Business owners, partners, managers in closely held companies all share a very common trait – they like to do things themselves. Why pay someone else if you can do it yourself? The first question every business owner usually asks before spending money is whether the expenditure will provide convenience, cost savings, expertise, or will it make them more money?
So when should you look at bringing on an attorney (or other adviser) to assist with negotiating a contract, lease, asset purchase, business investment, or other deal on behalf of your company? I’m not talking about for his or her expertise with the subject matter, I’m talking about practical reasons why it might make sense to hire someone to negotiate for you instead of doing it yourself. I believe there are a number of reasons why a business owner could get a better deal by hiring an attorney to negotiate their next agreement and I’ve discussed them below.
You are not comfortable with confrontation or saying “No.”
Negotiations are difficult and this remains true if they are conducted in a polite and cordial manner. There is no avoiding the fact that there is conflict inherent in every negotiation. Some people are not comfortable dealing with that conflict. This leads to bad deals because the you avoid discussing difficult issues instead of dealing with them. This also leads to unfair deals because you are afraid to simply say “No” or are willing to give up too much to avoid the conflict rather than working through it to develop a mutually acceptable resolution.
You should bring in an adviser if you are too emotionally involved to maintain objectivity.
Sometimes you are just too emotionally involved in the deal. Whether because of the deal’s importance to your company or the fact that it is your “baby” that is being discussed and dissected during the negotiations, it is often hard to separate the emotion from the discussion. This can make it difficult to maintain your objectivity and appreciate the other party’s position. This can cause you to reject perfectly reasonable positions taken by the other party due to a defensive or emotional reaction.
Emotions can also drive you to make a bad deal simply to get any deal. Often business owners are so invested in their product or service that they will give up more than they should simply to get a deal done because they believe so strongly in what they are selling that they will make any sacrifice to see it succeed. Instant gratification can be a strong and powerful emotion to contend with.
You should bring in an adviser if the personalities require it to get a fair deal.
Sometimes you just know that you aren’t the best person to handle the negotiations. At the end of the day its about business. Its about getting the deal done. Whether its because of personal issues with the other party or past dealings, sometimes you just know that your involvement will cause the other party to take a difficult posture solely to “beat” you in the deal rather than negotiate reasonably. Using an adviser can mitigate those personality issues because he or she has no skin in the underlying deal. A neutral adviser can also take the air out of a party who is posturing simply to “beat” you because you are no longer involved in making the deal.
You should bring in an adviser if you get too excited.
When you near the end of any negotiation that you have an interest in, it is natural to get excited. Particularly in business, you often see the light at the end of the tunnel and race to get the deal done because carrying out the terms of the deal (and getting paid) is more important to you than negotiating it. Often this can lead you to leave little things on the table that collectively would make a big difference for your company or it could even lead to a bad deal that over looks important details. If your excitement makes it difficult for you to slow down to evaluate and re-evaluate the overall deal then you may do well to hire an adviser to handle the negotiation.
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