Shift the axis of dispute

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Negotiation Anatomy

Many hands on the steering wheel makes shite work

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If, as we contrarians like to, we see a negotiation not as a straight, two-dog tussle between buyer and seller, but a multi-dimensional game of passive-aggressive rent-seeking that is merely staged within the construct of a bilateral negotiation notionally between a buyer and seller — think of it as a kind of papier-mâché ecosystem on which a totally different struggle for memetic survival rages — then possibilities open up for those who genuinely seek to move the negotiation on.

Remember the array of agendas here. There are many competing interests — as many as there are players in this drama; more in fact, since any agent has his own interest and his principal’s to juggle — and the interests that ought to prevail: those of the notional “buyer” and “seller” (should we call them “hosts”?) are in practice the most weakly held.

Why should this be? Think in system terms. The battlefield is populated not by loyal soldiers with an unwavering unitary commitment to the defence of the realm, but hastily-roused rabble of rowdy, but confused, mercenaries, not really sure what’s going on, whose side they’re on, where they are meant to be standing or how they even came to be in the middle of this fight in the first place — but grateful for the livelihood it affords them, all the same. But their overriding priority — even above vanquishing the Queen’s enemies — is to preserve that livelihood.

Each of these agents — the negotiators, salespeople, professional advisers, credit committees — is motivated firstly to make whatever it is that they are doing look necessary. This will vouchsafe, as far as possible, that livelihood. What they do doesn’t have to be necessary; just to seem that way to whomever should be paying their bill. That bill should be as large as it can be without seeming out of proportion to the value of the negotiation.

Now here’s the point, and to reveal it we must, for a moment, break through the fourth wall of legal metaphor and lift the corporate veil.

The person having dominion over payment of that bill won’t be the buyer or seller itself, for each is an immaterial shadow: a juridicalperson”, but not a thinking, biting, swearing, actual one. [1] For all our legal fairy tales, a corporation has no bodily extension, cannot think and therefore does not, except to the extent it does so through the worldly agency of its staff.

If you left a corporation, unattended, on the registry record, unchaperoned by any guiding human hand, nothing would happen. It would be inert; passive data in a corporate digital registry. Without its biological staff, a corporation is nothing: in every sense, a “fiction”.

So every aspect of the buyer’s and the seller’s mortal existence is intermediated by agents: even the engagement and remuneration of those very agents. Our corporate overlords are really invalids: helpless, feeble-minded hosts in the folds of whose robes a rich ecosystem of rent-seeking agents make comfortable homes.

Therefore, we should look at each transaction through the prism of the agents — and their agents — who conduct it.

Now, a negotiation between buyer and seller where all concur, at once, that “we are agreed” will not put many coppers in a rent-seeker’s tin. This would suit the sales teams perfectly: their rent is due upon completion. As soon as that happens, they can claim their commission and move on. That is just what they would like to do, as it happens, and they quietly resent the negotiation process for making it so hard. But they are resigned to it: the legal eagles, negotiators, anti-money laundering compliance professionals and credit officers have their own mouths to feed. They will therefore busy themselves providing for hypothetical contingencies that could happen, should the sky fall in on our heads which, if dealt with, may permit “the client” to sleep at night. (This client is a sheaf of papers. It can’t even sleep at night except through the agency of its staff.)

The idea, anyway, is to make a bit of a fuss about these things but never too much to get in the way of someone else’s rent extraction. As long as everyone gets a decent go, all will be well.

But there is an ever-present risk that your careful fusspottery will, in stating your own red line, inadvertently cross someone else’s. Remember, it won’t be your counterparty’s: it is a dumb sheaf of papers filed with a registry.

I’m taking a long time to get to the point, but it is this: there are all kinds of conflicting interests in a commercial negotiation, and the least of them is the one between your client (the legal entity) and theirs. So, ask yourself who it is on their side — which of their agents — who is most personally motivated to get the negotiation done. If you can present your position to them, in a way which maximally appeals to their own interests, you have a chance of shifting the “axis of dispute” from its usual resting place — between opposing legal and credit departments, with sales and negotiation teams as reluctant hostages in either side — to one between their credit team and their sales team. Their sales team, remember, is most likely to be on your side: They want the deal done as fast as they can.

See also

References

  1. We rather fancy a “res legis” in the Cartesian argot.