Conducting negotiations is an art, not a science

By Mithun V Thanks and Gaurav Dugar, Shardul Amarchand Mangaldas & Co
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This title is one that will evoke scepticism and knowing smiles. Negotiation is a thoroughly documented subject from books and seminars to semester-long courses and Ted talks. Given the ubiquity of reference material, it is curious as to how such a subject is regarded as a subset of art and far from any science, let alone an exacting one.

negotiations
Mithun V Thanks
Partner
Shardul Amarchand Mangaldas & Co

The reason for this is simple: the success rate of a single negotiating style in the long run is marginal. There is no template for what a good negotiator should or should not do, at least in the domestic context. A successful negotiator is one who can gauge the temperature of the room, adapt their style to be the most audible in that room, and make coherent and logical arguments, displaying a sound understanding of the principles of law involved. Jurisprudence in negotiation is based on principles, not rules. These terms are commonly conflated, but in negotiations the difference is key. Conceptually, rules, are regarded as rigid, and linear, whereas principles are considered to be organic, and more flexible. The focus thus falls on adaptability, which is the main quality of a negotiator.

This approach is not fully appreciated in most negotiations. More often than not, and rather unfortunately, the stentorian voice in the room is considered to be the better negotiator, irrespective of the quality of the argument being advanced. Equally, soft spoken lawyers are written off as being timid, unprepared, or, in extreme circumstances, fearful of their counterpart, because of their unassuming demeanor. A lawyer can make no greater mistake at the negotiating table, than to give weight to an argument because of the ferocity with which the point is being pressed, or worse the identity and seniority of the person making it. In most negotiations, the adage of empty vessels making more noise, sadly, continues to hold good, because real life negotiations are rarely the situations depicted in television dramas.

negotiations
Gaurav Dugar
Senior associate
Shardul Amarchand Mangaldas & Co

Modern negotiations are moving from the more traditional model, where the ranking senior dominated the room, to a more inclusive, streamlined model, in which most participants are expected to engage. A negotiation in today’s world is not a seminar, where one person speaks, while the room nods and makes shorthand notes, nor is it similar to our beloved news channels, where the anchor shouts repeatedly at the cohort of invitees, never allowing them a moment of deliberation to consider the point being made.

It is vital to actively listen while in a negotiating room and to understand the pain points of the counterparty. It is in the interests of an able negotiator to understand the counterparty’s point of view and not necessarily by saying so, empathize with that view. Appreciating the counterparty’s perspective will only help to contextualize positions and to identify a solution acceptable to all parties. Equally, if the counterparty, for whatever reason is being unreasonable, it is essential to be able to have a frank conversation with the client. A successful negotiator is one who can make all parties feel that they have won, but that an outcome should never be achieved at the expense of the client.

Experience is important, but one situation is unlikely to be exactly the same in another. Overreliance on apparent support, such as the much (ab)used market practice, or a claim to have seen or done something before, while beneficial in adding context, cannot replace logical, legal, fact-based reasoning.

However, used correctly and for the right points, this can make a lawyer stand out in the room, and often result in such person being considered the problem solver, able to meaningfully adapt previous experience to the current pattern of facts. As an illustration, limitations on indemnity usually involve deeply entrenched positions. However, it is erroneous to assume that every client’s perspective on indemnity limitations and pressure points are the same, and will usually result in the counterparty’s lawyer dexterously explaining to both sets of clients how such generalizations cannot be drawn by picking out relevant facts.

There is no rigid formula to determine which method should be adopted in a negotiation. Each deal is unique, and must be approached as such. Finding a system that works during a negotiation is ideal, but rigidly sticking to that system in another deal will lead to disaster. After all, there is good reason for negotiations to be considered an art and not a science and its core being principles, not rules.

Mithun V Thanks is a partner and Gaurav Dugar is a senior associate at Shardul Amarchand Mangaldas & Co.

SCRA

Shardul Amarchand Mangaldas & Co
Nariman Point
Mumbai – 400 021Executive Chairman: Shardul Shroff
Managing Partner Mumbai: Akshay Chudasama
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