Adapted from “When You Shouldn’t Go It Alone,” by Lawrence Susskind (professor, Massachusetts Institute of Technology), first published in the Negotiation newsletter.
So, you’ve decided to use an agent in your next negotiation. Now what?
It’s important not to rush headlong into the process of choosing an agent—picking the first one you speak to, for example, and sending him off to talks the next day. You need to choose your agent carefully, then establish a clear, detailed understanding of each other’s responsibilities and expectations. The following are critical steps in picking an agent and negotiating his contract.
- Examine your potential agent’s reputation closely. When choosing an agent, put your needs first. Agents specialize in different fields and have known reputations—differences that can improve or diminish your chances of getting your desired outcomes. You might choose a particular agent because of her previous success negotiating with others in situations similar to yours. Or you might pick someone based on the strong working relationship he has with someone you know. Analyze agents’ reputations from many angles, while factoring in the particulars of your upcoming negotiation.
- Clearly communicate your agent’s responsibilities. After you’ve chosen an agent, it’s time to write out the responsibilities you do and don’t want her to handle. Start by ranking your interests and sharing this list with your agent. A professional athlete might put “performance incentives” at the top of his list as his agent prepares to negotiate his new contract. If the player’s performance has declined recently, he might feel uncomfortable asking team owners for such upside benefits on his own. The player should also specify the degree of authority the agent does and doesn’t have at various stages in the negotiation process. The agent might have a great deal of latitude early on but need verbal authorization from the player as the deal solidifies.
Negotiators often wonder whether they should give their agents a broad or narrow zone of agreement in which to settle. Allowing your agent to explore a broad range of alternatives makes sense, as long as she does not have the authority to make final commitments—which should always be yours to make.
- Link agent compensation to performance. As the “principal,” you may want to include a provision in your agent’s contract that ties his compensation to the achievement of certain negotiation milestones or results. In any circumstance, it is crucial that you ensure that your agent’s interests are tightly aligned with your own. This might mean holding your agent responsible not just for the dollar value of the deal, but also for the quality of the working relationship between you and the other side in the wake of the negotiation.
In some negotiations, you may want to involve an agent just to bring fresh eyes to the situation. This may mean that an agent’s work is “front-loaded” during your own preparations or during an initial brainstorming session with the other side. Keep in mind that when it comes time to accept or reject an offer, negotiators often defer too readily to their agents. If you want your agent to disengage at some point in the process, express that caveat clearly in the contract.
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Related Article: Negotiating with Your Agent