Failed Legal Strategy in Staples-Office Depot Deal? How To Successfully Negotiate Your Way Through JV Agreements & Mergers

The proposed merger of Staples and Office Depot was a bold move. The #1 and #2 office supply big box chains confessed from the start that the consolidation would suppress market competition. In fact, the F.T.C. already blocked this merger in 1997. Nevertheless, it took a new decision passed down by a federal judge’s order last month to end what was sure to be a violation of consumer-, if not also anti-trust.

So why did these two business behemoths think they could get away with it this time?

First, the two box chain clients claimed that while a merger would, in fact, reduce competition in some ways, it would also expand competition via growing the overall market. Through this merger, Staples asserted that it could invest more completely in online businesses, going head-to-head with companies like Amazon, for example.

Second, the Staples-Office Depot legal team relied heavily on its hired gun (her firm calls her a “hired bazooka”) Diane Sullivan to make their case. The New York Times pointed out that more puzzling than the court’s decision was Sullivan’s, who rested her defense without presenting any evidence or calling any witnesses.

So, in the end, the merger—which would have created a company 15 times larger than its nearest competitor—was put to a stop. But not before Judge Emmet G. Sullivan of the Federal District Court for the District of Columbia released a written opinion emphasizing the importance of competition and antitrust in a world of big money and big mergers.

If there’s a lesson for lawyers, it’s that presenting evidence to defend your case (and this would seem obvious) is necessary for such high-stakes claims. Joint ventures offer companies the opportunity to quickly gain access to new markets or technologies. But recent legal opinion pushes a pro-enforcement stance on “market definition,” where experts via art or science describe the competitive effects of an action, like mergers and JVs.

Before your firm even reaches the courtroom, failure to carefully negotiate and structure a JV can create problems and legal liabilities for all parties down the road.

Do you know how to effectively negotiate, draft and structure joint ventures that best protect your client from the changes that occur over the life of the relationship?

If you can’t answer that question, consider taking C4CM’s audio course, “Joint Venture Agreements: Advanced Structuring, Drafting and Negotiating Strategies,” on Wednesday, June 29, 2016 from 2:00 PM To 3:15 PM Eastern.

During this information-packed CLE webinar, David L. Forney, Partner with K&L Gates LLP, and J Andrew Watson III, Shareholder at Maynard, Cooper, Gale–will explain key legal issues you should consider at the formation of a JV, and how to:

• minimize risk for the parties
• determine the proper legal structure
• establish governance and control protocol
• create exit strategies
• address key issues surrounding disputes, resolution, and damages

Additional topics will include:

• experience with specific joint ventures
• competition issues
• understanding the importance of the business plan
• developing representations, warranties, and covenants
• understanding the importance of ancillary documents

Staples ditched their last tag line “That was easy,” in favor of, “Make more happen”: advice that the Staples-Office Depot legal team needed to apply to their merger strategy.

 

-WB

Negotiation Tactics: #1 Don’t Get Caught By Surprise

From salary negotiations to severance to sick days, don’t get caught by surprise when negotiating benefits. When law firm manager or law firm employee, there’s much to be gained by constant preparation. Here’s how you do it.

For employees:

1. Know your true value

First, it’s important to know your true value. That means the market value for your current position in your current industry. Whether it’s via websites like glassdoor.com or information from your recruiter, find out whether your current salary is above or below your true value.

2. Know your relative value

Next, take into account your previous experience or unique skills. Are you bilingual? Do you have a second degree outside a JD, say a MBA or CPA? Did you previously work at the USPTO so that your patent experience exceeds that of much more tenured lawyers?

Make a list of these skills and experiences. This is your value added to the job in general.

Then, make another list of on-the-job training or tasks successfully accomplished at your current firm. This is your value added to the specific position you currently hold. These accomplishments are tangible benefits you’ve provided your employer.

“It’s all about demonstrating that you are the best person to help the employer address any challenges that may exist,” Roy Cohen, veteran career coach and author of The Wall Street Professional’s Survival Guide, said to Forbes, “that you are going to change the course of history at the organization.”

3. Keep a hardcopy of this list accessible

In today’s day and age, you never know when you might be laid off. Or, when your boss wants you to move from say, the New York office, to the Sacramento one.

If you keep this list up-to-date and accessible, then next time a manager calls you into his office, you’re prepared for anything—negotiating a new, higher salary or, in the worst case, a better severance package.

If you don’t have this list ready, or you need more time to prepare for negotiating, keep some delay-tactic phrases handy, like “I need some time to see if there’s an opportunity to advance in that office [or division].” Or, “My kids go to private school, so I’ll have to review the options and prices for similar schools in said-location.”

Don’t get caught by surprise. Stay calm. And, be well-informed when you negotiate.

For employers:

1. Know who is undervalued or overvalued at the firm

Just like your employees, managers should keep track of the range of salaries offered at the firm. It will help at the end of the year for raises and bonuses, but it will also keep you from being surprised by requests for salary increases.

Keep a ranking of your same-level associates. This ranking can remain unofficial, but it will help you answer key questions, such as: Do I play favorites? How can I assemble a balanced team of professionals for this case? Who deserves the biggest bonus? Who can this firm not afford to lose?

2. Reward ability, not ego

If a potential employee comes into your office with hardball demands and an over-inflated sense of self, this may not be the best employee or team member.

At the same, realize that employees with confidence in their abilities or value-add will be prepared to negotiate. Be clear and upfront with them about what you are personally allowed, or not allowed, to offer at this time.

Don’t lie to employees about compensation or advancement. In the end, employees will quickly figure out that bonuses are not as large as you let on, or advancement opportunities are not as they seemed. Not to mention, lying or exaggerating often transforms into a legal headache for firms.

3. Be brief

Whether you are caught by surprise by an employee or well prepared for difficult compensation discussions be brief. Negotiation, from the employer’s side, is best accomplished when the employee has to wait—anxiously anticipate—the outcome.

For your turn, in this economy, there are likely plenty of fish in the pond. The best match for any position after both sides negotiate is a win-win, where the person who gets what he or she wants in terms of compensation and benefits, and—in return—adds fair and longstanding value to your clients and firm.

Learn more in The Center For Competitive Management (C4CM)’s course: Mastering Difficult Conversations: Tips and Tools from an FBI Hostage Negotiation Trainer.

The course explores:

• Best practices for handling tough conversations about behavior and performance
• What techniques work best when dealing with emotional employees – and how to keep yours in check
• Methods for dealing with sticky issues like discrimination, gossip or pay
• Which laws and regulations you must comply with in order to reduce legal risk
• How to decrease your fear of confrontations How to tame a tense conversation before it gets out of hand
• Ways to respond to employee pushback
• And more!

-WB

How To Successfully Negotiate Anything (When You Play To Your Strengths)

Many associates start out by gaining experience in litigation. Nothing like the fast-paced, unpredictable arm of the law to guide naïve first-years.

However, after a few years of sleeping in the office and canceling vacations, many young associates start to dream of the sunnier skies of transactional work or, better yet, getting in-house.

Of course, it’s necessary to have some experience in the practice areas of securities, patents, and compliance, but—otherwise—the basic needs of transactional firms are the same as those in trial law.

“I have said it before, and will continue to advise, that litigators negotiate their way through the day, every day, and are therefore quite possibly better suited to negotiate deals than a transactional lawyer will ever be. Not to say that there are not some transactional folks who could sell you a pile of dung and make you think you got the better of the bargain, but my experience is what it is,” writes David Mowry for Above the Law.

In his post “Play To Your Strengths,” Mowry answers the basic question: How do you convince transactional firms that your litigation experience is applicable?

“The argument is not difficult; you negotiate for a living, you shred contracts in order to zealously represent your institutional clients, and you are damned good at what you do.”

However, the title of his post has larger, loftier applications to lawyers and law firm managers.

Whether you are an associate or law firm partner, to successfully conclude a negotiation, it’s important to play to your strengths in and out of the courtroom. Whether debating a raise or a courtroom settlement, law firm professionals must understand the strengths of their character and of their case.

In Negotiation 101, if you catch a person off guard, they are in no position to negotiate. So, when your boss stops by your office to hear about the progress of a case or to discuss your career, you best be prepared.

So, for cases, keep an accessible list of tasks you’ve completed, but also put these tasks in order of importance. That way, when your boss asks for a status update you can quickly lead with your biggest achievement—the biggest strength of the case—first. In all likelihood, you won’t need to go further into the minutia.

In court, if you keep a short list of your case’s strengths, it will help you gear the conversation back on track—“on track” meaning back to the best points of your case.

Next, for your career, keep a list of professional achievements. Again, put them in order of importance (unless, of course, your last major achievement was long ago!). Furthermore, create a list of your value-add to the firm, i.e., your strengths. Every time you are assigned to a new case, browse your list of personal strengths. This will help you figure out the best way to make an immediate and worthy contribution.

“The first task in the exercise is to collect feedback from a variety of people inside and outside work. By gathering input from a variety of sources—family members, past and present colleagues, friends, teachers, and so on—you can develop a much broader and richer understanding of yourself than you can from a standard performance evaluation,” adds the authors of “How to Play to Your Strengths,” for the January 2005 HBR Magazine.

Forget your flaws. Don’t be modest.

“It is a paradox of human psychology that while people remember criticism, they respond to praise. The former makes them defensive and therefore unlikely to change, while the latter produces confidence and the desire to perform better.”

People underestimate the power of a list and the power of confidence. A list of “strengths” may seem juvenile or even boastful. But, when you’re caught off guard, or even when you’re not, a list is the best way to negotiate your way to the top.

Statistically women underestimate their value in the workplace. Everything is communication. Are you communicating in the most positive, effective, and engaging way possible to build your career?

Learn to overcome this gender obstacle with “The Smart Woman’s Guide to Powerful and Effective Communication,” from the Center For Competitive Management’s extensive law firm management resources and training materials.

-WB

How To Successfully Negotiate Anything (When You Play To Your Strengths)

Many associates start out by gaining experience in litigation. Nothing like the fast-paced, unpredictable arm of the law to guide naïve first-years.

However, after a few years of sleeping in the office and canceling vacations, many young associates start to dream of the sunnier skies of transactional work or, better yet, getting in-house.

Of course, it’s necessary to have some experience in the practice areas of securities, patents, and compliance, but—otherwise—the basic needs of transactional firms are the same as those in trial law.

“I have said it before, and will continue to advise, that litigators negotiate their way through the day, every day, and are therefore quite possibly better suited to negotiate deals than a transactional lawyer will ever be. Not to say that there are not some transactional folks who could sell you a pile of dung and make you think you got the better of the bargain, but my experience is what it is,” writes David Mowry for Above the Law.

 

In his post “Play To Your Strengths,” Mowry answers the basic question: How do you convince transactional firms that your litigation experience is applicable?

“The argument is not difficult; you negotiate for a living, you shred contracts in order to zealously represent your institutional clients, and you are damned good at what you do.”

However, the title of his post has larger, loftier applications to lawyers and law firm managers.

Whether you are an associate or law firm partner, to successfully conclude a negotiation, it’s important to play to your strengths in and out of the courtroom. Whether debating a raise or a courtroom settlement, law firm professionals must understand the strengths of their character and of their case.

In Negotiation 101, if you catch a person off guard, they are in no position to negotiate. So, when your boss stops by your office to hear about the progress of a case or to discuss your career, you best be prepared.

So, for cases, keep an accessible list of tasks you’ve completed, but also put these tasks in order of importance. That way, when your boss asks for a status update you can quickly lead with your biggest achievement—the biggest strength of the case—first. In all likelihood, you won’t need to go further into the minutia.

In court, if you keep a short list of your case’s strengths, it will help you gear the conversation back on track—“on track” meaning back to the best points of your case.

Next, for your career, keep a list of professional achievements. Again, put them in order of importance (unless, of course, your last major achievement was long ago!). Furthermore, create a list of your value-add to the firm, i.e., your strengths. Every time you are assigned to a new case, browse your list of personal strengths. This will help you figure out the best way to make an immediate and worthy contribution.

“The first task in the exercise is to collect feedback from a variety of people inside and outside work. By gathering input from a variety of sources—family members, past and present colleagues, friends, teachers, and so on—you can develop a much broader and richer understanding of yourself than you can from a standard performance evaluation,” adds the authors of “How to Play to Your Strengths,” for the January 2005 HBR Magazine.

Forget your flaws. Don’t be modest.

“It is a paradox of human psychology that while people remember criticism, they respond to praise. The former makes them defensive and therefore unlikely to change, while the latter produces confidence and the desire to perform better.”

People underestimate the power of a list and the power of confidence. A list of “strengths” may seem juvenile or even boastful. But, when you’re caught off guard, or even when you’re not, a list is the best way to negotiate your way to the top.

Statistically women underestimate their value in the workplace. Everything is communication. Are you communicating in the most positive, effective, and engaging way possible to build your career?

Learn to overcome this gender obstacle with “The Smart Woman’s Guide to Powerful and Effective Communication,” from the Center For Competitive Management’s extensive law firm management resources and training materials.

-WB

How To React To An Employee Who Negotiates His Salary

When it comes to negotiating salary, we’ve already discussed a few tips for success.

But, what happens when you’re the law firm manager who is negotiating with your own associates?

How do you appropriately react to associates who are seeking alternative employment?

In the throws of negotiation, it’s important to appear objective, firm, and fair—even if these emotions do not reflect reality. Negotiation is not a battle. Succesful leaders support each member of their team, sincerely wishing them well, regardless of the circumstances surrounding their career or pending departure.

Pocket Your Emotions

Whether during performance reviews or mid-year bonus talks, if your associates reveal the fact that they are considering a career change, stay calm and supportive.

It may be that replacing this employee will not only be difficult, it would be impossible! Or, perhaps your firm put in many training hours and dollars into this particular person. Your initial reaction may be fear, defense, or even anger.

Try to remember, though, that employees are prone to keeping their options open.

And, the best way for a valued employee to negotiate a higher salary is to get offers from outside firms. Allow your associates to maintain this competitive edge—after all, isn’t resourcefulness a part of what makes exceptional law firm professionals?

Ask Them What They Want

So, now that you know an employee is considering his or her options, why do you think that is?

Ask your employee to explain their decisionmaking process. Are they looking for a bump in compensation? Is it the commute, or time demands? Are they stimulated enough in the workplace?

Whatever the reason, it’s not only important for retaining this valued employee, but it will also likely give you insight to the desires of other employees at your firm.

If one person is unhappy with your family benefits package, he or she is probably not alone in this sentiment. Or, if one person feels overworked and underappreciated, it may be time to shedule a team-building retreat or mandatory vacation days for all.

The best opportunity for honest feedback that will open doors at your firm is while one person is shutting them.

If no amount of money or promotion will convince this specific individual to stay, you can at least avoid a mass exodus by improving workplace policy and routine for those associates who remain based on frank review and conversation with your departing soldier.

Ask Yourself What You Want

Finally, ask yourself, what is best for you and your firm?

If this employee is irreplaceable, consider ceding to his demands. Only accept terms that will leave both parties grateful, as opposed to resentful.

However, ask yourself if agreeing to an employee’s negotiated demands won’t just patch a bigger problem. Retaining an associate who holds that much negotiating power may mean your firm hasn’t diversified its staff adequately.

It’s unlikely that just one person is right for any job.

And, with the law industry super-saturated with job seekers, you should calculate the true costs of losing an experienced associate and replacing them with a cheaper, more trainable one.

At the same time, employees expect to advance in the workplace. The excuse of a “recession-based budget” will only fly so long at your firm. Eventually, you’ll have to replace either the excuses or your departing associates.

Whatever decisions your employee and your firm makes in the end, understand that the process isn’t personal. In business, unlike battle, negotiating to a win-win compromise is always best—and lasting—for both sides.

-WB

Negotiating The Salary You Want… At The Firm You Want

So, you’re investigating your options.

Whether it’s for higher job security, salary, or benefits, investigating a career change is quite common for law firm professionals.

Some employees are looking for a change in geographical location. Others just want a raise in compensation.

Whatever the reason, conducting research on a new job opportunity can actually increase the negotiating power you wield in your current one.

Here are a few ways to successfully navigate the negotiation process—at your present firm or the one you hope to join in the future.

Research your options.

“The advice I got when I was graduating from college was try to have the offer from your second best choice in your pocket when you negotiate with your first,” advises Danny Ertel, a founding partner at Vantage Partners, LLC, a negotiation consulting firm in Boston, and co-author of The Point of the Deal: How to Negotiate When Yes is Not Enough (via HBR).

If you have offers from other firms, don’t be shy about sharing those numbers. Firms will fight for the candidate who is right for the job, and negotiate more competitively when there are other offers on the table.

If you don’t have alternative employment options, however, then you should at least know the market rate for your position. Read comments on Glassdoor.com, salary.com, or payscale.com for salary information and estimations.

If you have friends or university peers working in the same industry, ask them for their opinion. If you are close enough, ask for their exact salary.

If you come to a negotiation prepared with realistic salary numbers, you’ll feel more confident when you counter for your own.

Play to your strengths when the offer is too low.

Employers are prepared to negotiate. And, it’s likely their first offer will be low.

When this happens, stay positive and firm. Don’t go on the defensive. Rather, use language including, “Thank you. I’ll have to take a day or two to think about that offer.”

Or, “I’m not sure that number takes into account the superior language/ computer/ technical experience/ skills I can bring to this position.”

Most experts agree you shouldn’t immediately accept the first offer. However, you shouldn’t curtly dismiss it, either.

“You don’t want to negotiate so hard that people are sick of you before your first day,” says Katherine McGinn, professor of business administration at Harvard Business School and co-author of “When Does Gender Matter in Negotiation?” (via HBR).

Take some time and think about what you want most from this employer. More money? Better benefits? Paid moving costs?

Play to your strengths when negotiating. For example, if you’re uncomfortable negotiating in person or on the phone, write an e-mail instead.

If think you are going to be railroaded verbally, write a succinct e-mail response to the initial offer. This way, you can put into writing exactly what you want from the firm, while maintaining a professional and positive tone.

At the end of this e-mail, be sure to explain why you have returned via text versus voice.

Include a line, such as “I thought I’d reach out over e-mail first so that you would have time to reflect on this counter-offer.” Or, “I wanted to put this in writing so that we are on the same page during our next conversation.”

Although money is usually the bottom line, McGinn suggests asking yourself, “How can I build the biggest job I’m interested in having?” before negotiating with your potential employer.

Think about those non-monetary elements, in addition to salary, that will transform a career into a calling.

In the end, both sides should be reasonable and honest during a negotiation. The worst outcome for employees would be to over-promise and then under-deliver. For employers, work performance and retention inevitably suffer when associates are underpaid and unhappy.

-WB

Salary Negotiations: Dos and Don’ts

Whether post-offer letter as a new associate or during performance reviews at the end of the year, lawyers must, at one point, negotiate their salary.

Not all lawyers, however, are meant for the throws of a fast-paced litigation environment. Outside the courtroom, many of us mishandle the process of negotiation.

Discussions about money are difficult. In a professional environment, the company knows best its limits and budgets. At the same time, the employee knows best how much their time is worth.

Whatever the circumstance, law firm managers and employees should arrive to meetings about salary and benefits adequately prepared, using the following tips.

Do Your Due Diligence

Whether through Glassdoor or other salary websites, employees should know the market rate for their position. Whether paralegal or first-year associate, legal services salaries are one the best advertised online.

Take into account the tier of your law firm and your individual pedigree to come up with two numbers. Your ideal salary, and then your minimum.

Law firm hiring managers should also be well versed on the market rate of employees in their industry. And, in negotiations, should the firm extend a number below this average, be prepared to justify the offer. Perhaps your firm provides superior intrinsic benefits or healthcare. Or, your law firm is small, giving associates greater trial experience and sooner than its BigLaw counterparts.

Whatever the trade-off, be sure your new hires feel happy in their choice and your firm hasn’t broken the bank.

Don’t Go Below Your Bottom Line

For employees, set your minimum salary requirement in advance. Then, in negotiations, don’t go below this number. Sometimes if a firm offers a wage very close to that limit, you’ll be tempted. Nevertheless, hold fast.

A firm who really appreciates your skills will honor the difference. In addition, discontent over salary will only make you begrudge the firm and your work at a later date when hours are long and hard.

Firms should also come up with a bottom line. No single employee is worth breaking the whole budget—no matter his or her Ivy League education, exceptional background, or interesting profile. Law is a team effort, and paying that much-desired partner or associate too much will reap too little.

Do Sell Yourself

Salary negotiations are an active process. Especially in the case of performance reviews, sell yourself to the firm. Don’t assume that they know every little contribution you’ve made for the past 12 months.

In fact, prior to a performance review, make a list or outline your accomplishments at the firm in writing and practice dictating them. Prepare a 5-minute speech that explains why you deserve your ideal salary raise.

For new hires, prepare an elevator pitch explaining why your skills deserve a higher salary than those of your peers. Why do you stand out? Why are your skills worth more?

Even if a firm manager is the first to talk and immediately explains there will be no salary increases, speak up anyway. It’s a great time for superiors to be aware of your value to the firm. And, if they are impressed, you may be first in line to receive a raise next year, as the funds become available.

Don’t Settle

Negotiations can be tough on the nerves. Employees must understand that this is business, not personal. Firms, for their turn, should also realize that employees are only pursuing their just reward after many years of hard work and education.

In the end, even if you experience a negative outcome (blame the double-dip recession) don’t let a salary dictate your self-worth or your positive attitude.

-WB