Unless your official title is “lawyer” or “agent” you probably don’t think of yourself as an agent. But if you’ve ever represented a family member, your boss, your department, or your organization in a negotiation, you’ve served as that party’s agent.
Representing others at the bargaining table creates both opportunities and hazards. In their book, Negotiating on Behalf of Others (Sage, 1999), professors Robert Mnookin of Harvard Law School and Lawrence Susskind of the Massachusetts Institute of Technology offer guidance to negotiators who find themselves serving as agents.
1. Understand your role. Agents can take on a variety of roles in a negotiation and add value in different ways. You may serve as an informal go-between to your principal, transmitting messages from one side to the other, for example, or you may be more of an enforcer who promotes your principal’s interests aggressively.
Discuss your role and your negotiating stance with your principal in advance, and ask for as much information as you think you’ll need to negotiate effectively on his behalf. To make your responsibilities crystal clear, work with your principal to prioritize a list of his interests. If you are negotiating on behalf of numerous constituents meet with them one at a time to understand any overlapping or conflict interests, advises Tufts University professor Jeswald W. Salacuse.
2. Align your interests. Agents often face a conflict of interest between what’s best for them and what’s best for their principal. If a company’s buyer stands to gain the most financially from doing a quick deal, she might accept an unnecessarily high price from a seller, at her organization’s expense. Such conflicts of interest often operate at a subconscious level, making them difficult for agents and other parties to recognize and address.
How can you minimize your own conflicts of interest? Consider how various types of incentives might affect your motivation level. Incentives can include not only a fixed fee or a percentage of the outcome but also the promise of future assignments, a promotion, or publicity for your work. A salesperson might recognize that the promise of a promotion would benefit both her and her company ore than a bonus would. Talk through the pros and cons of different incentives with your principal well in advance of the negotiation.
3. Secure a strong mandate. Another crucial issue to discuss before talks begin is your mandate – the degree of negotiating authority your principal gives you. In relatively minor negotiations, as in the case of an assistant charged with setting up a monthly departmental lunch with a vendor, a principal may give her agent permission to make commitments on her behalf.
More often, according to Tufts Univeristy professor Jeswald W. Salacuse, a mandate takes the form of instructions about the types of deals you can explore at the table. At the outset of a negotiation, agents are likely to be most effective if they lack the authority to make binding commitments, according to professors Susskind and Mnookin. Lack of authority can free you up to invent options. At the same time, you should press for a broad mandate that will allow you to explore a wide-range of alternatives at the table.