A HARD BARGAINER IS A PERSON WHO:

1. A HARD BARGAINER IS A PERSON WHO: • Opens negotiations with an extreme competitive offer/solution • Frames the negotiation as “my win is your loss” • Uses a number of tactics to create doubt for the opposition • Makes diminishing incremental concessions over time • Creates tensions/impasses • If the last gap is reached splits the difference or adjourns

2. AN “EFFECTIVE” HARD BARGAINER? • Is not one who “wins”! • Is a person who regularly achieves for his/her clients, short term and long term commercial and personal goals, despite the risks attached to the “hard bargaining” process.

3. “A careful examination of the behavior of even the most forthright, honest, and trustworthy negotiators will show them actively engaged in misleading their opponents about their true position…. To conceal one’s true position, to mislead an opponent about one’s true settling point, is the essence of negotiation.” (White, James J., Machiavelli and the Bar: Ethical Limitations on Lying in Negotiation, 1980 AM B Found Res J. 926-930)

4. “On one hand the negotiator must be fair and truthful; on the other he must mislead his opponent. Like the poker player, a negotiator hopes that his opponent will overestimate the value of his hand. Like the poker player, in a variety of ways he must facilitate his opponent’s inaccurate assessment. The critical difference between those who are successful negotiators and those who are not lies in this capacity both to mislead and not to be misled…” (White, James J., Machiavelli and the Bar: Ethical Limitations on Lying in Negotiation, 1980 AM B Found Res J 926-930)

5. TEN RULES TO BE AN EFFECTIVE HARD BARGAINER • DIAGNOSE CAREFULLY (ie pick your fights). • PREPARE, PREPARE, PREPARE (especially BATNA). • Prepare colloquial catalogue of “DOUBTS” to lower expectations. • CONTROL PROCESS • KNOW and TEACH “the DANCE”. • ASK QUESTIONS. • DISCLOSE INFORMATION SELECTIVELY. • UNITE and DIVIDE “TEAMS”. • SELECTIVELY USE “TACTICS”. • KNOW and AVOID the COMMON MISTAKES AND PSYCHOLOGICAL TRAPS.

6. RULE 1 – DIAGNOSE CAREFULLY AND CONTINUALLY BEWARE OF COMPETITIVE/HARD BARGAINING WHERE: • CONTINUING RELATIONSHIPS are important • SPEEDY OUTCOME is necessary • WATNAS and BATNAS are uncertain or risky • The “opposition” are TIME RICH ZEALOTS • ESCALATION or LONG TERM BITTERNESS are FEARED • “VALUE IS SLIPPING OFF THE TABLE” • LEGISLATION and CASE LAW IMPOSE SANCTIONS • IT CROSSES VAGUE BUT EXPANDING ETHICAL GUIDELINES

7. HARD BARGAINING – “A PUDDLE IN THE SUN” IN AUSTRALIA? (Cavanagh) Informed Customers Trade PracticesAct ProfessionalDiscipline “NORMAL” COMPETITIVE BEHAVIOUR Legislation Ethics Duties ofDisclosure Meaning of “Good Faith”

8. THE MORAL CODE OF PROFESSIONAL RESPONSIBILITY(ADAPTED BY ABA) A LAWYER SHALL NOT: • KNOWINGLY ADVANCE A CLAIM OR DEFENCE THAT IS UNWARRANTED UNDER EXISTING LAW EXCEPT HE MAY ADVANCE SUCH A CLAIM OR DEFENCE IF IT CAN BE SUPPORTED BY GOOD FAITH ARGUMENT FOR AN EXTENSION, MODIFICATION OR REVERSAL OF EXISTING LAW. • CONCEAL OR KNOWINGLY FAIL TO DISCLOSE THAT WHICH HE IS REQUIRED BY LAW TO REVEAL. • KNOWINGLY USE PERJURED EVIDENCE OR FALSE EVIDENCE. • KNOWINGLY MAKE A FALSE STATEMENT OF MATERIAL FACT OR LAW. • NB: A LAWYER GENERALLY HAS NO AFFIRMATIVE DUTY TO INFORM AN OPPOSING PARTY OF RELEVANT FACTS.

9. “UNDER GENERALLY ACCEPTED CONVENTIONS IN NEGOTIATION, CERTAIN TYPES OF STATEMENTS ARE NOT TO BE TAKEN AS STATEMENTS OF A MATERIAL FACT. ESTIMATES OF PRICE OR VALUE PLACED ON THE SUBJECT OF A TRANSACTION AND A PARTY’S INTENTION AS TO ACCEPTABLE SETTLEMENT OF A CLAIM ARE IN THIS CATEGORY” (COMMENTS ON ABA MODEL CODE OF PROFESSIONAL RESPONSIBILITY)

10. NEGOTIATORS ADOPT COMPETITIVE STRATEGY WHEN: • One believes (s)he has “nothing to lose” • Need to preserve a “tough” reputation to avoid floodgate • Needs to be consistent with past decisions • Substantial emotion and grief exists • There is no concern for the future relationship between the parties • There is perceived benefit in delay • One perceives (s)he has bargaining “power” (strong WATNA and BATNA) and can dominate the other

11. “PROBLEM” DEFINITION – I must negotiate with ……………….…….. to solve the following problems. RULE 2 - NEGOTIATION PLANNING INSTRUMENT (1) (2) (3) (4)

12. CLAIMANT INSULT TARGET RESERVATION ZONE ZONE ZONE RESERVATION TARGET INSULT ZONE ZONE ZONE RESPONDENT

13. RULE 3 – PREPARE “DOUBTS” CREATING DOUBT IN NEGOTIATION AND MEDIATION

15. TRYING TO “CREATE DOUBT” FOR “THE OPPOSITION” • “Predictably, I disagree with everything that Jane said except for her fourth comment.” • “Bill has suggested that there are 7 risks for us. I would like to respond at an appropriate time to each one of these.” • “I have a one-page document here which has anticipated everything Mary has just said, and gives our responses in point form.” • “We have heard all of this before and responded in detail in the letters, pleadings dated….” “We have never heard any of this before. Why?” • “David has suggested that my client carries some risks. I agree. But we say that these are miniscule compared to the four burdens you carry.” • “Joanne has suggested that my client carries 5 risks. In fact, she has missed 3 others. We have carefully weighed these up in our written risk analysis.” (waves paper) • “People who live in glass houses should be careful about throwing lists of risks.” • “I would like to put our responses up on butcher’s paper so that they are clearly visible for the rest of this meeting.” • “Thank you for those comments, I’d like to move on now….”

16. RULE 4 – CONTROL THE PROCESS • Pre-conditions for negotiation • Schedule meetings at your convenience • Lower expectations early • Speak first and politely; “I can help” • Reduce expenses of inevitable adjournments • Regular breaks with team • Ask “opposition” to prepare documents/witnesses • Make alternative offers • When faced with aggression, revert to process and calmly discuss needs and interests • Don’t walk out; always get something (eg documents; next meeting)

17. RULE 5 – KNOW AND TEACH ‘THE DANCE’ • Be polite and clear • Start high/soft on edge of insult zone • Objective criteria • Ask many questions • Create doubt • Never made a concession without getting something in exchange • Each concession takes twice the time; and is half the previous one • Don’t try to shortcut the dance • Near resistance point, ask, the “apart from money?” question • Break pattern at your resistance point • Adjourn (get something); or use standard methods to cross last gap

18. NEGOTIATION PROCESS • PREPARE IN WRITING; Practise Roles • Introductions • Discuss/Suggest Procedure • IDENTIFY Agenda Items (Interests; Problems; Questions) • IDENTIFY any easy common aspirations/agreements • FIRST OPENING/OFFERS- High Soft / Low Soft- Reasonable FIRM- Problem Solving • RESPONSES- High Soft / Low Soft- Reasonable FIRM- Problem Solving • JAM; STRESS; CREATE DOUBT; RESTATE and REASSESS GOALS and INTERESTS; BATNA; ASK QUESTIONS; BREAK • MORE OFFERS, “WHAT IF…”; GRADUAL CONCESSIONS • PARTIAL or COMPLETE AGREEMENT; HOMEWORK? FINETUNE IN WRITING

19. RULE 6 – ASK QUESTIONS Why? • To discover opposition’s current target and resistance points • To lower oppositions current target and resistance points (create doubt) • To avoid “group think” in your own team on WATNAS and BATNAS • To search for extra chips • To demonstrate empathy

20. RULE 7 – DISCLOSE INFORMATION SELECTIVELY Exercise Write out at least three methods whereby “effective” negotiators you have met make “selective disclosure” 1. ……………………………………………………………………………………………………… ……………………………………………………………………………………………………… ……………………………………………………………………………………………………... 2. ……………………………………………………………………………………………………… ……………………………………………………………………………………………………… ……………………………………………………………………………………………………... 3. ……………………………………………………………………………………………………… ……………………………………………………………………………………………….......... ……………………………………………………………………………………………………...

21. HAWKS 2 MODERATES 2 DOVES 2 HAWKS 1 MODERATES 1 DOVES 1 CLIENT 1 CLIENT 2 “NO TEAM IS UNITED” RULE 8– UNITE AND DIVIDE TEAMS/CONSTITUENTS/TRIBES

22. RULE 9 – SELECTIVE USE OF TACTICS • making an extreme opening offer • using threats, rudeness, hostility, rigidity and intolerance to intimidate • using silence strategically • issuing ultimatums • stalling • withholding concessions and information • claiming lack of authority • stretching the facts • playing good guy/bad guy, • adding “irrelevant” give-away chips

23. GOOD COP/BAD COP ROUTINE Examples? Solicitor ─ Barrister Lawyer ─ Accountant Disputant ─ Spouse Middle Manager ─ Boss Client ─ Lawyer Worker ─ Union Leader Expert Witness ─ Lawyer Client ─ Evaluative Mediator Individual ─ Same Individual!

24. RULE 10 – KNOW AND AVOID THE COMMON MISTAKES AND PSYCHOLOGICAL TRAPS DECISION-MAKING SHORTCUTS AND TRAPS (FOR NEGOTIATORS AND OTHERS) • The ANCHORING TRAP: Over relying on first thoughts • The SUNK-COST TRAP (ENTRAPMENT): Protecting earlier choices • Mythical FIXED-PIE beliefs • The STATUS-QUO TRAP: Keeping on keeping on • The CONFIRMING EVIDENCE TRAP: Seeing what you want to see • The FRAMING TRAP: Triggering a premature answer with the wrong question • EASILY AVAILABLE INFORMATION TRAP: “What an impressive chart!” • The WINNER’S CURSE: “Perhaps we could have done better?” • The OVER CONFIDENCE TRAP: Being too sure of your knowledge and ability • The BASE-RATE TRAP (The Law of Small Numbers): Neglecting relevant information • SELF-SERVING BIAS: Environment versus personality • IGNORING OTHERS’ INTERESTS AND PERCEPTIONS: “Let’s get down to business” • REACTIVE DEVALUATION: Ridiculing “opposition’s” ideas and behaviour (See Lewicki (2003); Smart Choices 1999)

25. STANDARD COMMENTS THAT HINDER NEGOTIATIONS • “It’s only money!” • “The other side won’t take the risk” • “We can agree on the facts” • “Let’s not dwell on the past” • “It’s not personal” • “We don’t apologise” • “Leave it to me” • “I’m in the box seat here” • “Don’t talk to the other side” • “Our expert will win for us” • “I’ve just come here to listen” • “Get an offer from the other side first” • “This is an open and shut case”

26. EFFECTIVE RESPONSES TO POSITIONAL BARGAINERS • Discover reputation beforehand • Detailed risk-analysis; BATNA and WATNA • Must have planned alternatives • Withdraw all existing offers • Make transparent first offer; problem-solving or insult zone • Ignore offer; or name strategy • Lower speed expectations of our clients and team (“normalise”) • Hand over written list of common goals; your strengths; their perceived weaknesses • Split their team, several lines of communication • Only conditional and reciprocal concessions • Minimise expenditures • Suggest independent expert with joint facts • Occasionally, respond with tactics • File early for benefits of information exchange and door-of-court