This is where the proverbial rubber meets the road. You’ve laid the groundwork and each firm that you chose to engage with is ready to talk dollars and cents. Having passed along all of your “measurables” very early in the process you made it clear that you are serious about potentially moving your book to a new firm. So now what? How do you efficiently, professionally and most profitably handle the negotiation?
There are three distinct ways to handle the negotiation of your deal/contract. But before I lay those out let’s take a moment and make the most important thing clear. There is a red line. The red line exists to keep you from ruining the seriousness and professionalism with which you have handled the process up until this point. You see, money (and lots of it!) can make people do and say stupid things. DO NOT BE THAT GUY! Keep your composure. A negotiation is exactly that - a negotiation. The firms vying for your services are first and foremost interested in landing you and your team and they will stretch the limits of their patience and resources to do so - but be careful. If you cross the red line things can go south in a hurry.
With that out of the way let’s look at the three ways that deal negotiation can be handled. They are as follows : Hand to Hand Combat, Negotiation From Afar and finally Negotiation Via Mediation.
- Hand to Hand Combat. It looks like it sounds! This particular strategy puts you and your team mano y mano with the management of the firm that you may join. In a very real world way you will find yourself across a table, on the phone, via email and even text message negotiating your deal with the manager that you may choose to work with in a few short weeks or months. Clearly this particular strategy could lead to an issue or two. If negotiations do not go smoothly there is the possibility that a certain level of animosity could find its way into the process and possibly linger after you have joined the firm. On the other hand, if you keep yourself on the right side of the proverbial “red line” you could end up negotiating the best deal for you and your team and building a true partnership from day one with local management. The variable to be considered is your own personality when deciding if this is the best tactic for your particular negotiation. Can you handle being told “no”? Are you willing to compromise for the betterment of a long term relationship? Are you willing to walk away if things do not go your way? Consider these questions when choosing this strategy.
- Negotiation From Afar. This strategy keeps you far removed from the dollars and cents and ensures that you never approach the red line. By stating your needs and wants as it relates to a deal you can make it also clear that you are not interested in a contentious or drawn out negotiation. This puts yourself in a position to limit the back and forth - but also limits the extent that you may be able to stretch the parameters of any deal. The decision is whether or not you are interested in getting your hands dirty. If not, this strategy makes sense. (A solid addendum to this strategy is stating to management that you are aware of what your business is worth, what competitors are willing to offer and that you know what former colleagues have received in previous negotiations - and that you expect to get their best offer. This sets the table on your behalf.) You have to be willing to be passively involved in the negotiation and accept that you may not “squeeze every drop of blood out of the turnip”.
- Negotiation Via Mediation. This strategy employs a middle man of sorts. Whether it is a well respected recruiter, a former colleague or even a manager from a different office or geography than the one you are negotiating with - someone is doing a portion of the bidding for you. This allows for you to be as animated, involved and informed about the process as possible - yet removed enough that you don’t run the risk of ruining your reputation by going too far. You and your mediator will have a good idea of what you want and he/she can effectively communicate this throughout the negotiation. Most times the negotiator is compensated outside of your deal thus removing any conflict of interest on their part. Generally speaking this particular strategy is both the most effective and comfortable. If you don’t like the initial offer you have someone to yell at....it just so happens that it’s not your soon to be BOM or RD.
Each negotiating strategy has its merits. While certain personalities may enjoy the Hand to Hand Combat method and the scrapes and scars picked up along the way; most will prefer the other two strategies as it leaves more room between themselves and the red line. Keeping your professionalism intact, while cutting a great deal need not be mutually exclusive. Push and push hard, but understand that your reputation is just as important as the dollars and cents.
Andrew Parish is the CEO and founder of AdvisorHUB and managing director of Axiom Consulting. Follow him @APadvisorhub