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Negotiations

Presented by:

Michael Erdle,

Managing Partner, Deeth Williams Wall LLP

December 6, 2007

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It’s Negotiable:A Guide for Entrepreneurs

Michael Erdle,

Managing Partner 

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Introduction

 Negotiation Problems

 Negotiation Skills

Dispute Resolution

In theory there is no difference betweentheory and practice. In practice, there is.-- Jan van de Snepscheut

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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.”

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 Negotiation Goals

Distributing Value vs. Creating Value

Opportunistic

Problem-solving

Identify Issues

Consider Interests

MutualComplementary

Conflicting

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 Negotiation Goals

Successful relationships are built oncommunication 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

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 Negotiation Styles

Assertiveness vs. Empathy

Three common negotiation styles:

Competitive

Accommodating

AvoidanceEffective negotiator is both assertive andempathetic.

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 Negotiation Skills

Communication is the key to effectivenegotiation.

Understanding and recognition do notmean compromise and concession.

What you say is often less important than

how you say it.Tone

Body language

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 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.

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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

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 Negotiation

Use Objective Alternatives

Look for a “win-win” solution

Determine BATNABest Alternative to Negotiated Agreement

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 Negotiation Traps

Classic “Hard Bargaining” Ploys

Extreme claims, small concessions

“Take or leave it.”

Unreciprocated offers

Threats and warningsAttacking the alternatives

Good cop, bad cop

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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.

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Ways to Respond

Unreciprocated offers

Don’t negotiate against yourself.

Wait for a counter offer.

Threats and warningsDon’t make a counter-treat.

Challenge the underlying assumptions .

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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.

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Case Studies

Research Projects

Business Partnerships

Technology Licensing

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Research Projects

Academic Interests

Publication

Collaboration

Increase knowledge

Obtain funding

Commercial Interests

Confidentiality

Exclusivity

Develop product

Generate revenue and profits

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Business Partnerships

“Senior” partner 

Expand the business

Maintain reputation

Short-term focus

“Junior” partner 

Expand the business

Build reputation

Long-term focus

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Technology Licensing

Licensor 

Access to markets

Guaranteed revenue

Minimum continuing obligations

Low risk 

Licensee

Access to technology

Low up-front cost

Guaranteed continuing support

Low risk 

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Dispute Resolution

Arbitration Litigation

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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

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Mediation

Qualities of a successful mediator 

 Negotiation & mediation process skills

Subject area knowledge

Lets parties make key decisions

Creative approach to the problem

Patience

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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

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Questions?

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