- We are prepared to make you a very generous offer.
- And we are prepared to reject that offer.
- Michael, you haven't even heard.
- We never accept their first offer.
What is your second offer?
- Stop for a second, it's just not, makes no sense to say
I don't even hear your first offer,
I wanna hear your second offer.
I'm Guhan Subramanian.
I'm a professor at Harvard Law School
and Harvard Business School and I'm the faculty chair
of the Harvard Law School Program on Negotiation.
We're gonna watch a few negotiation clips,
and I'm gonna offer a negotiation perspective
on some of the dynamics that we'll see on the screen.
- What is your second offer?
- 12,000 dollars.
- Are you kidding me?
That is insultingly low.
I don't even wanna hear what your first offer was.
- I think in general you should put
a first offer on the table.
And so especially as a seller of the business,
you should try to anchor the negotiation
at a very high number,
and that's by putting a first offer out there.
- I'm sure you're scared, probably in debt.
That's the best offer you're gonna get.
- I'll see your situation and I'll raise you a situation.
Your company is losing clients left and right.
You have a stockholder meeting coming up,
and you're going to have to explain to them
why your most profitable branch is bleeding.
- As much of a buffoon as Michael Scott is,
this is a really nice move.
So in negotiations there's some terminology
we oftentimes use.
The BATNA is the best alternative to a negotiated agreement.
So the BATNA is what will you do if you don't reach a deal?
And equally important, their BATNA,
what will they do if they don't reach a deal?
Michael Scott does a really nice job of saying, look,
you think my BATNA is so bad?
Let me tell you about your BATNA.
And your BATNA is you're gonna lose your job
if you don't get this thing done.
So it's a really nice display of pretty textbook,
best practice negotiations.
- How's about 60,000 dollars?
- That's a five X increase from his first offer.
So it does suggest that the BATNA assessment
of Michael Scott was pretty correct in that
he has to reflect that in the next offer that he makes.
- My client is prepared to settle
for 50 percent of the marital assets.
- Obviously it's a farce.
It's a nice way of trying to diffuse the offer
that's being made.
- Why only 50 Freddy?
Why not a hundred?
While we're dreaming, why not 150?
- So in negotiations, we've got a concept called ZOPA,
zone of possible agreement.
When you make a first offer,
you can anchor the negotiation in your favor.
The research indicates that it shifts our perception
of where the zone of possible agreement is.
In this case, you go to the room and think you can get
50 percent of the marital assets, but when the anchor is set
at something more aggressive than that,
you feel like I'll be lucky if I can get 25 percent.
So, anchors shift our perception.
- What's your bottom line?
- Primary residence, 30 percent of remaining assets.
- What are you nuts?
- So in general, repeat negotiators have to be more
problem solving with each other
because there's gonna be a next round.
- Freddy, it's a negotiation.
- Walking out of the negotiation is an appropriate tactic.
To stay at the table in this context would signal,
I'll be willing to tolerate your antics,
and you wanna be able to signal, it's just not acceptable.
I often get asked, should I go to their office
or should they come to my office?
I recommend, and I know it's not easy,
but go to their office.
It shows some respect for their time
that you're coming to them, they're not coming to you.
If things really break down, you can leave.
- 65. - 85 Ari.
- I'll give you a 75,
provided that after I do my due diligence,
I don't find out that you screwed up everything I did here.
Yes or no?
- The midpoint of the first reasonable offer
and counter offer is typically a pretty good predictor
where the final deal's gonna end up.
- 85, that's my drop dead number, not a dollar less.
I don't care what you think you know.
- I think that's a potential problem.
When you say things like drop dead, absolute best and final,
this is really my limit,
it does reduce your credibility for the future
if you then agree to something much less than.
- I'll need to hire my own team.
- We can make that work.
- The other firm said they'd lose
a billable hours requirement.
- We just want you working on the cases
that you are passionate about.
- She's playing them off each other,
and sometimes it's very explicit.
In my research, I do find that the competition for the deal
or the perception of competition
can create a lot more leverage
than just the back and forth across the table.
And this is an example of that.
- I'll need complete independence.
No supervisor, no staff meetings, no backseat driving.
- You're great because you're you Annalise.
- Early on, you wanna think about the broad set
of features of the job, your responsibility,
who do you report to?
What does the trajectory look like?
Pay is important, for sure.
As you get more senior, things like elimination
of administrative tasks, you know, being able to focus
on what you love.
Less about mentorship and more about mentoring.
Those things become more important in the mix.
- I've been offered double that amount.
- I find that hard to believe.
- Call to check, I've got offers from
Lindstrom Shorish Group, Summers and Powers.
- Summers and Powers is ranked
the number one firm in Pennsylvania.
- If it's a weaker firm, you might not wanna mention
who it is but you could just say, I've got another offer.
If it's a competitor firm or even a better firm,
you might wanna put that name on the table.
- Give me a few days and I'll think about it.
Lemme think about it.
I'll think about it.
- I think in this context to say, "Give me a few days
to think about it," that is entirely appropriate.
Consult with your spouse, consult with your family.
Think about what you wanna do.
It allows you to shop around some more.
Now, on the law firm side, some of the lower contenders
might have considered making what I call
a shutdown down move.
When she says, "Give me a few days to think about it,"
the law firm might counter and say, gosh,
is there anything we could do right now
that would make it easy for you to accept our offer, right?
That's the kind of thing you could try to do to shut it down
and to get it done in the room because you're aware
that if she leaves the room,
she's probably not gonna come back.
In mergers and acquisitions and other contexts,
if you take a few extra days,
the deal can get taken away from you.
So in general, you wanna keep the deal momentum going.
- Take time to think about it.
- I don't need to, it's not a good fit.
- We just said yes to every one of your asks Ms Keating.
- Well that's because you're basically desperate.
- You might consider saying, hey, I'm about to walk away.
I think there's just no deal to be done,
but before I do that, gimme your best and final.
So to give them a so-called last look
can be appropriate before walking away.
But sure, if there's six or seven possibilities,
drill at one or two, they're just non-starters.
That's entirely appropriate.
The way she's deployed competition and the perception
of competition is really pretty terrific.
It's pretty good.
- I brought in the Popsicle account today on my own.
- Hey Ginger, did you hear about this?
I've gotta go.
- So here she does a pretty good job of saying,
look here's what I do, here's what I've done.
Here's what I've delivered.
And because of that.
- Freddie Robinson's office has been vacant for some time.
I think I should have it.
- It's yours. - Really?
- The thing that gives me some concern is that
she asked for something quite reasonable,
and I wonder is she under asking?
Is she under advocating for herself?
My recommendation would be being aware
of what you're delivering, and then making an offer
or asking for something that's reflecting the value
you're delivering to the company.
What's the ZOPA in this negotiation?
And ask for it.
I'm a little disappointed, and maybe this is
just the inevitable given the context that she's in.
- You young women are very aggressive.
- Oh, I didn't mean to be impolite.
- She's not being aggressive.
She's asking something very reasonable.
In the US, there's research indicating that women
in general, on average, are less likely
to perceive situations as being negotiable than are men.
And as a result, they don't perceive situations
as being opportunities to negotiate.
Now a further troubling finding is that there is a backlash
when women negotiate.
And this guy illustrates that very clearly on the screen
when he says, you know, you're kind of a pain,
you're being very aggressive.
She asked for something, she got it.
Hopefully today she could ask for a lot more.
- How much is it?
- 8,600. - We will give you 10 dollars.
- Now, low balling is a version of anchoring.
If it's reasonable, then it can be an effective anchor.
If it's ridiculous, it has no effect.
And in this case, the 10 dollars is clearly ridiculous.
It has no effect.
- Are you interested in this ring?
- Yes, yes, but I can only pay 8,000 dollars.
- Okay, I can let it go for eight.
- This is a bit rushed.
And so when the guy says, well, what's your offer,
to take a little step away, talk to Phoebe,
come back and say, well what do you think of 7,000,
to me that would've been appropriate.
To just come up with a number,
that's when mistakes can be made.
The only way to really reset
when that kinda mistake is made, is to change the players.
Joey comes back the next day and offers 7,000 for the ring
and they get it done at 7,500,
and then he sells it back to Chandler for that price.
Negotiations is a skill you can really work on and learn
over the course of a career.
Can you become Roger Federer?
You know, probably not.
With all the tennis lessons in the world,
I can't become Roger Federer.
But you can get really good,
and I think that's true in negotiations as well.