The Psychology of Negotiations: Managing Conflict and Personalities in International Transactional Lawyering

By Kelly Woolfolk

This post is a reflection on Professor Jay Finkelstein and Professor Hilary Gevondyan‘s Berkeley Law course, International Business Negotiations.

In the most general sense, negotiations are about problem solving. From the onset of preparing for a negotiation, particularly when the situation highlights cultural and personal distinctions as in cross-border transactions, evaluating strategies for dealing with and drafting even preliminary communications to an opposing party is a critical step in creating a fertile, receptive environment for the exchange of ideas. Whether one is open or obliged to consider input from multiple sources—through colleagues, superiors, data or other parties to the deal—and synthesize that input into a cohesive plan of action, significant challenges will undoubtedly arise and require skillful maneuvering throughout the process.

Lawyers are paid to identify, mitigate or eliminate risks and obstacles to transactions. At first glance, one might assume that the source of most problems in a transaction hails from external forces. In fact, many of the most significant problems that arise often come from within one’s own team. Deciding what style of communication to embrace and how tough to be on certain issues may be consistent sources of tension and dissension within a firm or organization. This failure of consensus can create wide enough divides to permeate communications to opposing parties and present a team as unstable; not a desirable quality for high-stakes international business deals. In essence, negotiating teams need to communicate “in a single voice.”

Where parties face stringent internal discord, lawyers can increase their value during a transaction by finding ways to eliminate the appearance of instability within a corporation or other organization, smoothing the path to a deal, and even making the deal sweeter for the parties involved. When a party to a transaction recovers a sense of confidence about making the deal, often even greater benefits than initially contemplated may result. In this sense, the role of bridge-builder or facilitator cannot be overstated. Thus, negotiators must also be bridge-builders.

The key to most successful business ventures is good relationships. People tend to do business with people that they like. So, while each party to a transaction may have formidable resources, reputations, or positions with which to bargain, if there is no movement in advancing the deal, then none of that matters. An impasse is a death sentence in transactional practice signaling a failure of potential to generate revenue or develop relationships. A keen lawyer-negotiator will assess where and why the breakdown occurred, then attempt to repair the rift through savvy and strategic relationship building and cultivation. This bridge-building skill, perhaps above all others, is where many transactions succeed or fail. Many traditionally trained lawyers never focus on or appreciate the immense value of developing relationships and suffer professionally as a result. Even where perceived rivalries exist, a savvy practitioner can find a niche of commonality with an opposing party and thereby create an “in” with the other side—something which may, at the end of the day, save an entire deal. Conversely, where lawyers view strategy as an US vs. THEM undertaking, and where this atmosphere is satisfactory, even second-nature, holding ground for many, it would behoove the wise to overcome this deeply-felt positioning if they are to accomplish anything.

Despite any apparent or historic rivalries among parties, the most challenging negotiations often faced come from within one’s own team or organization, as previously identified.  The struggle for consensus and for getting people to abandon the hardcore approach against an adversary may be an exercise in one’s ability to manage her own expectations of others, pull back on one’s own reins and not force a position when instincts scream that the team is off course. In effect, a level of negotiating with oneself, trusting that allowing others to forge ahead despite one’s opposition to their method would nevertheless provide an opportunity for one to assert one’s opinion later in the process, when team members may be more receptive. In other words, sometimes, in order to be most effective, you have to let people discover their own missteps. Learning is often far more valuable when it develops organically, as opposed to having someone rub your nose in your mistake.

Successful negotiation is something of an art. The best negotiators often utilize less quantifiable but highly effective skills such as flexibility, grace under pressure, a keen sense of when to pull back and when to press forward, and intuitive strategic abilities. While practice can sharpen many of these skills, most are the result of individual personalities, which may explain why some people are more suited to litigation or other careers where “softer” skills and personal interaction are less important.

Observing the many personalities among a team can be extremely useful in determining how to address issues that require attention. Without information about how different people approach consensus building and conflict resolution, the team may choose the wrong person for a pivotal role in the negotiation and potentially blow the deal. Therefore, taking a back seat in some of the decision-making that occurred may be a great opportunity to listen and learn about a team. Listening is a skill that doesn’t normally receive the attention it deserves. But what a difference it makes. At times, we may be more invested in “controlling the process” or advancing our interests than in gaining whatever advantage there might have been by listening for clues. Most people are willing to admit that they can be better listeners. However, it is very easy, especially as a trained advocate, to dismantle an argument and prepare a seamless line of reasoning, all while staring at the moving mouth of an adversary. But when a party feels unheard or we simply have failed to pay proper attention to the cues inherent in speech and body language, we miss great opportunities to find common ground and make progress.

Finally, engaging in “back channel” negotiations can be an invaluable and even fun part of a negotiating experience. U.S. culture generally teaches aggression and offense as effective methods of achieving a goal. The “We are Americans, world dominators!” mentality is apparent throughout U.S. culture. Having this inbred identity makes it hard for many of us to consider a more docile approach. Gentleness becomes weak, a loser’s posture, setting oneself up as prey. In fact, words such as “weak” and “losing” routinely describe the notion of approaching a negotiation from a less aggressive standpoint. Yet when negotiations occur after easygoing and friendly back-channel or sidebar type meetings, there may be a spontaneously sense that something has gone tremendously right, that the deal is proceeding much better. Taking a softer, more personal approach can be effective after all. In order to avoid envy or distrust, communication within a team or organization should be open and continuous so as to create a feeling of unity within the group. Overall, negotiations begin and end with broad considerations of others, whether they are across the table, the office, or the world.