Business Conflict Blog by Peter Phillips
Michael Leathes has written a book on negotiation that is aimed at corporate counsel. In so doing he has given us a clear insight into the challenges of decision making within corporations, and the skills needed for those of us who counsel them. By virtue of his experience and his commitment to both deal-making and dispute settlement, he has also earned our deep respect and a place on my very thin shelf reserved for books that speak definitively to the core of our work in immediately practical terms. I will refer to it frequently when I need guidance, skills refreshment, or inspiration.
It’s not just that Leathes’ volume, Negotiation: Things Corporate Counsel Need to Know but Were Not Taught, is worth the read and constitutes another excellent book on negotiation. It is well-informed, articulate, authoritative, wears its scholarship easily – and it’s just plain useful.
The core virtue of this study lies in the reservoir of real-life experience from which the author draws. The book notes that “Michael Leathes spent his entire career as a corporate counsel with Gillette, Pfizer, International Distillers & Vinters and BAT based variously in Brussels, New York and London.” The reader is therefore the beneficiary not only of war stories about real business negotiation, but also the challenges of working with a team; the difficulties in having a corporate (rather than a single individual) client as ultimate decision maker; and the special considerations that arise from negotiating on behalf of an international entity, with counter-parties from every culture imaginable. It is a heady mix, and as I say the book is entirely distinctive within the robust negotiation literature.
Leathes writes eloquently about the tension between legal training and common sense. For example, he convinced his client to modify its former practice of opposing every trademark application made by a competitor, and instead focusing only on applications that had business consequences, and then communicating with the competitor with respect to their concerns prior to formally opposing. As a result, he reports, “[t]he number of oppositions filed by each company against the other almost halved overnight, along with the costs involved. More interestingly, the dialogue it opened up led to various negotiations for deals over trademark rights that significantly benefited both companies.”
Leathes’ career is the forge in which his lessons on negotiation were learned, and his experiences provide the basis for his conclusions, the proof of their pertinence, and the enjoyment of the narrative by which the book’s content is told. He tells about the joint expert who, the day before the report is due to the arbitrator, makes it known that an additional payment of $30,000 would assure its safe delivery with conclusions favorable to the client. He explains both “leverage” and “anchoring” in the context of initially unsuccessful negotiations with post-revolutionary Iran that eventually succeeded upon the initiation of proceedings before the Claims Tribunal in The Hague – because “we had the more credible BATNA.”
Leathes also relates a story that illustrates what one of my students calls “procedural apology.” An American CEO opened a negotiation by directly saying to his counter-party’s president, “We apologize if you are under the impression that we have misappropriated your technology. That was never our intent.” Distrust deflated, and candor and respect restored, a mutually beneficial license agreement eventually resulted.
Over the years, Leathes has been a vocal proponent of “deal facilitation” – the use of a neutral third party to assist transactional lawyers in identifying and claiming value that, by virtue of the prudent caution that accompanies every deal process, might not be uncovered without facilitative intervention. This section of the book puts Leathes’ argument down on paper in definitive form; one can only wish that, some day, the combination of hubris, inexperience and lack of curiosity that has been the obstacle to this practice might be overcome.
Everyone has their own “boiled-down” list of essential negotiating skills, but Leathes’ list is as good as any I’ve read:
To be most effective, negotiators need to cover a lot of territory:
There are several aspects of the book with which I take issue. “Negotiation is the art of persuasion,” Leathes writes – a premise that I have not witnessed with any frequency whatsoever. Very few are the mediations that I have handled where a party is persuaded to change its fundamental negotiating analysis. Indeed, I think that I have never seen a party say, “Oh, wow, I see now that I was wrong about this and you are quite right – I adopt your view.” Parties may learn that their aims are unobtainable without modification, or they may come to assess what’s on the table as more valuable than what they initially sought, but that’s calculus, not persuasion.
Leathes also includes two chapters – one on neuroscience and one on culture – that I find intriguing but useless in practice. I have never found the application of neuroscience to my work as a mediator; I experience that knowledge to be similar to remembering, during a performance of Tristan und Isolde, that A’ = 440 vps. It may be true but it yields nothing I can use to help the specific parties in the specific room to deal with each other better. As for culture, I have both studied and lived with cultural analytical frameworks – often at Michael Leathes’ urging – and have found the views of Jeanne Brett and Geert Hofstede limiting rather than releasing. To concede that no individual is to be received as a personification of an entire culture seems to me to be inadequate caveat to the thrust of cultural impact on negotiators — which is the general assumption that people of a particular culture may be expected to exhibit certain traits, and that one should be aware of those traits when dealing with individuals from that culture. I rebel against this postulate both as a matter of personal experience and of moral principle. Besides, the biggest obstacle I have faced in China, Switzerland, Nigeria, Singapore or Moscow has not been the culturally-based behaviors of those I meet, but rather my own. I’m a friendly, energetic, large, white, male American, and it’s been through recognizing, anticipating and managing the consequences of other people’s preconceptions of those attributes that I have nurtured the cross-cultural relationships I so cherish.
Leathes also insists that negotiation is not taught in law school, or at least not nearly enough. He has reasons for this conclusion, but I nevertheless doubt it is sound. One need only to refer to the database maintained by the University of Oregon to appreciate that, at least in the United States, negotiation skills training is very widely offered in legal education. It is true that not every young lawyer takes the course, and that one does not need to be trained in negotiation in order either to receive a law degree or pass the bar entrance examination. I add that it is even truer that negotiation skills more urgently belong in business schools rather than law schools. But formal negotiation training is by no means ignored by institutions charged with training young lawyers. Indeed, I’ll challenge Leathes by asking whether Gillette, Pfizer or BAT gives preference to young lawyers who have been trained in negotiation when making hiring decisions — and if not, why not?
The most compelling lessons in the book are not technical, but reflections of Leathes’ own ineffable approach to his work and his relationships with his fellow man. “Most successful negotiations require a bedrock of patience, respect, decency, politeness and courtesy,” he writes. “[S]mall acts of unexpected thoughtfulness can work wonders, provided your motives are not misinterpreted. [S]imple gestures like arranging for a chauffeur to collect the party from the airport for transfer to their hotel sends a welcome signal.” This perception of the key to successful negotiation — treating other people like human beings who are inherently worthy of respect — Leathes is quite right, is not taught. Nor is it teachable, I suggest. Yet it can certainly be learned. There are some people who seem to have been put on the earth to bring out the most creative qualities of others. Michael Leathes is one of them, and by this book we’re all the better for it.
For further information on the book and its author, go to www.MichaelLeathes.com.
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