Project Negotiations

• 02 March, 2021

1. Know that negotiating is not for everybody:
   
   
   • Reflect on your own communications style and preferences.
   • Try to measure your confidence level.
   • Do you find negotiating difficult?
   • It may be better to defer to another team member to negotiate certain things that may come-up on projects, and there is nothing wrong with that.
   • Knowing your own strengths as well as being aware of your challenges will help you make the right decision to negotiate or to delegate the negotiation.
     
     
2. Do your research:
   
   
   • How much do you know and understand about the issue to be negotiated?
   • Is there a history of something similar previously occurring in your firm?
   • Is there a known history with the other party (client, contractor, consultant, jurisdictional official, etc.)?
   • Conduct a review of the issue against the industry standard of care as needed.
   • Conduct web research on the issue if appropriate.
     
     
3. Get to know the people involved and what motivates them:
   
   
   • Does your firm (or do you) have a history with the person on the other side of the issue being negotiated?
   • What position does the person representing the opposite side of the negotiations with you have within their respective company?
   • What authority do they have?
   • Try to estimate their motivation to negotiate a certain outcome. Are they an owner just trying to get something "made right"? Are they trying save themselves money? Are they the owner, or owner's rep?
     
     
4. Understand your leverage position:
   
   Leverage in negotiations is the power that one side has to influence the other side to move closer to their negotiation position.
   
   
   Examples of leverage: The client wants you to make a change in the design of a project that clearly falls outside the current scope of work, but they also have a serious deadline for completing the project (such as a critical move-in date). You could leverage the position that you won't begin making the requested change until they process a modification to the contract. In this case, you may be leveraging them to process and approve additional fees associated with making the requested changes.
   
   
5. Understand the other party's leverage position:
   
   
   Here is an example working the other way, where the other party has (and is likely to use) leverage against you. The design team has proceeded with work on a project beyond the latest client approval at schematic design (i.e., you and the team are now well into the construction document phase of the project). The client hasn't paid your invoices past the schematic design phase and has now put the project on hold. The client's leverage is that the team has worked ahead of the schedule/approvals and the firm hasn't been paid. The client may (and likely will) want to negotiate away some or all the design development fee earned/billed. Leverage advantage is clearly with the client in this case.