Fee Negotiations Part 6: How You Talk About it Matters

Spend Matters welcomes a guest post from Danny Ertel, of Vantage Partners. Check out previous posts in this series over on Danny's blog.

I'll refrain this time from recapping the prior posts in this series. Suffice it to note that I've had more than a bit to say over the past handful of weeks about how lawyers and clients negotiate their fees. In this post I want briefly to address the question of how well (or not) we communicate about this topic.

One of the problems I have noticed in how many law firm partners negotiate fee arrangements with their clients is that they tend to communicate at a fairly conclusory level: "I estimate this will cost between $X and $Y." Or "If all goes well, we should be able to get this one done for about the same as the one we did last year." Facing internal pressures to bring legal costs down, clients are often equally abstract: "We need you to do it for less." Or "There is no way we can pay that much."

Borrowing a page from my action learning colleagues, let me digress for a moment to describe a useful construct about how people think and communicate. Chris Argyris, Diana Smith, and others have usefully elaborated and applied a simple model, called the Ladder of Inference. This model states that out of the overwhelming and often contradictory mass of data and inputs that our minds encounter every day, human beings select a much more limited subset on which to focus. How do we do that? In part by relying on filters we have implicitly or explicitly created, based on our background, expertise, past experiences, etc. We then further process – i.e., "interpret" – this subset of data, making further application of our expertise, experience, biases, etc., to reach some conclusions about the matter at hand. Finally, we express and advocate that conclusion.

The problem arises when we have to negotiate with someone who has similarly selected a subset of data to "notice," has applied her own filters and biases to "interpret" it, and reached a conclusion that she proceeds to advocate. When we figuratively rise to the tops of our respective "ladders" and argue about our conclusions we often come away thinking the other side is unreasonable, argumentative, and close-minded.

To read the rest of this entry, click here.

- Danny Ertel, Partner at Vantage Partners

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