

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Process Propose Options for Mutual Gain

• Engage in creative thinking
• Record all ideas
• Attempt to dovetail interests
• Remember the English nursery rhyme

Jack Sprat could eat no fat. His wife could eat
no lean. And so between them both, you see, they
licked the platter clean.
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Propose Options for Mutual Gain

• Apply principles of fairness, efficiency or
  scientific merit with use of precedents
• Assess how interests can be met by available
  options.

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Stages of Negotiation - Closure

• Decide upon logistics
• Identify the Zone of Possible Alternatives
• Use a problem-solving approach
• Recommend solutions
• Show the other side how their interests will be
  met.

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Stages of Negotiation Closure

• Aim high
• Strive for a wise agreement
• Be flexible and willing to make concessions and
• Document a substantive agreement.

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Strategies

• Creating multiple issues
• Nibbling
• Wince or Ouch!
• Higher authority
• Time
• Emotional outbursts
• Walking away
• Quiet treatment
• Focusing on potential losses.

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Ingredients for Success

• Building relationships based on trust and
  cooperation
• Being prepared
• Establish your BATNA
• Know and pay attention to other sides interests
• Apply objective criteria to find solutions
• Explore opportunities for mutual gain
• Attempt to create value and
• PRACTICE

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Laura L. Katz, Esq. Saul Ewing LLP 500 East Pratt
Street Baltimore, MD 21202 Phone
410-332-8804 Email LKatz_at_saul.com