legal corner and
by Joseph McGregor
Negotiations are hard . They get harder when we , as humans , mess them up .
There are a lot of reasons that dental deals fall apart , but I want to point out four common failures : a lack of communication about what happened before the deal started ; a miscommunication on the weight of certain deal points ; lack of communication on the proverbial “ line in the sand ” deal points ; and just plain bad communication skills .
Asymmetric negotiation
Most buyers and sellers know going into a deal that there will be some negotiation . What many buyers miss is that often , the seller has already negotiated against herself prior to the buyer ’ s arrival on the scene . For example , sellers typically have an idea on the worth of their practice ; however , sellers consistently overvalue what their practice is worth to a buyer . Therefore , a seller ’ s broker may have already advised the seller to lower the price prior to listing the practice for sale . In the mind of the Seller , they have compromised on their selling price before communication with a buyer has begun .
When this self-negotiation is not communicated to the other party , it results in a frustration feedback loop . The seller is frustrated that the buyer has further negotiated the price , and the buyer is frustrated that the seller is resistant to what the buyer perceives as fair play . The buyer had nothing to do with that pre-negotiation , but it must still be accounted for if a smooth deal is to transpire .
Misalignment of values
When parties have a lack of communication on the weight each party places on terms , negotiation can fail . If , for example , a seller is willing to compromise on price but not their transition period , but the transition period is also the most important factor to the buyer , no amount of price concession is going to bring a mutually satisfactory conclusion to the deal — the parties have to tackle that transition period . A lack of communication on the matter will obscure the logjam , preventing any meaningful compromise . Parties will feel frustrated that they have compromised on the price but got no concession on the transition .
Hiding the line
As an extension of this problem , each party has lines in the sand that they are not willing to cross on a particular aspect of a deal . Maybe a seller needs a specific tax outcome , rather than the price . Maybe the buyer ’ s bank rate will expire on a certain date and cares mostly about closing the deal . Whatever the issue may be , sometimes there are lines in the sand a party is working to avoid . Sometimes people — and most often , their advisors — think it ’ s prudent to hide where that line is , that somehow it will disadvantage them in the negotiations . This is almost uniformly a mistake . Eventually that line in the sand will surface , but only after heartburn from one or both of the parties .
Communication ability
Finally , sometimes it ’ s just pure old-fashioned bad talking that gets people in trouble . And frankly , if I had to weigh things out , communication skill is probably the most important factor in
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