Negotiation Frontiers: Exploring New Opportunities to Negotiate

By — on / BATNA

When negotiation isn’t the norm, tread carefully.

Many U.S. law schools are in crisis, to hear some tell it. During the recent recession, many law firms instituted mass layoffs and pay cuts, and few have fully recovered. As a result, college graduates are thinking twice about becoming lawyers, and many law schools have fewer high-quality applicants to choose from. In the past three years, the number of first-year U.S. law school students fell by 24%, according to the American Bar Association.

That state of affairs has created fierce competition among law schools for the best applicants—and led them to offer new enticements, such as tuition freezes and reductions and increased financial aid, even as they try to trim spending, writes Elizabeth Olson in a New York Times article on the trend.

The situation has also led to a growing realization among law school applicants that they are in a prime position to negotiate the terms of their admission. “Students are voting with their feet, and demanding a better deal,” Daniel B. Rodriguez, dean of the Northwestern University School of Law, told the Times. “It’s insane. We’re in hand-to-hand combat with other schools.”

Emily Trieber, a first-year student at the Roger Williams University School of Law in Bristol, Rhode Island, told the Times that after the school offered her a scholarship, she successfully negotiated to lower her tuition further, as many of her classmates have. “It doesn’t hurt to ask,” she explained.

The story makes a bigger point: When the deal you’re being offered isn’t as appealing as it used to be, the time is ripe to ask for a better one. But what’s the best way to open up a negotiation when negotiation isn’t the norm? The following three guidelines should help:

1. Focus on BATNAs.

As in any business negotiation, your primary source of power will be your best alternative to a negotiated agreement, or BATNA—your ability to walk away from a deal that doesn’t meet your needs in favor of one that does. For law school applicants, that might mean applying to several schools and, if all goes well, negotiating issues such as tuition and financial aid with each one of them.

When negotiation is not the norm, it becomes particularly important to assess not only your own BATNA but also your target’s. For example, a law school applicant should easily be able to find statistics on enrollment, tuition trends, and LSAT data for the schools he’s considering. Such research would help him identify whether a school is, indeed, struggling to maintain its prestige, in which case it may be open to negotiation, or whether it is holding strong, in which case it may not.

In business negotiations, you should be able to get a clearer sense of your negotiating leverage with a particular party by researching relevant economic indicators, checking media reports, and asking around your network.

2. Set the stage for success.

Rather than opening with strong demands, begin by presenting your well-researched case that a better deal is warranted, whether due to changing economic conditions, increased competition, or whatever the reason may be. In addition, lay out any evidence you have that negotiation is becoming increasingly common in this realm.

You might also increase the other party’s willingness to negotiate by asking questions. For example, you could ask him to confirm whether your research is accurate: “My understanding is that the availability of cheaper parts is driving down costs in your industry; is that correct?” Because your counterpart may be unprepared to negotiate, express your willingness to discuss details after giving him time to get ready.

3. Identify what’s in it for them.

If a counterpart is eager to do business with you and conscious of changing marketplace conditions, it might not be difficult to convince her to negotiate. But what if she resists cutting you a better deal?

In this case, stress the assets you bring to the table, and don’t be afraid to refer to your BATNA. A top-notch law school candidate, for example, could remind her contact in the admissions office of her qualifications and mention the other schools she’s considering. If she has a good offer in hand, she might ask the school if it could improve on the offer or,
at the very least, match it. The message: She has options and is not afraid to exercise them.

In addition, look for carrots you might dangle to lessen your counterpart’s resistance to negotiation. Think in particular about perks that would be easy for you to give and that the other party might value, such as introductions to influential members of your network.

If the other party still refuses to negotiate, you may need to choose between taking what’s being offered and turning to your BATNA. Don’t be surprised, however,
if the counterpart calls you back to the table after the reality of losing you has hit home.

When Negotiation Isn’t Worth Your Time

Popular books such as Herb Cohen’s You Can Negotiate Anything: The World’s Best Negotiator Tells You How to Get What You Want (Bantam, 1982) suggest that virtually everything is negotiable, from utility bills to airfare. But just as spotting new negotiating opportunities is a key skill, so is the ability to recognize when it’s smart to pass on a negotiation.
In their book Negotiation Genius: How to Overcome Obstacles and Achieve Brilliant Results at the Bargaining Table and Beyond (Harvard Business School, 2007), Harvard Business School professors Deepak Malhotra and Max H. Bazerman present several situations in which you might sensibly choose not to negotiate. Here are four of them:

1. When time is money. We sometimes become so fixated on “getting a great deal” or “winning” that we overlook the value of the time we’re devoting to that goal. Prioritize your negotiations so that you have enough time and other resources for more important negotiations and activities that you value.
2. When you have no good alternatives. If you have a weak BATNA—a lack of alternatives—it may make sense to accept the deal being offered rather than risking it by trying to haggle. Then, after you have the deal in hand, you might ask for better terms by appealing to your counterpart’s sense of fairness or altruism.
3. When negotiation sends the wrong signal. In certain situations, such as being offered a plum assignment at work, initiating a negotiation may signal that you don’t trust the other party or that you’re ungrateful. In such instances, you might choose not to negotiate, or you might ask for more information as a way of inviting the other party to initiate talks.
4. When negotiation is culturally inappropriate. In our own culture, we tend to know when it’s appropriate to negotiate a better deal (at a car dealership, at an antiques market) and when it’s not (at the grocery store, at a coffee shop). When we visit those in other cultures, we often violate their norms for negotiation. Before negotiating with someone from another culture, research the relevant norms so you won’t cause offense.