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In a recent article in Foreign Policy Magazine titled: “How Trump can play nice with Russia without selling out America” (January 6th 2017), Michael McFaul, the U.S. Ambassador to the Russian Federation (2012-2014) expresses concern over President-elect Trump’s desire to foster better relations with Putin. He writes “Better relations should never be the goal of U.S. foreign policy toward Russia or any country in the world. Diplomacy is not a popularity contest”.

McFaul’s perspective appears to be that better relations could negatively impact negotiations and the protecting of our interests. He seems to think that with better relationships, we are more likely to make deeper concessions in order to maintain the relationship. His perspective makes sense if we see negotiation as an adversarial face-to-face confrontation, haggling over who will extract greater concessions from the other.

And therein lies the problem!

A very common challenge that we face is how to avoid projecting our own values, fears and concerns onto others, such as our clients or negotiating counterparts. A lawyer for example might go to battle on behalf of a client for the maximum restitution that he perceives possible when the client really wants to settle amicably and move on. A doctor might prescribe an entire arsenal of pain medication when the patient might prefer to live with some moderate pain rather than to intoxicate himself with all those chemicals. A financial advi­sor with a high risk tolerance may talk his client into a high risk/high return investment when his client is far more risk averse.

This becomes a problem when we negotiate across borders and attempt to impose our own values, beliefs and systems onto the other side. What then might be a more effective way to successfully negotiate with those from different cultures to our own?

A major contract was awarded to two large defense contractors who were to work jointly on the project. Each contractor was to design and build different components of the specified system. These components ultimately had to achieve perfect compatibility and work as an orchestrated whole. This required intensive collaboration and communication between the two contractors to ensure an operational and functional system.

Identifying the Challenge

The project appeared to be going well until the final stages when testing began. It soon became dismally clear that there was a flaw in the compatibility design that would require significant redesign and engineering. This would set the project back months if not years and at significant cost. A bitter dispute broke out between the two corporations as to who was at fault. Each asserted blame on the other with equally believable arguments while at the same time neither would accept responsibility.

It was decided that rather than to go to arbitration, the parties would first attempt to negotiate a resolution to the problem. After a frustrating day of negotiations during which the parties were engaged in a barrage of blame and counter-blame, we were retained to mediate the dispute.

A large corporate client was trying, unsuccessfully, to negotiate a long term supplier agreement with a small US electronic components manufacturer with a global reach.

Negotiations had been on and off for several months and was at an impasse. They were not making much progress in terms of pricing, type of contract (sole, dual or multi-source) or mutually acceptable warranties, assurances and other terms and conditions.

Our client had very specific needs to meet their newly instituted just-in-time, lean manufacturing processes, and customer made-to-order products. Although there were alternative suppliers to contract with, they felt that they would get better pricing, high service levels, responsiveness, flexibility and attention from the smaller company that was anxious to prove itself.

Our client was surprised at the cavalier attitude and recalcitrant tenor of the smaller company and would have expected them to jump hoops to get this business. They approached us for negotiation advice and strategy, challenging us to put talks back on track, to repair the strained relationships and to salvage deal.

A U.S based Fortune 500 company that manufactures high-end bio-technological devices was negotiating a joint-venture with a Southeast Asian family-run business that specializes in sales and distribution of lower end medical products in that region.

The U.S company stood to gain access to key distribution channels in that region while the SE Asian company looked forward to greater profit margins in the high end products and equity in the US company.

There were several issues to be negotiated including: capitalization; terms and agreements; profit and equity distribution; staffing; decision-making; and conflict resolution systems (some of which were exacerbated by deep cultural values and differences).

With all the tangible and intangible costs associated with litigation today, mediation is becoming more common as a means of resolving disputes. Judges are ordering or at least recommending them, and contracts are stipulating them as part of their alternative dispute resolution clauses. As a result, good law schools around the country are including mediation and mediation advocacy courses in their curriculum, and many retired judges and lawyers are hanging out their shingles as they build their mediation practices.

Having mediated many disputes across a range of practice areas, I have noticed that attorneys trained and experienced in litigation, do not have the skills to guide their clients through a mediation process. Toward this end, I present some ideas and guidelines to help attorneys counsel and navigate their clients through a successful mediation.

Many of us are very cognizant about what we need to negotiate, but few of us are as aware about how we negotiate. The process that we implement in the negotiation will impact the relationship and ultimately the outcome (or impasse).

I compare the process of a negotiation to the foundation of a building: Just as the foundation protects the structural integrity of a building, so too, the effective process in any negotiation protects the integrity of the negotiation structure. A constructive strategy that has procedural integrity, will build sustaining and enduring relationships as we negotiate, while at the same time, produce optimal and value-generating outcomes.

At the beginning of any complex negotiations, for example mergers or acquisitions, it is common for parties to sign a letter of intent (LOI). Typically, a letter of intent is used as a mechanism to protect parties to a transactional negotiation, during the negotiation and in the event that the negotiation fails.I have also used them in dispute related negotiations. (See my column “Avoiding Litigation in a Litigious Culture.”)

They may contain non-solicitation provisions restricting the potential buyers ability to hire employees from the seller’s business should the parties be unable to reach agreement. It will include other common clauses such as due diligence warranties and indemnification language to protect buyer from prior liabilities of seller.