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A guide to corporate negotiation

A guide to corporate negotiation

The Rookie Lawyer


Reading time: five minutes

At an open day I attended last year, I partook in my first corporate negotiation workshop. Having only just begun my law conversion course at the time, the encounter was entirely unfamiliar to me. I was surprised at how quickly my peers seemed to be taking to the task − and a bit embarrassed at how little I knew by comparison!

However, with my university's negotiating competition coming up – and the prospect of future open days, applications and interviews looming − I thought it’d be worth finally digging into the ever-important skill of negotiation. So, for anyone whose aim is to learn more, from beginners to experts who just need a quick refresh, here's an article on how to negotiate effectively.

What’s negotiation and why is it relevant to law?

Negotiation usually occurs in a commercial context. Representatives from different businesses, or their lawyers, will sit down together and draft a contract that meets each of their clients' needs. As simple as the process sounds on paper (no pun intended), each business will usually want to contract on their own terms in a way that’s beneficial to them. This means that some disagreement is almost inevitable. Thus begins what my contract law textbook calls 'the battle of the forms', and what effectively occurs over the process of negotiation.

Negotiation is a process of give and take with the other party. It demands strategy, knowledge, research and a careful balance between establishing a boundary and compromising. So, how do you, as a solicitor, ensure that your negotiation session goes as smoothly (and as favourably to your client) as possible?

Step one: preparation

When you’re contracting on behalf of your client, an understanding of that client's needs, wants, goals and boundaries − as well as those of the other party − is imperative for a successful negotiation session.

As usual, you’ll first need to conduct the necessary research into both your client and the other party. Consult with your client about what they hope to gain from this contract and what they are (and aren't) willing to compromise on, and consider discussing alternative options in case the session goes awry. However, it's equally important to understand the other party's point of view, so you can understand what they want to gain from the contract and anticipate where they may be able to compromise. Obtaining this more holistic picture of the contract means that the negotiation session is more likely to go smoothly − and more likely, in turn, to be a win-win.

What should you be researching?

Within the context of a negotiation, remember that numbers are your best friend. Come to the negotiation armed with statistics and other hard facts that can be used to persuade the other party to concede on a point in your client's favour. Understand what might be persuasive by researching the other party on their website, social media and press releases. Look into their past deals, especially similar ones, to help bolster your argument. Make sure you have a detailed understanding of the products and services they offer and who their competitors are. This will help you to fully flesh out your understanding of what they may find negotiable.

Use this information to then piece together an understanding of the relationship between your client and the other party. Consider the following questions:

  • What’s the deal dynamic?
  • Does one party have a specific advantage over the other?
  • Are there any time limits you should factor into your preparation?
  • Who would benefit from the deal more, and what can be done or provided to even this out?

Step two: bargaining

Once you’ve completed your preparation, you're ready for the big discussion. Here, both sides will offer their initial positions and clarify what they aim to achieve and what they're willing to provide as compensation within the contract. The benefits to both sides will be clearly articulated at the outset. Make sure you state your initial aims higher than they are to allow room for negotiation (the final result is almost certain to be lower).

As you did in the preparation stage with your client, have a discussion with the other party about points on which they'd be willing to concede to better understand what the negotiation boundaries are. Justify your initial stance − this is where hard figures, facts and statistics may come in handy − and identify how the other party may benefit from this in a way that aligns with their own aims. It may be worth also identifying if there are any extra benefits that come with your terms that the other party isn't aware of. Although this won't guarantee a contract on your client's terms, everyone knows that a bonus is always a plus.

Deals will usually take some time, especially if they're more complex or detailed, but promptness is the name of the game. The sooner the deal is done, the better for both parties − that's something you'll both be sure to agree on!

Step three: confirmation and conclusion

The negotiation will end when both parties are satisfied with the results. The next step will include the drafting and finalisation of the contract on the terms agreed on during the negotiation session.

Regardless of what you're negotiating, being a successful negotiator means:

  • knowing what you want;
  • trying to understand the other party’s position; and
  • compromising if necessary.

A successful negotiation leaves everyone satisfied that they have gotten a deal they’re comfortable with. The aim, then, is not only to satisfy your client, but to also craft an agreement between two parties that offers a substantial benefit to each of them.