law library

P R O G R A M O N N E G O T I A T I O N A T H A R V A R D L A W S C H O O L AN INTER-UNIVERSITY CONSORTIUM TO IMPROVE THE THEORY AND PRACTICE OF CONFLICT RESOLUTION

THE LAW LIBRARY T E A C H E R ' S P A C K A G E

Review Copy Do Not Reproduce


This case was written by John Palenberg for the Harvard Negotiation Project and revised by Elizabeth Gray, Deborah Winter and Wayne H. Davis and further updated by Robert C. Bordone. It was inspired by a somewhat similar scenario created by Professors Edwards and White at Michigan Law School. Copies are available at reasonable cost online at www.pon.org, Telephone: 800-258-4406, or Fax: 617-495-7818. This case may not be reproduced, revised or translated in whole or in part by any means without the written permission of the Director of Curriculum Development, the Program on Negotiation, Harvard Law School, 518 Pound Hall, Cambridge, MA 02138. Please help to preserve the usefulness of this case by keeping it confidential. Copyright 8 1982, 1985, 1987, 1991, 1995, 2002, 2005 by the President and Fellows of Harvard College. All rights reserved. (rev. 7/05)

THE LAW LIBRARY

TEACHING NOTE Purposes of the Session

1. Help participants become more conscious of process.

2. Help participants learn the value of preparation. 3. Help participants learn to create value by focusing on interests and generating

options.

4. Help participants understand the concept of BATNA.

5. Illustrate the persuasiveness of objective criteria.

6. Help participants become aware of their unconscious assumptions/instincts about what constitutes "success" in negotiation.

Suggested Format

Have one or two demonstrations in front of the class:

1. Pick a buyer who got a low price. Pick a seller who got a high price. Ask them to assume there had been no prior negotiation, and to negotiate with each other in front of the class.

Warn that you may interrupt the demonstration or cut it short (but not on the first one).

Ask class to observe, take notes. Look for matters of process and technique.

What were you looking for? What surprised you? What seemed to work? Why?

THE LAW LIBRARY B Teaching Notes

Copyright 8 1982, 1985, 1987, 1991, 1995, 2002, 2005 by the President and Fellows of Harvard College. All rights reserved. (rev. 7/05) 2

How would you replicate it? What would you do differently?

2. Pick a student who wants to play a hard positional bargainer and a student who wants to use principled negotiation techniques. Again, ask them to assume that there had been no prior negotiation, and to negotiate with each other in front of the class.

IN TRYING TO DEMONSTRATE PRINCIPLED NEGOTIATION:

(a) Listen

(b) Be warm and friendly

(c) Avoid quarrelling

(d) Stand above or apart from differences and explicitly consider how they might best be resolved. ("You suggest the price should be the cost of new books. I have suggested I might better any firm offer you have. How might we best resolve the point?")

(e) Be open to persuasion. ("If we can afford to do so, I am willing to pay a

fair price once I am convinced that that is the fairest price. Why is that price fairer than...")

(f) Be principled. ("A fair selling price to a dealer is perhaps $----; a fair

buying price from a dealer is perhaps $----. Neither of us is in the book business. We both should benefit from eliminating the middle man. Let's divide fairly the $---- saving. Can you think of a way that is fairer than splitting that 50-50?")

(g) Be prepared to make a firm and fair offer- and leave it open for 24 hours.

(h) Turn it from adversarial haggling into side-by-side solving of the problem

of what is a fair price under these circumstances?

[Hand Out LAW LIBRARY CRITERIA SHEET]



DISCUSSION

Review observations, in light of Seven Elements1 (Brief descriptions of the Seven Elements:) 1. ALTERNATIVES - These are the walk-away alternatives that each party has if agreement is not reached. 2. INTERESTS - This is the word we use for what somebody wants. Other things being equal, an agreement is better to the extent that it meets the interests of the parties. 3. OPTIONS - An agreement is better if it is the best of many options; if it could not be better for one party without being worse for another. 4. LEGITIMACY - An agreement is better to the extent that each party considers it to be fair as measured by some external benchmark, some criterion or principle beyond the simple will of either party. 5. COMMITMENTS - Commitments are oral or written statements about what a party will or won't do. 6. COMMUNICATION - Efficient negotiations require effective two-way communication. 7. RELATIONSHIP - Whatever else a relationship may involve, one crucial aspect is a ability to deal well with differences. One dimension of the quality of the resulting working relationship: Are the parties better or worse able to deal with future differences? Review the negotiation generally

(not focusing just on the demonstrations)

1 Written by Roger Fisher for the Harvard Negotiation Project. Copyright by the President and Fellows of Harvard College. All rights reserved.



Option:

"Let's nominate some issues to talk about? What are some subjects that we might like to discuss in reaction to your own negotiation and to the demonstrations?"

BATNA

Criteria

Relationship issues?

How measure success? (Purpose)

How prepare?

What others got?

(Maybe write key words on the board, to help provide a sense of structure to the

discussion.) Some Points for Discussion 1. BATNA. BATNAs are objective but are not necessarily fair criteria of what an outcome

should be (although they can be). If you talk about your BATNA, it should sound like a warning, not a threat.

2. Objective Criteria. Criteria can be used as justification for hidden, lock-in positions, or

as determinants of what the outcome should be (with underlying flexibility, at least within BATNA range). Experience indicates that many more people think they can successfully pretend to be flexible than actually can. Most people have an excellent nose for sincerity and real flexibility. (Politeness and discomfort with conflict, however, usually keep them from calling positional actors on their act.)

Will principled negotiators get taken by a tough guy? A tough bargainer who (a) knows or can guess the other side's BATNA and (b) does not mind taking a risk, will sometimes get a favorable price by locking her or himself in. ("The most I think a dealer would pay you is about $11,500. I will offer you $11,800, take it or leave it.") But it is a high-stakes gamble, she or he may lose, and the move is almost certain to damage the relationship.

The people who usually get taken are those who are simply uncomfortable with conflict or with asserting themselves or their ideas. Occasionally they will (despite our best efforts) misinterpret "insisting on using objective criteria" as "accept anything that can be justified with objective criteria." At a minimum, in a group where people negotiate with



each other over time, hard guys do not get the best results.

Most positional bargainers are doing what they have learned from others. Only a few are committed "jungle fighters" who get their satisfaction from the conquest. Hence most will go along with the rules of principled negotiation without much fuss, provided (1) their fears about getting taken are alleviated, and (2) they don't get the sense they are dominated. The recalcitrant jungle fighters may instead make it a game of chicken. Who wins at chicken depends on your risk aversion. Take a careful look at your long-run interests in reputation. However, if ever you see chicken on the horizon, first look to your own behavior to see if part of the cause lies there and can be corrected. Look for an alternative.

Insisting on using objective criteria and being open to reason does not mean abandoning the role of advocate. In court, lawyers persuade judges advocating principles and objective criteria that favor their cause. Two good judges discussing a decision with each other do the same, while indicating their openness to persuasion. You can be just as much of an advocate in negotiation as you would be in court. (Don't go beyond that though. If an argument is too extreme to persuade a neutral judge, it is unlikely to persuade the opposing party.) Advocate as you would to an arbitrator, listen as if you were the arbitrator.

Some people ask, though, whether honestly talking about interests, options, criteria, and so on, in other words giving the other side information, isn't a sign of weakness or giving away an advantage. You may be giving away "bargaining chips" things you don't want that they do and that you could trade for something you want. If the game you are playing is positional bargaining, this is true to some extent. However, if you don't take their word for what they want and you insist on outcomes that can be justified as fair and appropriate, then talking about interests is an efficient and safe approach. This does not require disclosing information that could be used to blackmail you, such as how bad your BATNA is.

3. Relationship. Conduct each negotiation so that the next one will be easier. Be

trustworthy. Don't trust others without cause unless you are trying to motivate them to be trustworthy (and keep the stakes small until you have reason to make them larger). Don't make promises you can't keep. Always consult before deciding about things that will affect them. Consulting does not mean abdicating the power to decide.

4. How to measure success. From childhood or whatever, some people really do believe at

base that the world is dog- eat- dog. They measure success as doing better than someone else. Often the ego and sense of security is tied into it. They sometimes find it hard to believe that other people are happy if their interests are well-satisfied and they don't feel taken, even though the other side also did well.

One reason some dog-eat-dog types find it hard to admit the possibility of their approaches is that it undermines their justification for doing things that they believe



would otherwise be wrong. If you sense this, you need to help them get out of the right/ wrong trap. They are right about the world in the sense that many other people also think and act dog-eat-dog. That simply isn't the only possible approach; there are many people who don't follow it, and there is some room to persuade others to change.

5. Preparation. Preparation is knowing the terrain, not memorizing a single path through

the woods. A good negotiator is at least as familiar with how the other side may look at the situation as how their side does. And a good negotiator is prepared to make their presentation in the terms that are most familiar and important to the other side.

How much research did the student do? Did anyone call a book dealer? Did they find out about storage costs? Did they estimate the size of 300 volumes? Talk to the librarians in the library?

6. Results. There is no duplicate bridge. Each group make somewhat different

assumptions that make direct comparisons hard to interpret. We cannot deny that there is some valid data there, however. The key is not to judge your performance as good or bad, but to figure out what worked and what didn't, why, and how to replicate that success or avoid that problem in the future. This case is about becoming better negotiators, not finding out how good you are. We all have plenty room to improve.

7. Inventing. There are plenty of creative possibilities in The Law Library. Most law firms

get a lot of clients through referrals. Some thinking about that seems appropriate here. One group I watched agreed that the seller would continue to have access to the library in its new location. Paying over time is a standard option. Shipping by slow mail is another, to avoid storage and reduce shipping costs.



THE LAW LIBRARY

CRITERIA SHEET Q: What principles did you discuss? How did you apply them? (Did you use them as

justifications or as criteria for decision-making?) Some Principles That May Suggest a Fair Price for the Books

1. Price of books if purchased new today ($30,000) + transaction costs of finding books ($2000 -- $4000)

2. Price of books when bought ($24,000) 3. Price they could be sold for to a used book dealer ($12,000)

4. Ability to sell these books to a similar (private) buyer (highly unlikely)

5. Cost of similar used books if they could be found through a used book dealer

($21,000 - $24,000) 6. Ability to find similar used books (could not find all of them)

7. Condition of books (excellent, 30% never used)

8. Age of books (less than 10 years, 10 - 20 years, 20+ years)

9. Extent to which the collection of books includes some volumes the buyer is not

interested in.


LAW LIBRARY: Critera


Q. What was your BATNA? What did you think their BATNA was? How did you use

BATNA's? Were they discussed openly? Reservation value is crucial. It's what you have to evaluate any offer against.

1. Buyer's: $21,000 to $24,000 for used books

2. Seller's: $12,000 if sold to the law book clearinghouse.




THE LAW LIBRARY Confidential Instructions for the Sellers -- Burns & Burns You are a second-year associate with Burns & Burns, a respected law firm in Washington. Burns & Burns is about to undergo a major change. In three weeks, the firm will divide into two parts. You will stay on as an associate with the smaller of the two partnerships created by the division, Burns & Allen. Burns & Allen will receive half of the old firm's magnificent library. Because the new firm's need for a complete and adequate library is greater than its need for half of a splendid library, the Burns & Allen partners have decided to sell 300 volumes from their half of the old collection and to replace them with expanded online services. The decision fits in well with the new firm's commitment to modernization and innovation in the practice of law. While most of the treatises and serials among the 300 volumes are up-to-date and serviceable, they generally relate to Japanese commercial law, an area which the new firm will eliminate or de-emphasize, and are therefore dispensable. You have been advised that, after viewing an inventory of the collection, Jones & Solomon (a San Francisco law firm) is interested in purchasing the entire 300-volume set. You have been appointed to negotiate the deal. It is fair to assume that Jones & Solomon's managing partners want the collection to beef up their bank of Japanese legal materials. The collection contains many items essential to carrying on a practice involving trade with Japan. In addition to the usual treaty collection, GATT schedules, the "Digest of Commercial Laws of the World" (an 8 or 9 volume set), it contains the Japanese Annual for the past 15 years. This set (one volume per year) is a translation into English of all the Japanese commercial law cases. The collection also includes a 12-volume translation of the Japanese commercial and tax codes. About 40% of the collection consists of reporters and treatises. The latter are particularly useful. The remaining 60% of the collection is comprised of looseleaf services of international law, dating back several years. These services are very expensive, and are heavily used in any legal practice involving international law. In addition, most of these materials are still not available online through Westlaw or Lexis.


THE LAW LIBRARY – Confidential Instructions for the Sellers: Burns & Burns


Most of the 300 law books on sale are in very good condition. In fact, because a large number of them were purchased for areas of the practice that never "took off", approximately 30% of them have never been used. Since the negotiations will take place in your office, you will be able to demonstrate the fine condition of the books with ease. Your firm's librarian estimates that the aggregate cost of the 300 books, some of which were purchased decades ago, was roughly $24,000. (About 10% of the collection was purchased 20 or more years ago, about 20% between 10 and 20 years ago, and the remaining 70% was purchased within the last 10 years.) The same books or their substantial equivalents if purchased new today would probably cost around $30,000. Of course this latter figure does not reflect the high costs of locating and rounding up all of the books. Because the collection is unique and somewhat obscure, that cost could be substantial, perhaps $2000 to $4000 by the estimates of your librarian. Regrettably, your firm has been unable to sell the books to any Washington firms. Some interest in small portions of the lot has been expressed, but few buyers seem interested in a comprehensive lump-sum deal. One party, a law book clearinghouse, has offered your firm $12,000 for all 300 books and is willing to pick them up from your library. The partners of Burns & Allen are counting on you to come up with a better offer. When you left your supervising partner's office earlier today, he said, "Sell the books. Get a fair price. And (wink) get them to pay the postage and handling." The cost of shipping the books first class might run as much as $1100. You could, perhaps, ship them at a bulk rate for a third of that cost. The firm's librarian a few minutes later approached you and said, "Please get those extra books out of here. It will cost the firm money and me my sanity if I have to fool with them while we move to our new location. We only have two weeks left, you know."



This case was written by John Palenberg for the Harvard Negotiation Project and revised by Elizabeth Gray, Deborah Winter and Wayne H. Davis and further updated by Robert C. Bordone. It was inspired by a somewhat similar scenario created by Professors Edwards and White at Michigan Law School. Copies are available at reasonable cost online at www.pon.org, Telephone: 800-258-4406, or Fax: 617-495-7818. This case may not be reproduced, revised or translated in whole or in part by any means without the written permission of the Director of Curriculum Development, the Program on Negotiation, Harvard Law School, 518 Pound Hall, Cambridge, MA 02138. Please help to preserve the usefulness of this case by keeping it confidential. Copyright 8 1982, 1985, 1987, 1991, 1995, 2002, 2005 by the President and Fellows of Harvard College. All rights reserved. (rev. 7/05) .

THE LAW LIBRARY Confidential Instructions for the Buyers -- Jones & Solomon You are a senior associate with Jones & Solomon, a small but rapidly expanding law firm in San Francisco. Recently, you found out that the firm of Burns & Burns, a Washington, D.C. law firm, was splitting up into two separate offices, each of which will take roughly one half of the old firm's library. You have learned that the smaller of the two offices is offering 300 volumes from its half of the old library for sale as a collection. You suspect that the smaller office is strapped for capital and that the books being offered are not central to its intended areas of practice. You have viewed an inventory of the offering and think it would be very useful to your firm in the future. The collection contains many items essential to carrying on a practice involving trade with Japanese companies. In addition to the usual treaty collection, GATT schedules, and "Digest of Commercial Laws of the World" (an 8 or 9 volume set), it contains the Japanese Annual for the past 15 years. This set (one volume per year) is a translation into English of all the Japanese commercial law cases. The collection also includes a 12-volume translation of the Japanese commercial and tax codes. About 40% of the collection consists of reporters and treatises relating to the area of Japanese commercial law. Most of these are up-to-date and serviceable. The remaining 60% of the collection is comprised of looseleaf services of international law, dating back several years. These services are very expensive, and are heavily used in any legal practice involving international law. It turns out that many of these materials are still not available on Westlaw or Lexis and may not be available for several more years. It is clear that at least three-quarters of the books would make excellent additions to the Jones & Solomon library. You are not familiar with the remainder, but you assume that many of them would be worth retaining. None of the books has much intrinsic collector's value. The Jones & Solomon management committee has assigned you to negotiate the purchase of the entire 300-volume set with a representative from the dissolving Burns & Burns firm. (Since you are in Washington this week on business, you were the obvious choice.) Jones & Solomon is not flush with capital. Nonetheless, you have been authorized to spend, for


THE LAW LIBRARY – Confidential Instructions for the Buyers: Jones & Solomon


the year, up to $30,000 for law books. This figure is equal to your estimate of the cost of the 300 law books being offered for sale if purchased new today. Note that if you expend all $30,000 in your dealings with Burns & Burns, you will be exhausting the firm's remaining library budget for the year. You have found that, although you could purchase many of the books being offered by Burns & Burns from commercial used booksellers, it would be virtually impossible to assemble some of the series in the offering without tremendous patience and a global search. You have estimated, however, that if it were possible to buy all 300 books used from a commercial dealer, the cost would probably be between $21,000 and $24,000, excluding transaction costs. You know that the 300 books were purchased over many years. (About 10% of the collection was purchased 20 or more years ago, about 20% between 10 and 20 years ago, and the remaining 70% was purchased within the last ten years.) You have no idea of the original purchase prices. You have a general idea of their condition (fair to excellent). If Jones & Solomon acquires the collection, the firm's library space will have to be expanded dramatically. Accordingly, the collection should not be shipped from Washington for at least another five weeks. The storage costs for the books in San Francisco would probably be about $400 per week or $1200 per month. There is no pressing need for your firm to acquire the entire 300-volume offering now. Your firm's burgeoning practice, however, necessitates that the firm at some point acquire the capacity to research Japanese law quickly and cheaply. The acquisition of a handsome library might also enhance the firm's prestige. You consider yourself a successful negotiator. With the decision on whether or not to offer you a partnership glimmering on the horizon, a successful outcome would not harm your cause.


law library

Documents