The value of a hearty handshake in negotiations

My father was an "old school" businessman. He purchased odd lots of close-out or discontinued merchandise from local sources and resold them at a deep discount in a very successful chain of retail stores for over 30 years. With predictable over-stock and out-of-season goods, he and his business partner would negotiate for the cheapest prices directly with the vendors. They arrived in shirt sleeves, shook hands and greeted them warmly and then conducted face-to-face negotiations until a deal was done. At that point, he again extended his hand. He subscribed to the old axiom that "my word is my bond." Yet in modern day legal transactions, so much of the negotiation is done via Internet, written pleadings and formal settlement conferences, that we may have lost the fine art of a genuine handshake before negotiation begins.

I am seeing more and more disputes that engage in mediation before litigation gets going or even before a complaint is filed. As a consequence of this early attempt to negotiate a reasonable resolution, many such discussions now occur between virtual strangers. This is yet another excellent reason to begin every mediation with a "meet and greet" and a handshake between counsel and potential litigants before any negotiation begins.

Consider the example of a complex business dispute where one lawyer engages in a protracted email correspondence with another about whether a particular transaction that took place between their respective clients several years before constituted a fraudulent conveyance. The lawyers spend many months (and thousands of their client's dollars) drafting accusatory and exculpatory letters, exchanging "evidence," and trying to avoid litigation only to conclude that, in order to preserve the statute of limitations, the complaint must be filed.

Instead of setting up a face-to-face meeting, the complaint is served by a process server upon the designated agent for service of process. After many months of wrangling and communication, all efforts to work out a means for ferreting out whether such claims can be substantiated are completely shut down. By taking the step of filing and serving a complaint, the signal to the clients is that all possibilities for a "meeting of the minds" have been exhausted and the only means to work out these contentions is through the court. Full-blown litigation is, unfortunately, a stiff and cumbersome process if the objective is to get at truth and justice, particularly if there are issues of time and money that concern the clients (which are, after all, universal). An early negotiation may save both sides of this dispute a lot of money and aggravation.

Last week, I mediated a case in which the young employee, acting through her counsel, had filed a detailed claim with the Department of Fair Employment and Housing charging her former company with wrongful termination and pregnancy discrimination. That claim was the basis for a well-drafted pre-litigation demand letter, which lead the former employer's outside counsel to recommend an early mediation. Well before the statute of limitations had run, two lawyers met for the first time, but neither had met the other's clients and neither had taken any depositions or demanded or produced any documentary evidence that might establish or refute the claims.

Because there had been no litigation by the time of the mediation, there was no build up of antagonism or animosity between counsel, but there was a general distrust as to the intent of the parties to earnestly engage in meaningful settlement talks at this early juncture. What is more, there was a substantial gap in information between the two parties as no formal discovery had yet been undertaken.

For this reason, and with every participant's authorization, we began the day with a genuine handshake and a cheerful "nice to meet you" since all prior contact had been via email. The claimant expressed a preference of not being in the same room with the general counsel, who had made the decision to terminate her shortly after her return from pregnancy leave of absence. Still, she was open to meeting the outside counsel, who could not have understood what a credible and empathetic witness she would make on her own behalf without at least shaking hands with her and looking her in the eyes. Although I did not know it then, that early interaction may have set the tone for a positive experience and a quicker and more effective negotiation throughout the day even without a formal joint session.

Harvard Business Review has published an interesting study done by Francesca Gino, an associate professor of business administration at Harvard Business School, in which MBA students were invited to negotiate a mock real estate deal. Half of the pairs of negotiators were instructed to shake hands before negotiating and the other half were seated across the table from one another without the perfunctory handshake. The findings revealed that those "buyers" who shook hands with the "sellers" before commencing the negotiation tended to be less misleading than the control group, and both buyers and sellers reported ending up with a deal that appeared fair and more evenly distributed than the control group.

In another study, Gino assigned students to the role of "hiring" boss or "job candidate." Those that shook hands before beginning the negotiation as to salary, start date and office location were observed to be more open to the other's preferences and experienced improved joint outcomes.

The handshake is almost universally accepted code language for a willingness to cooperate, consider the other parties' interests, and maintain a sense of civility and polite interaction throughout the negotiation. It also has the added effect of making it harder to demonize the "other" when you have begun the day with a pleasant interaction. It is so easy to send off disparaging salvos via email, which can be impersonal, impolite and cutting. It is much harder to engage in that kind of exchange face to face.

There is little to lose by beginning every negotiation with a hearty handshake. While few business people conduct their business the way my father did, on handshakes alone, it would behoove all participants in mediated negotiations to begin the day with a very personal and slightly physical symbol or gesture to underscore and demonstrate that you are reliable, have shown up for purposes of genuine engagement, and are open to considering your negotiating partners point of view.

At best, you end up with a more effective agreement arrived at earlier in the day. And if you are very lucky, you may also convey a powerful first impression that you are a negotiating partner who can be trusted to arrive at the best possible outcome for you and your client that can be achieved.

Jan Frankel Schau is a neutral with ADR Services Inc. She can be reached at: jfschau@schaumediation.com.