One cardinal rule of negotiation is that one should not bid against herself. That is, negotiation should be a two-way conversation in which party A makes an offer to which party B responds with a counter offer to which party A responds with a new offer and so on. But suppose Party A makes an offer and Party B simply says, “no, come back with a new offer; we will not make a counter offer.”
Party B is essentially asking Party A to bid against herself or to play the game of pin the tail on the donkey blindfolded.
A second cardinal rule is that a party does not typically really start negotiating until it is past the time to negotiate. That is, until she is out of time.
A colleague of mine just settled a case that followed both cardinal rules.
Until a few days ago when the matter settled, it was scheduled to go to trial in two weeks. Like any good lawyer, my colleague attempted to settle the case. But, every time she made a settlement proposal, opposing attorney simply said, “no, make another offer.” Opposing counsel claimed that its client refused to make any sort of counter offer or even to give a vague range of settlement dollars that would settle the case. My colleague was in the unenviable position of having to be a mind reader and guess what amount of money would settle the case without any hint from opposing counsel
To me, this type of negotiation was quite strange and not in good faith. I could not fathom the point of this game. It only caused both sides to waste a lot of time and energy. And so, both sides spent their days preparing all the pretrial documents for a trial that neither side really wanted to try.
Until….time ran out!
About two or three days before all the pretrial documents were due in court, my colleague took another stab and made another settlement offer once again. As it usually took a day or so for opposing counsel to pass the offer on to her client and to obtain a response- opposing counsel suddenly realized that if she wanted to avoid having to stay up all night to finalize the pretrial documents for timely submission to the court, she would have to change her negotiation strategy. She would have to provide a counter offer. In short, she was out of time to negotiate; if she wanted to settle, the game of forcing my colleague’s client to continually bid against herself would not accomplish that goal.
So, indeed, the day the pretrial documents were due in court, she provided a meaningful counter offer. My colleague consulted with her client who agreed to the proposal and the matter settled within hours.
Just think of the time and energy wasted and mental anguish suffered by both the parties and their attorneys by the opposing counsel’s refusal to engage in traditional negotiation. It could have all been so easily avoided if opposing counsel had negotiated the way the rest of us do!
…Just something to think about.
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