Lessons Learned from Negotiating to buy a new car

     This week I negotiated to buy a new car.  After over thirty years of marriage, this was the first time I did all of the negotiation and took title on my own.  I was struck by how many techniques the salesmen used to close which are also employed by the astute mediator.  Here's how it went down. 
     First, the salesman offered to let me take the car out for a drive.  He had some confidence that this car would "sell itself".  This was a little rapport building.  Then, he searched his computer for a car that met our wishes in terms of color and features.  This was the information gathering stage.  While he did that, he offered us expressos, pastries and even sandwiches.  He kept us there and kept us happy. (We were at the dealership for over two hours on Monday and about three hours on Tuesday.)
     Next, he offered to take my old car in trade at a certain (low) rate, even though it was in the shop for repair with an unknown problem.  We developed a mutual, collaborative process at this point to figure out how I could get rid of my old car and swap for a new car effortlessly and at the least expense.  There was a nice rapport going and even a bit of distributive bargaining on the terms of the purchase and sale.  This was about 4:00 PM, and as is typical in the negotiations of lawsuits as well, things got a little challenging and I needed a break to discuss the pros and cons with my husband.  We left and promised to be back in touch later in the day.
   Then we hit a snag.  The next morning, my husband took my car over to CarMax and sold it at a 20% higher rate than the salesman was offering. 
     Sometimes a particular new development arises in a negotiation which changes the terms entirely.  In those instances, though the negotiating parties may want to follow their instincts and forge ahead, it is better in fact to take a step backward and re-assess.  I had superior bargaining power at that point because I wasn't asking the dealer to take my old car (with 71,000 miles and out of warranty) in trade.  I was able to negotiate a better rate and higher mileage on the lease.
     Now it was New Year's eve and insurance offices and finance offices were closing every hour all over the Country.  My car had been sold and I wasn't sure we could get the deal done on the new one before the New Year's holiday.  I knew, however, that the salesmen wanted to make it happen to boost their 2013 sales.  Another advantage! 
     We got several levels of Managers involved in order to close the deal by 4:00 PM on New Year's eve, overriding their initial offer on higher financing costs.  Clearly, the collaborative process and information exchange which began the transaction served us well as the final details were completed.  And my negotiating skills were completely transferable.  Triumph in four wheels!

Closing the Deal in Mediation: How do you Speed the Process?

As another year has seemingly flown by, I close this year's blog with a question about rushing through the process of negotiation.  After reading the briefs, and 10 years of experience as a mediator,  I am sometimes tempted to predict the outcome of the negotiation and once the discussions get "on track"--would like to get to 6:00 at about 4:00 P.M.  This is, in my opinion, always a mistake! 

Just as childhood or work experience, the trying moments in life pass excruciatingly slowly, yet the years fly swiftly by.  I read an editorial in the New York Times last weekend about a man who worked in a prison where the prisoner wanted to change the clock to mark the months, rather than the minutes that he had left to remain in prison.  Minutes and even hours, were immaterial to him.  Only years matter when he was serving time behind bars.

People in conflict usually come to a mediation after months or years equally imprisoned by their anger, frustration, griefs and fears.  In a single day, we mediators hope to guide them through the ordeal and set them free.  Clients and their lawyers, on the other hand, need to vent and be heard.  Both client and lawyer need a chance to fully articulate their well-considered opinion before compromise can be achieved. Skipping over the facts towards the march to an inevitable negotiation is an error for the overly eager! 

I wish you all a happy and successful New Year and I wish for each of us to have the wisdom and grace to slow down, if only for a moment, before another year has passed.

Know your BATNA and WATNA

Last week's monthly "Settlement Strategies" newsletter talked about the ZOPA and NOPA (Zone of Possible Agreement and No Possible Agreement), in preparation for "winning" at negotiation.

This week I address another set of acronyms:  the BATNA and WATNA.  This stands for the Best (and Worst) alternative to a negotiated agreement.

Once the parties are engaged in litigation, it is hard to step back and genuinely analyze the best and worst possible outcome.  It may surprise you to know that as a mediator, I do not think it is necessary to carefully look at the BATNA or the WATNA until or unless you are presented with a respectable offer.  Before then, you are only speculating, because you only know your side of the equation, not the "alternatives".  After the negotiation has become and when there is an offer on the negotiating table that has some appeal, the lawyer representative should help their clients to engage in a "what if" questioning mode to determine what the consequence of turning down a respectable offer might be.  Will the rejection signal a breakdown in negotiations altogether? Will the conclusion of negotiation trigger a large expenditure in costs to do better? Will the outcome of a pending motion for summary judgment cause the losing party to double or triple their offer? Is it worth the risk?
    
     Looking at your BATNA and WATNA, a term that most business students learn, but law students seldom know will make you look smart and may improve the outcome for your client, too.