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Answers to self-test questions (20.3.3.1): Practice finding four positions
Use the band dispute negotiation to practise finding these four positions.
- Best negotiated outcome.
- BATNA.
- Worst acceptable outcome.
- WATNA.
Having done this, try to assess the strength of the client’s bargaining power. Remember that this is linked to whether they would win if the case went to court and what they would receive if they won but considered in the context of what the client has instructed you that they want to achieve. Sometimes it is the case that the client wants something that the court would be unwilling or unable to award—usually something that is unrelated to the legal issues in the case—in which case even a case which has a strong likelihood of success at court is not preferable for the client to a negotiated settlement.
Suggested Answers
The best alternative to a negotiated agreement (BATNA) refers to the best outcome that Jonny can expect if the negotiation fails. If there is no agreement reached, either everything will stay exactly as it is or one of the parties (probably Jo-Jo in this instance) will initiate court proceedings. For Jonny, the best alternative to a negotiated agreement is a good one: the band stay together and continue to perform and share the royalties equally.
The best negotiated outcome is not dissimilar to the BATNA in this scenario (although that is often not the case). For Jonny, a negotiation that allows the band to continue performing together and retains the four-way equal split of royalties would be a good outcome. However, as that is the position that exists at present, it is unlikely to be the outcome of the negotiation as Jonny will likely have to give way on something. For Jonny, any deal that allows the band to continue is a good one so he may have to consider an agreed outcome that varies the division of royalties.
The worst acceptable outcome is one which Jonny will agree but with great reluctance. Here, it is clear that his worst acceptable outcome is one in which he leaves the band and accepts that they can perform without him in return for financial compensation (a large lump sum and 10 per cent of future performance revenue). It seems that he will also accept some adjustment in the division of royalties. He would not give up rights to his song, Owl.
The worst alternative to a negotiated settlement would be a court case which Jo-Jo wins which would take Jonny out of the band but with no financial recompense and a vastly reduced share of the royalties. It is possible that a court would not allow him to have revenue from the band’s future performance income.
So although Jonny’s best alternative to a negotiated agreement gives him everything he wants, his worst alternative to a negotiated agreement leaves him with nothing. This makes a failure to reach an agreement a dangerous ‘all or nothing’ strategy for Jonny. This is often the case which is why it makes sense for parties to strive to reach an agreement even if it involves them having to give up something that they would have liked to keep. The trick is to try and get the client as much as possible of the things that matter to them whilst only giving away things that are less important. It is also important to remember the value of ‘making the pie bigger’ so that everybody gets more of the things that they want.