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Negotiation Tip # 6: Find An Ally

Negotiation Tip # 6: Find An Ally
Pat Dickson - Thu May 31, 2012 @ 01:25PM
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FIND AN ALLY

Here we are again! We have arrived at Negotiation Tip # 6, and there is good news and bad news. Let's start with the bad news first. Yes, this Negotiation Tip # 6, just as so many of the others, relies heavily on the you have two ears and one mouth for a reason rule.

Please be Silent and Listen, and you will hear the good news: Find an Ally is a lot different than the other Tips. This time you let your Ally do all the talking, not your opponent. There are a few simple reasons for this strategy. One is it can save you time. Two it can save you money. In my usual fashion, I will explain myself by telling a story:

"I'm in trouble, sighed Joe. The project was going so well, and now this..."

I finished reading the letter and looked up at him. "So, let me sum this up. The Owner is mad because the decorative steel siding you put up all over campus allegedly doesn't match specifications. Apparently, it doesn't look too bad because the Owner is giving you, the Subcontractor, Dave, the Contractor, and Doug, the Supplier two options: 1) Leave it as-is and you, Dave and Doug figure out a way to pay $100,000 in damages. 2) Tear it all down and put the right stuff up."

"That's it. And number two is not an option. That would cost way more than $100,000. It would probably be about $350k."

"So, who is right?"

"I really don't know. Doug, the Supplier, ordered exactly what Dave, the Contractor, wanted. Dave even filled out the purchase order for Doug. Doug was too confused by the Owner's specs. And then when the siding came, Dave inspected it and told me to start installing it that day. He signed the paperwork and schedule. In fact, he even checked off and initialed the critical path milestone: 'delivery and inspection of decorative steel siding,' per whatever the exact specifications were."

"So is it Dave's fault? Did he do something wrong?"

"That's it. I don't know who is right. I'm just a small shop and I don't know how to read all those specifications half the time. Some Harvard engineers or physicists must write and draw up all that crap. Dave insists the siding was a 'suitable equivalent,' or something like that. He's going to fight the Owner all the way. Doug says Dave was totally wrong and clearly messed up. Doug wants me to go in 50/50 on hiring a lawyer and sticking it to Dave."

"So Joe, you're telling me you don't know which side to take? You don't know enough about engineering or product specifications to form an opinion?"

"Yeah, that's right. I'm just a good metal worker and installer at heart. I'm not an engineer."

"Can you give me a single reason to side with Doug?"

"Well... um... he's been a friend since high school."

"Any others?"

"Well... um... no."

"Do you get any business from Doug?"

"No."

"Do you get any business from Dave?"

"Yes, quite a bit."

"If you make Dave mad, could you lose future business with him?"

"Um... yes. About 30% of my work comes from Dave."

"If you make Doug mad, could you lose future business with him?"

"No. He'd just be mad at me for a bit. We'll be buds no matter what."

"How much will it cost you to split legal fees with Doug?"

"Um, I don't know. How much?"

"It could be $25,000 if you end up mediating and arbitrating this thing. You never know. Just a ballpark guess."

"Dang, I don't have that kind of cash," sighed Joe.

"How much will it cost to side with Dave?"

"Um... nothing I guess. At least at first. Dave said he'd do all the talking for both of us. I just had to stay out of it as much as possible."

"Joe?"

"Who is your ally if you want to save money and time and not lose a customer?"

Joe sighed again. "Good grief. I feel stupid. It's a pretty clear choice."

In the end, Doug spent $30,000 in attorneys' fees. After a lengthy mediation and arbitration process, Dave ended up settling with the Owner for $20,000, and Doug settled for $10,000. Joe was not involved in any of the proceedings. All he did was sign an affidavit Dave's lawyers sent him which detailed nothing more than his installation of the siding upon Dave's instruction. Doug and Joe are still friends. Joe is still working for Dave.

Negotiation Tip # 7

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