MULTI-ISSUE NEGOTIATION Easy or Hard Issues First? (The answer might surprise you!)

BACKGROUND

A U.S based Fortune 500 company that manufactures high-end bio-technological devices was negotiating a joint-venture with a Southeast Asian family-run business that specializes in sales and distribution of lower end medical products in that region.

The U.S company stood to gain access to key distribution channels in that region while the SE Asian company looked forward to greater profit margins in the high end products and equity in the US company.

There were several issues to be negotiated including: capitalization; terms and agreements; profit and equity distribution; staffing; decision-making; and conflict resolution systems (some of which were exacerbated by deep cultural values and differences).

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TIPS FOR GUIDING YOUR CLIENT THROUGH THE MEDIATION PROCESS

INTRODUCTION

With all the tangible and intangible costs associated with litigation today, mediation is becoming more common as a means of resolving disputes. Judges are ordering or at least recommending them, and contracts are stipulating them as part of their alternative dispute resolution clauses. As a result, good law schools around the country are including mediation and mediation advocacy courses in their curriculum, and many retired judges and lawyers are hanging out their shingles as they build their mediation practices.

Having mediated many disputes across a range of practice areas, I have noticed that attorneys trained and experienced in litigation, do not have the skills to guide their clients through a mediation process. Toward this end, I present some ideas and guidelines to help attorneys counsel and navigate their clients through a successful mediation.

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"PROCEDURAL INTEGRITY – Building Relationships As We Negotiate"

INTRODUCTION

Many of us are very cognizant about what we need to negotiate, but few of us are as aware about how we negotiate. The process that we implement in the negotiation will impact the relationship and ultimately the outcome (or impasse).

I compare the process of a negotiation to the foundation of a building: Just as the foundation protects the structural integrity of a building, so too, the effective process in any negotiation protects the integrity of the negotiation structure. A constructive strategy that has procedural integrity, will build sustaining and enduring relationships as we negotiate, while at the same time, produce optimal and value-generating outcomes.

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"THE LETTER OF INTENT - A USEFUL TOOL TO HELP ADVANCE PRODUCTIVE NEGOTIATIONS"

THE FUNDAMENTAL PURPOSE OF THE LETTER OF INTENT

At the beginning of any complex negotiations, for example mergers or acquisitions, it is common for parties to sign a letter of intent (LOI). Typically, a letter of intent is used as a mechanism to protect parties to a transactional negotiation, during the negotiation and in the event that the negotiation fails.I have also used them in dispute related negotiations. (See my column "Avoiding Litigation in a Litigious Culture.")

They may contain non-solicitation provisions restricting the potential buyers ability to hire employees from the seller's business should the parties be unable to reach agreement. It will include other common clauses such as due diligence warranties and indemnification language to protect buyer from prior liabilities of seller.

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"UNDERSTANDING THE MAGIC OF MEDIATION"

INTRODUCTION
When negotiations stall, a good mediator can help both sides move forward.

When disputes escalate into bitter confrontation or litigation, and parties to the dispute are unable to reach any resolution, it is not uncommon for a neutral mediator to be brought in and within a very short time, the issues are magically resolved to the satisfaction of all parties.

Consider the following case: The research and development department of a pharmaceutical company had spent two years developing a highly potent topical cream that would deliver hormones to hormone-deficient patients without the common side effects of alternative oral supplements. They then sold a license to a large distribution company to re-brand and package it for resale. A few months after the distribution company went to market, it was discovered and reported that the cream had lost its efficacy due to a chemical breakdown upon packaging.

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