With laws becoming more complex and Canadians more litigious, there’s a good chance that your firm will eventually become embroiled in a legal dispute. If it does, it’s only natural that you’ll want to win. But be careful how you define “win,” warns Henry Krasnow in Your Lawyer: An Owner’s Manual. It doesn’t mean trying to wipe the floor with the other guy, because more than 95% of business lawsuits are resolved out of court by compromise.
To achieve an acceptable deal, Krasnow advises guarding against the classic negotiating blunders that can lead to ruinous legal costs:
1. Don’t get mad — except on purpose. Anger will almost always overwhelm good judgment — both yours and the other side’s. If you make your opponents too angry, they may opt to fight to the death, an expensive form of theatre. It’s alright to use your anger strategically to gain leverage, but not to the point where it makes compromise impossible.
2. Don’t negotiate against yourself. If you make an offer, don’t sweeten it, or reduce what you’re demanding, until your opponents have made a counter-offer. If you do, they’ll rightly conclude that you’ve lost either confidence or patience, giving them the upper hand.
3. Don’t make an absurdly low offer. Don’t be so greedy that you leave the other side with no incentive to respond. If, say, you offer 20% of what your opponents are asking, even though both sides know you have a 60% chance of losing if the case goes to trial, they’ll ignore your ploy. That will force you to spend more on legal fees by sweetening your offer or going to trial.
4. Don’t be insulted by the act of negotiating. A common mistake is to take offence if the other party disagrees with you. That’s especially likely if your opponents are family members, because you’ll be tempted to see their disagreement as a sign that they don’t love, respect or appreciate you. You’re in for a costly battle if, instead of seeking common ground, you make the negotiations about your resentment that you even have to negotiate “after all I’ve done for you.”
