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Negotiations

Presented by:

Michael Erdle,
Managing Partner, Deeth Williams Wall LLP

December 6, 2007
 It’s Negotiable:
A Guide for Entrepreneurs

Michael Erdle,
Managing Partner
 Introduction
Negotiation Problems
Negotiation Skills
Dispute Resolution

In theory there is no difference between

theory and practice. In practice, there is.
-- Jan van de Snepscheut
 What is Negotiation?
 Everything is negotiated.
 Family and personal
• “Where should we go for lunch?”
• “Can I borrow the car?”
 Academic research
• “Fund my project.”
• “Publish my paper.”
 Business ventures
• “I want a raise.”
• “Invest in my company.”
• “Pay me a license fee or I’ll sue you.”
 Negotiation Goals
Distributing Value vs. Creating Value
 Opportunistic
 Problem-solving

Identify Issues
Consider Interests
 Mutual
 Complementary
 Conflicting
 Negotiation Goals
Successful relationships are built on
communication and trust.
Negotiation is one way of creating trust –
or deciding whether trust is justified.
 Example: “The Prisoner’s Dilemma” a classic
negotiation game
 One-time deal vs. continuing relationship
 Negotiation Styles
Assertiveness vs. Empathy
Three common negotiation styles:
 Competitive
 Accommodating
 Avoidance

Effective negotiator is both assertive and

empathetic.
 Negotiation Skills
Communication is the key to effective
negotiation.
Understanding and recognition do not
mean compromise and concession.
What you say is often less important
than how you say it.
 Tone
 Body language
 Negotiation Skills
Listening
 Develop “active listening”.
Understanding
 Acknowledge the other person’s perspective.
Flexibility
 Be open to other options.
Pragmatism
 Be ready to accept the best available option.
 Effective Negotiation
Interests vs. Positions
 “Needs” vs. “wants”
“Separate the Person from the Problem.”
 Soft on the person
 Hard on the problem
Consider other Options
 Negotiation
Use Objective Alternatives
Look for a “win-win” solution
Determine BATNA
Best Alternative to Negotiated Agreement
 Negotiation Traps
Classic “Hard Bargaining” Ploys
 Extreme claims, small concessions
 “Take or leave it.”
 Unreciprocated offers
 Threats and warnings
 Attacking the alternatives
 Good cop, bad cop
 Ways to Respond
Extreme claims, small concessions
 Tit for Tat – make equally small concessions

“Take or leave it.”

 Make a counter offer
 Offer an alternative
 Don’t be afraid to walk away.
 Ways to Respond
Unreciprocated offers
 Don’t negotiate against yourself.
 Wait for a counter offer.

Threats and warnings

 Don’t make a counter-treat.
 Challenge the underlying assumptions .
 Ways to Respond
Attacking the alternatives
 Ask for an explanation.
 “Why do you have a problem with…?”

Good cop, bad cop

 Negotiate with the boss.
 Use the “good cop” to your advantage.
 Case Studies

Research Projects

Business Partnerships

Technology Licensing
 Research Projects

 Academic Interests  Commercial Interests

 Publication  Confidentiality
 Collaboration  Exclusivity
 Increase knowledge  Develop product
 Obtain funding  Generate revenue and
profits
 Business Partnerships

 “Senior” partner  “Junior” partner

 Expand the business  Expand the business
 Maintain reputation  Build reputation
 Short-term focus  Long-term focus
 Technology Licensing

Licensor Licensee
 Access to markets  Access to technology
 Guaranteed revenue  Low up-front cost
 Minimum continuing  Guaranteed continuing
obligations support
 Low risk  Low risk
Dispute Resolution

Arbitration Litigation

Mediation

Negotiation
 Mediation
Interest-based Mediation
 Mediator is a facilitator
 Focus on interests, not legal rights or
obligations
 Options for creative solutions

Evaluative Mediation
 Neutral evaluation
 Based on legal rights & obligations
 Mediation
Qualities of a successful mediator
 Negotiation & mediation process skills
 Subject area knowledge
 Lets parties make key decisions
 Creative approach to the problem
 Patience
 Resources
Cohen: You Can Negotiate Anything,
Bantam, 1980
Fischer, Ury and Patton: Getting to Yes,
Penguin, 1991
Ury: Getting Past No, Bantam, 1993
Mnookin, Peppet and Tulumello: Beyond
Winning, Harvard University Press, 2000
Questions?