The Art of the Deal
Hesha Abrams, Esq.
Abrams Mediation and Negotiation, Inc.
© 2008 Hesha Abrams, Esq. Abrams Mediation and Negotiation, Inc., www.AbramsMediation.com
Why is it that everyone knows that the traffic intersection in that part of town is dangerous, but the City doesn’t put a stop light there until a child is killed? Once the uproar occurs, the political will to spend the money appears. Why is it that a teenager has to get stinking, filthy drunk before he discovers that alcohol is not so much fun, and that drinking in moderation is a wiser course? We all know we should eat healthier, exercise more, take a vacation, etc, but we don’t do it. There is something in human nature that doesn’t value preventative care and is more comfortable with crisis management. Why?
After over 20 years of deal making and thousands of negotiation skins on my wall, I think it’s because human beings are short term gratification oriented. The stock market rewards quarterly increases, not long term planning. The CEO’s compensation package rewards stock price increases so there is a natural predilection to achieve short term gains, rather than strategically planning for future long term growth.
Great chess players never move one move at a time, they move five moves at a time in their head and can see the whole board and the end game. They also make a move designed to provoke a move from the other side that fits into their long term end game.
Most negotiators move one puny move at a time. Great negotiators negotiate like great chess players, five moves at a time and take actions designed to provoke/ encourage a particular move from their opponent. They know that it is not the battle that must be won, but the war. Allowing your opponent to become overconfident, to become lax in their preparation or due diligence, might allow you to sacrifice one piece in order to gain something of much greater value and/or to position yourself for victory in the whole game.
This same philosophy applies to deal making negotiations. Often, the participants and/or their attorneys in a deal think:
“I can do this myself.”
“I don’t need any outside help.”
“I don’t want any outside influence.”
“I want to retain control.”
“I’ve negotiated many deals and don’t need a mediator”
In many instances, these statements and beliefs are accurate and true...If your opposing party in the deal negotiation has an alignment of interest with yours,...If he/she has either compatible or not incompatible negotiating styles and ...If they have an equal self-interest in closing a deal.
But what if these statements aren’t true? What if strong personalities get in the way? What if you hit a snag and one party wants to appear strong by walking out? Would you lose the deal simply because there wasn’t a third party there driving the negotiation? I’ve often been hired in deals after private negotiations failed and both parties will either be perplexed as to why it fell apart or hypothesize and come up with the wrong reason. As a third party with no skin in the game, a smart business deal mediator can find the correct reason and then come up with a fix.
If you don’t diagnose the correct problem, you can’t design a workable solution. In negotiation, parties are not fully forthcoming with each other so you may never know the real reason a deal works, falls apart, or becomes sluggish. Using a deal mediator, you gain insight into the tent of the other side that helps you avoid these pitfalls.
Interestingly, you can be harder and tougher in your own negotiating stance if you also don’t have to play conciliator or peacemaker and leave that job to an independent third party. Each party can concentrate on trying to achieve their own negotiation objectives without worrying that it will disrupt or destroy the negotiations because you can safely rely on the deal mediator to keep the game going.
If you have a deal mediator whose job and self-interest it is to keep the negotiations going, you can employ time-honored and excellent negotiation techniques such as good cop-bad cop, referrals to an outside approval mechanism, the walk away etc. You actually achieve greater control because you know you have a deal mediator there keeping the train on track for deal culmination.
As a mediator for over 20 years, I have conducted thousands of negotiations with tens of thousands of parties. Let me state one thing emphatically, there is never only one “right”, and never only one “wrong”, there are only perspectives, personalities, and positions. Take the exact same facts and change the human beings around the table, and you have an entirely different game. The proof for this supposition is to attend any negotiation simulation and have the same problem given to multiple groups of people and see all the different results that are achieved by the different negotiating teams.
Furthermore, you never know what is going on inside the deep dark recesses of the “other” camp. There might be an IPO brewing, someone might be about to lose his job, be up for a promotion, have bad loss-to-gain ratios, have the imminent announcement of a new product or service, or the denial of a crucial governmental approval. All of which has nothing to do with the negotiation at hand factually, but may dramatically influence a desire or non-desire to culminate a negotiation. By using a deal mediator, someone with extensive mediation experience as well as sophisticated business acumen, you can avoid the trap of falling into the unknown of having no information or false information influencing your negotiating posture.
The trick is in hiring the right person. It can’t just be any old mediator or former judge. It has to be somebody with sophisticated people skills, well developed mediation and negotiationskills, sharp business acumen and a persistent personality. There are often unofficial outsiders in deals i.e. brokers, consultants, investment advisers etc. However, these folks don’t have mediation skills, are tainted by perceived allegiance to one party and have their own self-interest that may make them impaired as deal makers.
Bringing in specific deal mediation talent at the onset of negotiations before things haven gotten off track, ensures that the negotiations will stay on track and the chances of a deal culminating dramatically increase. Furthermore, if an ongoing relationship is necessary between the principles after the deal closes, this ensures that there are no bruised egos or damaged personal relationships that have to be weathered post-closing.
Bringing all the resources you have to bolster your negotiating position should be a priority. If you can gain agreement from the other party to hire a deal mediator, the chances for success are improved. If the other party will not agree, still hire a deal mediator to work with your team. Her/his skills will still be useful. I’ve been hired by one party and during the negotiations I began working with their opponent, who began treating me as a confidant simply because of the way I handled myself. I was then able to bring the deal to a successful culmination.
In short, using a deal mediator improves your negotiating position, improves your chances for a successful deal signing, and improves post deal relations between the parties. Wise negotiators anticipate using such talent in their transactions.
Hesha Abrams, Esq. is a nationally acclaimed attorney mediator for over 25 years and is known for crafting highly creative settlements in very difficult cases. She has created settlements worth over $400 million in 2007 alone. She specializes in creating innovative solutions for complex or difficult matters, in commercial and Intellectual Propertycases and "Deal Mediations", which is driving a complex business deal to successful signing. She has the unique ability to work with big egos and strong personalities. Hesha has successfully mediated for tens of thousands of parties and was an innovator in the mediation field serving on the legislative task force that drafted the landmark Texas ADR law, which has served as a model for statutes throughout the US. She created the mediation program for the US Bankruptcy Court SDNY, for the US District Court NDTX, Chief Judge A. Joe Fish, the labor management council at three different VA Medical Centers ending years of labor strife, and many other programs.
She mediates, consults, and negotiates on behalf of private parties throughout the country and internationally. She has worked in the UK, Thailand and India and with parties from all over the globe in complex patent licensing deals.
She taught mediation and negotiation at the 2001 International Symposium on Negotiation and Conflict Resolution, in The Hague. She is on the national panel for Dow Corning Breast Implant cases. and is Chair of the Texas Bar Intellectual Property ADR Committee. She has been appointed Delegate to the Fifth Circuit Judicial Conference, 1988, 1990, 2002, speaker 2005, elected as a fellow of the Texas Bar Foundation- 2006 and received the Brutsché Award for Excellence in Mediation from the Association of Attorney Mediators.
She honed and specialized her unique skills by practicing oil and gas as well as personal injury law in Texas as a trial lawyer and working with those who are dying in Hospice, Suicide Crisis Telephone counseling in Dallas and hospital chaplaincy at Cedars Sinai in Los Angeles. This highly developed psychological skill set is instrumental in her ability to craft agreements with the most intense personalities, emotions and complex situations. It often takes an old warrior to know how to be a realistic peacemaker.
For further information, see www.abramsmediation.com.
