I recently closed a very difficult transaction for one of my clients – let’s call my client X Co. The transaction was difficult for a variety of reasons – tight time frame imposed by the other party (let’s call it Y Co), working in three time zones, inconsistent expectations of the parties, new personnel at X Co., and the list goes on. Yet, the most noteworthy reason – Y Co. was not “playing nice”. This was evident in how Y Co.’s counsel and personnel handled negotiations.
Don’t get me wrong, advocating strongly for a client is every counsel’s job. However, communicating the client’s position is one thing – putting down the other party’s position while you are dong so is something else. And, adding your own commentary, ones that speculate on the other party’s intentions (especially when they are negative) is really inappropriate. Moreover, the level of flippancy and sarcasm of Y Co.’s counsel was so over the top that his client sometimes “misunderstood” the point he was making. Y Co.’s counsel’s comments were often laced with cynicism on how my client would “fail” to perform, and his client took this as a cue to challenge my client’s position at every turn. So, when we came to an impasse on an issue and when my client tried to focus on the common ground they shared, his premise was challenged and the discussion would turn argumentative. Sound familiar? It was like listening to the Congress!
So, here is a typical conversation:
My client: “I think we are okay here with the budget process because our interests are aligned – and we would want to do a good job and run the business for you in a profitable fashion – so we would work with you to achieve that”.
Y Co.: “You guys care about your fees, so we can’t trust the process that you proposed. We need to be in control”.
My client: “Yeah, but you’ve hired us to run the business for you – so you can’t be in control if you want us to run the business. Besides, what interest would we have to run a business in an unprofitable fashion?”
Y Co.: “We disagree with you on the definition of what would be profitable.”
STOP! How do you even begin to have a productive discussion with someone who wants to disagree with you, at every turn? And, why would anyone do business with someone who can’t be trusted? What is that all about? Or, did Y Co. negotiate that way becuase it was not getting its way? These discussions became confusing. First, we were talking about the budget process – then our premise of running a profitable business was challenged, and then the discussion morphed into a philosophical definition of “profitable” – veering way off from how the budget process can be improved, the original point. Instead of sticking with the original point, we went round and round in circles – eventually coming back – but only after much time was spent getting sidetracked.
The irony here is that Y Co. was under a tight time constraint, and given the financial incentive that my client was offering, there was no doubt that the deal was going to happen. So, why go through all the painful discussions that had the effect of diluting trust and potentially damaging the relationship? With the time constraint, why waste time to go off topic? Finally, why did Y Co.’s counsel offend X Co. when his client needed our cooperation to timely close the transaction?
What happened did not make sense at all. Y Co. acted against its own interest. X Co. did not like dealing with Y Co. and made negative comments about its counsel – who my client, X Co., is dealing with on other transactions. So, all in all, the deal got done – but how Y Co. and its counsel handled themselves left my client with a bad taste – and perhaps some defensiveness, which ultimately gets translated into future dealings with Y Co.
So, what is the lesson here? Even when Y Co. did not “play nice”, my client was patient, and that was a cue for me to do what we needed to do to get the deal done – so as annoying as Y Co.’s behavior was – the lesson was “ignore it, don’t engage, and get the job done”. For that, I was greatly rewarded by my client’s appreciation. I am was thankful that I had a client who did not lose sight of his own goal of getting the deal done for X Co. – and did not make the situation worse by engaging with Y Co. In the final analysis, even if the other party does not “play nice”, just do what is right for your client…..and all will turn out as it should.