What a Successful Negotiation Looks Like

You think legal negotiation is all about sending contract redlines to the other side and arguing about them on a call? Wrong. For a successful negotiation, preparing should take up much more of the in-house counsel’s time and effort as the external negotiation:

1. Getting context. Ask the internal business leaders what’s important to us in this deal? What are we trying to achieve? What is our next best alternative to the outcome we want? We negotiate for the business, not for ourselves.

2. Read-through. It can be tempting to dive in and start redlining or feed the contract through an AI review. But it is best to read through the agreement from start to finish. Each contract tells a story. Does this story tell the same story we got from the internal business team? A misaligned contract makes us angry or frustrated. If that’s the case, pause before proceeding to redlining.

3. Research. If the contract contains subject matter or terms you don’t know, research them. It’s okay not to know something. It’s not okay to guess.

4. Alignment across the company. Beyond the business terms, in-house counsel is the person who makes sure the agreement aligns with company posture on revenue recognition guidelines, service terms, InfoSec, regulatory requirements, IP ownership, risk management, etc. If you don’t know what that posture is, you find out before negotiating.

5. Pre-negotiation touchpoint with the opposing lawyer. Redlines aren’t always the best first step in a legal negotiation. If there are big gaps, it can be a good idea to have the business team facilitate initial contact with the counterparty’s lawyers to tackle the big issues and establish positive rapport before the hard work begins.

6. Redlines. Redlines are a form of communication. In-house counsel is not only editing the agreement, but also sending messages to the other side. Edits are not self-explanatory, and can sometimes appear aggressive if not explained properly. Comments in a businesslike tone can help. Never redline angry or on an empty stomach.

7. Review. Nobody writes a perfect finished work in one pass. Your redlines are a first draft, and require at least one round of revisions. Be careful to review redlines that were generated by AI. (AI can also help with revisions and checking against a playbook, but don’t let AI revise AI-generated redlines).

8. Circulating internally before sending. Make sure in-house counsel is on the same page with business colleagues before sending redlines to the counterparty, and draft a simple message telling them what you’ve done and get clearance to send out the redlines. Legal and business are one team and must align on the content and timing of what is sent back to an external client. Always. Nobody likes surprises, especially from their in-house counsel. The external negotiation can now begin.