Introducing Hamilton Chan, Esq.

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- [Announcer] This is an audio course. Thank you for listening - [Kwame] Hamilton, thanks for joining
us today. - [Hamilton] Thank you for having me, Kwame. - [Kwame] It is our pleasure. How would
you start us off by telling the audience a little bit about yourself and what you do? - [Hamilton]
Absolutely. There's no subject that I love more than talking about myself so thank you for giving me
that opportunity. Tell you a little bit, I always start with the fact that I'm born and raised in Los
Angeles and maybe that's top of mind right now because Lakers are actively trying to recruit some
star players to their team to join LeBron James and Anthony Davis. So I'm really excited about
everything going on in Laker land, but I'm born and raised in Los Angeles. I ended up going to
Harvard for college. I was a psychology major. Ended up then working at JP Morgan in investment
banking in Hong Kong and New York and then went to Harvard Law School and that's really where I
learned a lot about negotiations. Negotiation workshop was my favorite class there. I ended up
being a teaching assistance in the Harvard Law School Program on Negotiation and I, well had the
opportunity in fact to share the stage with Roger Fisher, the author of "Getting to Yes" and to work
with the wonderful folks at the Program on Negotiation over there. And I taught the course during
law school. Like I taught it in the summer to our practicing attorneys and business executives and
then I got to use it in the real world. So I ended up coming back to Los Angeles and working at the
law firm of Munger, Tolles and Olson as a corporate transactional attorney. I did deals for Kobe
Bryan whom I helped buy a basketball team in Italy. And I also represented Berkshire Hathaway who
does obviously huge deals. And I ultimately then moved on to MGM working in business affairs. I
helped the studio negotiate contracts with actors, producers, writers, and directors. Ultimately
though, I found my calling in entrepreneurship. I was the son of an entrepreneur and had worked at
my family business ever since I was a little kid. And somehow the pull of that ultimately grabbed me
back and so I joined Charlie Chan Printing as its CEO and then ended up running this commercial
printing company for 16 years. It was definitely a labor of love and it was amazing working with my
dad. And I think that's when I truly cut my teeth as a negotiation expert because as a small medium
sized business owner you are negotiating every single day on the job. So you're negotiating with
investors, you're negotiating with customers, with employees with customers, with vendors,
everybody. So I felt like I negotiated every single day on the job with on that for the 16 years that I
ran the business. I also started a tech startup that was incubated by Y Combinator and that raised
about 1.7 million of seed venture capital funding. So I ran both companies at the same time.
Ultimately in 2016, I sold my businesses and I started to turn to executive coaching and I ended up
coaching a bunch of tech company founders through Y Combinator, through the YC network and I
really enjoyed doing that. And then following that, I ended up getting a position as director of
executive education at Loyola Law School where I'm a professor and I run the executive education
program that's including starting the website, building the platform and we just launched a couple
months ago. We have a online platform that provides for online coursework. We also have on-
campus classes and our very first launch class was an online course on negotiations and talking
about that and talking about negotiations is what brings me here. And I can't believe how long I just
droned on about myself. Thank you, Kwame. You are a saint for listening to all of that and to your
listeners as well. - [Kwame] No, this was great. And listeners I bet you can understand why I am so
excited to have Hamilton on the show. This is going to be great. And in our conversation leading up
to this, you've identified three areas that we want to focus on today. First, building rapport. Number
two, staying strong and number three, posturing. And I am really excited to get into this because
especially staying strong and posturing, those are things that we haven't gone too in depth on. So
I'm excited to see where you go.
Building rapport

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- So let's start off with building rapport. Tell us a little bit more about that. - Well, it occurs to me that
you have to play to your strengths in anything that you do. Right now Wimbledon is going on, and so
I see these tennis players. If you're Roger Federer, you're about playing the points really quick, about
putting the ball away, about advancing the net. And so, similarly, as a negotiator, this isn't
necessarily the tip for every single person. I do think there is definitely a universal truth in the value
of building rapport. But for who I am, and for people who may resemble me, I think that that is my
go-to strength. It's my secret weapon. And so the basic concept is this, it's that in order to negotiate
well, you need to build rapport with the other side. This means finding commonality, finding
common ground, having things to talk about, building that relationship, getting to that point where
they like you and you like them, so the matter that is being negotiated is almost secondary to the
relationship. That's, at least at a very high level, what I'm trying to accomplish when I try to build
rapport. - I love your response for two reasons. Reason number one, I am a tennis junkie, and I love
the fact that you brought in the tennis analogy, which was spot on. And number two, I really like the
fact that you recognize that, based on your personality type, you use building rapport as a strategic
tool, but you acknowledged that there are some people who do not have that personality where
building rapport comes easily to them. So for that person, what advice would you have for them in
this area? - So I think anyone can still improve in this area. So even though Roger Federer is great at
ending the points quickly, he still also has to be a consistent tennis player. So even though he's not a
defensive player who's just getting the ball back all the time, like a Novak Djokovic for you tennis
nerds out there, he still has to be able to be strong in that part of the game. And same thing with
Novak Djokovic. He can't just be getting to volley defensively all the time. He has to be good at
putting the thing away, too. So even if that's not your negotiation personality, you can still learn
from this, and I would still encourage you to do this. But I think knowing a little bit about yourself is
important, too. So if you tend to be more of the analytical type, maybe you're going to be the type
to focus more on your negotiation arguments, your legitimate criteria, coming up with brainstorms,
creative options, and building a rapport is going to be more of a secondary thing for you. But I think
it's an area that everyone can use that will improve the outcome of their negotiations. - Yeah, you're
absolutely right. And I think one of the things is when you start to develop that level of self-
awareness where you can see your personality type and the tendencies that you... And the patterns
of behavior that you bring to your negotiations, you can recognize what comes naturally and where
you need to put some concentrated, focused effort. And if it's not something that you do well, it
doesn't absolve you from the responsibility of actually building rapport. It just means that you need
to be a lot more intentional about doing it. And so for people who are more analytical, maybe what
you do is you have a systematic approach to rapport. You say- - Oh, I like that. - "I'm going to ask
these questions, and I'm going to spend at least seven minutes before (chuckles) I introduce my
arguments." - Yes! I think you're dead on on that as well. It's one of those things that people simply
underestimate, especially amateur negotiators, is they think that the whole point is the negotiation
itself is the material itself. Some of my best negotiations have been the ones where for 99% of the
time that we're talking to each other we're talking about the Lakers, we're talking about Wimbledon,
we're talking about stuff way on the periphery of the matter. Then finally we end with, "Oh, shoot.
We should probably deal with the little matter of this dispute," or this contract, or this deal, or this
whatever. By then the wheels are so greased that getting the agreement is a piece of cake. And
that's just the last 1% of the negotiation. So I think if that's the structure of your negotiation where
there is that much rapport building at the front, you can bet that the negotiation is simply going to
go better. And it happens a lot in business.
Why building rapport is powerful

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- Why do you think this is so powerful? - My dad used to have a say, I picked up a lot of things working with my
dad over the years but I noticed when I would go into sales calls with my dad people would just love to see
him. It was like a visit from Santa Claus and people always told me, your dad is so adorable. I love your dad.
He's amazing. And so one day I was talking to my dad and he said do you know why people buy from me? Then
I said why? And he said, because they like me. And from anybody else that would seem like such a self-
aggrandizing thing to say but it was absolutely true. The reason why people bought from my dad was because
they like him. I don't know if you've ever been in a purchasing situation. Let's say going even to a retail store
where you wanted to buy something but the person that was going to sell it to you was so unappetizing that
you were like you know what I forget, I'm not I'm just not going to buy it from you, even though you want the
thing itself or times when you didn't even want the thing, but the person was so nice. You're like, okay fine I'll
get it. Right that happens to us in everyday life. So I think the reason why the rapport building is so powerful is
that it is a big part of why people do deals with the people that they do. If they like you they're more likely to
make concessions to help you out and to give you what you want. - Absolutely, I'll get a little bit nerdy for a
moment as I like to do and reference the two books by Robert Cialdini "Influence" and most recently "Pre-
Suasion". And so there are studies that back this up it's not just an opinion or a philosophy right there. There's
studies that back this up. So when people like you more, you are more persuasive. And so it's not just getting
them to like you that's the first thing. And that's great. There's another element that is even more powerful. If
you can layer these two and so first get people to like you and then get them to say Hamilton is also like me. So
for example, if you're dealing with somebody who is a Lakers fan you talk about the fact that you're a Lakers
fan. You're part of the team. And so that closeness is a persuasive tool that you can use during the rapport
building process. - Totally making it seem like you're on the same side is critical because what makes
negotiating so difficult is that potentially adversarial nature of it. So even when I sit down at a negotiation table
assuming that this isn't something where we have to have to be adversarial, I like to sit kitty corner rather than
across the table, because it lends into that notion that we're going to attack this thing. Basically looking from
the same perspective as opposed to being, butting heads and playing some kind of game of chicken. So, you're
absolutely right. The other thing I'll like to do is if someone has trouble giving into my side, I will empathize
with the difficulty of their position, (laughs) say a police officer trying to give me a parking ticket or give me
some, a driving ticket. I might say, it must suck to have to hand out tickets all day and piss people off. I totally
get it that's not an easy position. And, how many times a day do they hear that? They might hear it 10 times,
but they might hear zero times. So if you're the one person to say, I get it, it's sucks. I don't envy your position.
I can totally understand what it must feel like. They might just put that pad out and be like thank you for saying
that, I appreciate that, cause now you're showing that you are on their side, you're showing empathy. -
Absolutely. And that's the thing too. I liken it to the law of physics. Every action has an equal and opposite
reaction. And so if somebody is demonstrating resistance either substantively and emotionally and your
immediate response is to negate what it is that they just said through argumentation. Like, you shouldn't feel
this way or no you're wrong because XYZ now they're almost obligated to counteract what you said with an
approximate amount of force. So if they do it like you are suggesting, they see, Hamilton's on my side, he
understands me. Now they don't feel the need to resist that strongly. - Yes. Like a Matador in the bull fighting
frame. - Exactly. - You don't as the Matador put your head into the horns of the bull. (both laughs) and push
back the snout. What do you do? You turn to the side and let them use their force against them so that they
keep moving. It's like bullfighting, let the thing go through. Or negotiation jiu-jitsu is term have heard a lot of
people have used. So absolutely you do not want to, strike the force, head on. You want to try to redirect. -
Absolutely. - And that often starts first with an acknowledgement. I mean, for your listeners, even hear us
listen to the fact that we are complimenting each other that we are ascending to each other's notions that we
are adding our own little flavors that we're layering the conversation on top of each other. That's what you do
in a negotiation.
Staying strong

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- [Kwame] Well, let's move on to staying strong. Tell us what you think about this. - [Hamilton] Okay.
So it's not all pleasantries in a negotiation. I fully recognize, and you couldn't be in business and be in
law for this long without realizing that you're going to have some negotiations which are hostile
from the first second until the very last second. And so a lot of people shy away when they
encounter the situation. In the fight or flight they're going to want to leave. And so I think that the
first thing that an experienced negotiator starts to develop is a certain resilience in a negotiation.
That's important. You need to be like a bobble doll, so that even as the punches are coming, you
continue to weather the storm and don't immediately start running for the hills. So a big part of this.
There are a few little silly tactics that can help. One is it's very natural for people to nod in assent. So
right now it's hard to say it because we're doing a podcast and it's audio only. But if we were face-to-
face, it's very common for one person to keep nodding as the other person keeps slamming them or
advancing their side. So I advise my clients and students to keep their head still and not to keep
saying, uh huh, uh huh. Okay. Okay. Yeah, uh huh. Because all that does is give the other side a green
light to keep going. Instead, if you keep your head still and you don't keep saying yes, uh huh, okay,
fine. It actually gives them this silence that makes people very unnerved and uncomfortable. And as
a result, they'll feel more of a yellow light or even a red stop light. Stop going in that direction. So I
do, you know, everyone knows that Mike Tyson has that phrase that everyone has a plan until they
receive their first punch, or some paraphrase of that. And I think that's absolutely right. In a
negotiation, people are terrified and they may go in with a certain plan, but as soon as the other side
starts knocking them down, they back off. So what I would recommend is, stay strong throughout
the negotiation. Feel conviction in your position and weather the storm, it's coming. - [Kwame]
Absolutely. And I really love the advice that you gave there with not nodding your head, because it's
so subtle and so powerful. Because one of the things that people crave in these difficult
conversations is validation, right? - [Hamilton] Yes. - [Kwame] And when you are nodding your head,
you're validating what they're saying. And now if you pull that away and you stop acknowledging
and validating what they're saying, then what they're reading in their mind is like, "Wait, we
established some great rapport at the beginning of the conversation- - [Hamilton] Yes. - [Kwame]
We're buddies. Now I'm not getting that validation. I want that validation from Kwame again." And
so then it starts to, they start negotiating against themselves a little bit. It pulls them in your
direction without you even having to say a word. - [Hamilton] Absolutely. I think in a way this is
hopefully a nice balance. Where if people hear it the first thing, building rapport, like, "Okay, great,
I'm just supposed to be buddy, buddy with the other side. I guess that's all I have to learn here
today. And it's one way or the other." No, you can balance that just as effectively, but this notion of
being really strong in a negotiation, being comfortable with weathering the storm and not feeling so
insecure in your own position that you have to throw your negotiation prep sheet out the window. I
do feel like, you know, imagine what it's like if you're just a smartup trying to- startup trying to sell to
a big enterprise brand, a household name, and you have this deal to place your product at that
company's location. You might go into this negotiation trying to really build that rapport. And then
as soon as the company starts giving you a bit of that silent treatment, as you start saying all the
reasons why you need to price it at this level, or that level, you're going to, your heart's going to sink.
You're going to lose a lot of confidence. And by the flip side, the big companies thinking, "Oh this
little startup is going to agree to anything that I say." And then they started imposing all of these
restrictions and you're all silent. They're also going to feel, as a human being, that, "Oh my gosh, the
love has been a little bit lost." So it's a subtle thing. And it's not necessarily to turn the whole
negotiation dark. You still want to have that rapport, but especially in those confrontational
negotiations, this is a tactic that I would consider important.

Other tips in staying strong

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- [Interviewer] So when it comes to being strong, I love the specificity of not nodding. Do you have
any other specific tips for the listeners? - [Interviewee] Yeah, I mean, I also think that holding your
cards to the best a little bit can be another useful technique. And it's funny because even as I say
this, I feel a little bit of internal turmoil because I taught at Harvard Law School with their principle
negotiation framework and getting to yes is what it's all about. I still negotiate with the principled
framework when I do business deals or legal negotiations. And the reason is that most of the time
they're talking about repeat business. So working off of principles, discovering interests, all that kind
of stuff is awesome and is great. At the same time, when you are an SMB owner for 16 years and you
know yourself from running American Negotiation Institute, you have to negotiate very tough all the
time as well. And so in those instances, it really helps to do things like holding your cards closer to
the chest. So one thing that is a typical sequence that happens in a negotiation and ultimately, I look
at negotiation as like this cultural norm and there are ways of doing the dance that are expected.
And so one of the dance moves that is expected, I think in a negotiation is what I call negotiation
bartering, where it's like, "All right, I'll trade you this deal point for that deal point. You trade me this
deal point for that deal point." So in that situation, it helps where the other side doesn't really have
the proper weighting on your deal points. And what people will do is hard bargain or sometimes is
they'll pretend that something is important to them, even though it's not. It's like going to the car
purchasing lot, to the dealership lot and saying, "You know, I would get this car, but it's the wrong
color. It's it's blue. I really, really had my heart set on red." Now, secretly you actually wanted the
blue one but you're pretending like it's something that you really cared a lot about. So then when it
finally comes down to it, you're like, "All right, fine. Look, since it's not the color that I want, give me
knock off $500. I'll just take this (indistinct)" So that's an example of kind of being strong by not just
revealing all of your cards and saying, "Look, this is how exactly how I feel about everything." At the
same time, you can be a hard bargainer by trying to genuinely get at what are their interests. And if
you find out what they're genuinely interested in, but there's a little hazy, what's important to you
and what's less important to you, then now you have information asymmetry and you can use that
to your advantage. So again, it depends on the situation. If I'm negotiating with, you know, North
Korea, maybe I'm going to be a little bit more obtuse about my position. However, if I'm negotiating
with (indistinct) Christian, then hey, it's a whole open book to you. - [Interviewer] I appreciate that
(laughs) Yeah, it makes a lot of sense. And you need to make that determination of what type of
relationship and what type of interaction we're having. And I really appreciate you bringing up the
typical getting to yes style collaborative negotiation approach. Because I think one of the issues that
comes with that is the belief that this approach is the way when it is a way, one of the possible ways.
It's a tool in your arsenal. And I think Chris Voss did a great job of outlining the differences, because
if you go against the hard bargainer and you are completely win-win collaborative, there's going to
be a problem (laughs) - [Interviewee] Yes. I think that it kind of goes down to game theory also just
like you point out and the prisoner's dilemma. And it turns out that one of the most effective
algorithms in a prisoner's dilemma type scenario, where you have to collectively a medium amount
to gain if you work together where you will have more to gain if you win and the other side loses, if
you play hard and the other one soft, but if you both play hard, then you kind of end up at the
bottom. When computers play against each other, the scenario that works the best, the algorithm
that works the best is the tit for tat strategy. So you start off nice and hopefully the other side
reciprocates, but if they don't and they start going hard bargaining and take advantage of you and
don't yield an inch when you're yielding miles, then you have to switch your strategy and then follow
them and then go with a hard style.

Posturing

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- I think this segues really well into posturing. So tell us a bit more about that one. - Yeah, I mean, I
think that how, you know, playing a negotiation hand is like playing a poker hand. So just like I was
saying that sometimes you don't want to make it clear what cards you're holding. Sometimes you
want to suggest that you're holding pocket Aces by the amount of money that you're putting down
on the table. And so you can fake out the other side that way as well. So I think posturing, especially
in law, is pretty important. You know, right now we're having a great conversation in a, let's say a
litigation negotiation. A lot of times it's not going to be that way. And if the other side starts going on
an avalanche about all the ways that your clients is wrong, you might want to stop that. And you
might want to be a, "Hold on, I disagree with that." Or show even like a frowny face, or kind of
cough, or just be like, "Hold on," and put your hand up. Little things that are part of trying to even
that balance at the beginning, because there is a psychological tug of war that transpires during a
difficult negotiation, and you're going to want to do the things that postures, so that they feel that
you're confident. That you feel strong in your position. And that you're not going to let them run
away with the deal all the way to the bank. - I agree, and it's such an important part of it. And I love
the fact that with this, with the three points that you've provided, it started off really nice. (both
laughing) It just started to get darker and darker (laughs) that's why you went on. But it's true, it's
real, it's an important part of the game at OSU's Law School. Now they have the top ranked
negotiation program in the country. And they use the collaborative win-win getting to your style as
well. But the reality is though, the thing that people don't want to talk about is listen, it can get really
dicey. And sometimes, it is a situation where they're like in litigation, "I need to fight for my client,
and you need to fight for your client." And that's the fact, that's where we are at this point. And
putting up those walls is going to be important. So for you, how are you able to stay strong and
posture without destroying the relationship? - So those are kind of like the heat that I'm packing.
(laughing) Like, I don't want to show to the fights without having some weaponry, but I'd rather not
pull out the weapon if I didn't have to. I'd like it just to be felt that I'm not a total victim. But if I don't
have to reveal behind my coat the thing that's sitting at my hip, man, that's a whole heck of a lot
better. So for me, this is all kind of last resort. I want to go in there. I want to be friends. I want to be
on their side. Even if it's in litigation association, first thing I want to do to help my client out of this,
talk to the other lawyer and say, "Man, our clients are crazy." You know, and get us of, "You are your
client's proxy, I am my client's proxy." Instead, "We are the cooler heads that will prevail. We are the
voices of reason, these guys are nuts, they're both nuts. I'm a lawyer, you're close to me, let's figure
this thing out together. Let's be like arbitrators, trying to figure out a solution. We're like NASA
scientists, figuring how to make the rocket land on the moon. So we're on the same side." So it's all
about trying to bridge that gap. And I would say almost all of my negotiations, it stops at step one,
which is building rapport. But if you have to, then steps two and three are there as well. You know,
you got to stay strong in the face of the storm, you got to be able to play that game. And number
three, you know, step three, you got to be pointing those things that are going to give you
psychological advantage in the negotiation sparring when it gets through.
Understanding your options and BATNA

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- [Interviewer] One thing we talked about before in our pre-call was understanding the options and
your BATNA. Before we end, can you- - [Man 1] Mm-hmm (affirmative). - [Interviewer] Chat about
that too? - [Man 1] Yes, I think the key term that miss-time most negotiation clashes is BATNA, and
that stands for best alternative to a negotiated agreement. I'm sure that word has been thrown
around in your podcast many times. - [Interviewer] Yes. - [Man 1} It is basically your backup plan.
What you're going to do if the negotiation fails to reach agreement. And so people become rather
BATNA obsessed but not in a good way, in my opinion. You're thinking, Oh my gosh, if I don't get this
job offer my BATNA is to go into the unemployment line. What people should really think about
when they first enter into negotiation, is how in the world they're going to improve their BATNA. So
if I have a big job offer negotiation coming up, the first thing I should do is try to get a second job
offer on the table. Even if you don't get a job offer on the table, a second one. If you merely set
things in motion where a interview is being scheduled, that's going to give you that psychological
boost you need to be like, "Oh yeah, I got something else percolating. I'm not all wholly dependent
on this one thing." If you have a big deal coming up potentially with a huge company like Google, the
very first thing you should do is to pick up the phone and call Microsoft and see if you can get
something else on the table. So working on improving your BATNA is the number one thing people
should do. And the other thing that they should do, instead of obsessing over their own BATNA, is
really think hard about the BATNA of the person that they're negotiating with. 'Cause usually you are
underestimating your BATNA and overestimating the other side's BATNA. But they may have a
similarly bad one to yours. After all, that's why you guys are at the negotiation table, because you
need each other. So if you remind yourself that their BATNA isn't all that pretty either, that's going to
help give you that psychological piece that you need.