We all want to win. If it’s not carved into our DNA, at the very least it’s culturally ingrained from an early age. Not only must we win, but by definition, that win has to be accompanied by a resulting loser.
Unfortunately, if we can’t get past that win-at-all-costs mentality in AFA negotiations, we’re all destined to come out losers.
Seeing Your Way to the Other Side of the Table, and a Successful Negotiation.
On November 30, representatives from law firms and corporate law departments around the country came together for the Second Annual Pricing and Profitability Conference in New York. As the Director of Consulting and Services for LexisNexis – Redwood Analytics, I was fortunate to moderate this event which included two panels and a mock case study focused on the topic of Fixed Fee Negotiations.
What we found there was ample reason for optimism that both sides can not only emerge from AFA negotiations as winners, but that a simple acknowledgment by each side of the other’s goals as legitimate can lead to exactly that.
Consensus Building, Step One: Acknowledging that AFAs are Here to Stay.
Now that most law firms no longer write off AFAs as a passing fad, both sides can negotiate with a more realistic idea of what is expected from them, and what is reasonable to expect from the other.
Parts of achieving that are time and experience, communication, and a willingness to change. Another is the trust each side has to develop in the other that everyone is negotiating in good faith. This is dependent on that time and experience working through these types of negotiations and another key factor I have yet to mention: Data.
Consensus Building, Step Two: Having the Data in Hand to Find Agreement.
Over and over at the Pricing event, we heard both corporate legal departments and law firms speak to the importance of data.
If both sides are looking at similar data resulting in similar conclusions on staffing, caseloads, time estimates, potential efficiency gains, and elements needed to remain out of scope, then a much stronger starting base is built rather than the vague estimates we may have relied on before.
Which is not to say that there won’t be exceptions to the data, or that one case is just like every other. Through our mock negotiation at the event, it was evident that the data provided to each side drove the negotiation style. When one side offered tidbits of their data to the other, styles and responses shifted but the negotiations progressed effectively. The more data we all have, the more comfortable we can be in understanding that we’re starting from the same point: It is what it takes to achieve win-win.