January 9, 2009
  Negotiating With a Client's Representative Requires Different Tactics

by Michael Strogoff, AIA
Strogoff Consulting

Summary: Effective negotiating requires that parties understand each other's goals, aspirations, and underlying concerns. Some of these can be ascertained indirectly: Clients can gain a preliminary understanding of what's important to design professionals through reading their statements of qualifications and other marketing collateral. Design professionals can gain insight into a client's perspective through reading their request for qualifications, talking to design professionals who previously worked with the client, or through third parties who know the client. No matter how much prior research is done, however, it is only when parties meet in person to negotiate that they can understand fully what drives each other. To design professionals, this means negotiating with a client's key decision-maker.

How, then, can an architect negotiate effectively when a client assigns a representative such as a project manager, construction manager, or lawyer to negotiate on its behalf? This is a common occurrence among multi-headed clients such as governmental agencies, public entities, and large corporations. Representatives are also often assigned when a client's decision maker is too busy or has other reasons for delegating.

When an architect realizes that a client assigned a representative to negotiate on its behalf, the first thing to do is encourage the key decision maker(s) also to participate in the negotiations. Contact the decision maker(s) directly and explain why your team needs to listen firsthand to his or her goals, aspirations, and underlying concerns. Describe how your work plan and fees can be more responsive to their needs if they express them directly to you.

If, however, you must negotiate solely with a client's representative, keep the following in mind.

Representatives have differing levels of authority. Some are authorized to negotiate most of the terms. Others have limited authority and are not able to make exceptions to a client's boilerplate or guidelines without the key decision makers' approvals.

Representatives may inadvertently misrepresent the actual decision makers. Even worse, representatives sometimes deliberately filter the information or sever the direct lines of communications between the client whom it is representing and its selected design professionals.

Representatives may have different objectives than the client whom they are representing. Many representatives are first and foremost interested in their own job safety and therefore make conservative decisions. Many feel the need to look good to their clients and are overly aggressive in their role as client's advocate. Construction managers, for example, might push hard for low A/E fees thinking that will reflect positively on them. Some representatives use their position as the client's representatives during a negotiation to establish their own authority and protect their project position, influence, and scope of services.

To address these and also look out for your own interests, consider the following strategies when negotiating with clients' representatives.

  • Ask the representative to describe the client's goals, objectives, and concerns as well as his or her own. Even though the representative might apply his or her own filter, you will gain at least some understanding of what is most important to the client.
  • Ask representatives about the extent of their authority. Establish ground rules about when the ultimate decision maker and/or other stakeholders might need to be consulted to reach agreement. If the representative does not have the authority to modify indemnity language, for example, agree that discussions about those provisions will be deferred until the final meeting in which the decision maker will be present.
  • Keep the client's decision maker informed about the progress of your negotiations. Following each meeting, send the representative and the decision maker a summary of what was discussed, your understanding of the client's perspective about each item, the outstanding issues, and the next steps. Make sure you send the decision maker his or her copy directly. Sending summaries to the decision makers provides them an opportunity to clarify anything that does not accurately represent their perspective. Also, the representative is less likely to push a position if he or she knows that you are keeping the decision maker apprised of the content of your discussions.
  • Make the client representative look good. In your progress summaries, show how your team will respond to the client's goals. If an early occupancy date is crucial, for example, list the milestone dates your team has committed to in order to meet the client's timeline. Also, describe any concessions you made. This will make the it appear to the stakeholders that the representative is protecting their interests. Package the information so that the client thinks its representative did as good of a job negotiating as possible.
  • Give the representative talking points to justify recommendations. The client's representative must be comfortable defending your fees before he or she is willing to agree to them. Include in your fee proposal a list of justifications.

Finally, keep in mind that you have more latitude than you might think when negotiating with a client's representative. Representatives have an incentive to reach agreement; otherwise they risk not looking good to the client. If a negotiation fails, the representative might be blamed for having done a poor job negotiating or for selecting an architect who was not suitable.
© 2008 Strogoff Consulting. Reprinted with permission.

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Michael Strogoff, AIA, heads Strogoff Consulting, a Mill Valley, Calif.-based firm that specializes in practice management, ownership transition, mergers and acquisitions, and negotiation services to design professionals. Strogoff also is serving as the 2009 chair of the Practice Management Knowledge Community Advisory Group.

The statements expressed in this article reflect the author’s own views and do not necessarily reflect the views or positions of the American Institute of Architects. Publication of this article should not be deemed or construed to constitute AIA approval, sponsorship, or endorsement of any method, product, service, enterprise, or organization.

For more information, visit Strogoff Consulting’s Web site or send him an e-mail.

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