Negotiation Skills
The analysis needed to understand how Dr. Kissinger went about negotiating his landmark transactions—most notably, the opening to China after decades of mutual hostility, achieving détente and the first nuclear arms control treaty with the Soviets at the height of the Cold War, bringing an end to America’s involvement in the Vietnam War at the Paris Peace Accords, and effectuating Egyptian and Syrian disengagement deals with Israel following their 1973 war—was done a few years ago by professors James Sebenius (Harvard Business School), Nicholas Burns (Harvard’s Kennedy School of Government) and Robert Mnookin (Harvard Law School), in their excellent book Kissinger the Negotiator: Lessons from Dealmaking at the Highest Level (HarperCollins, 2018). The authors’ protagonist was so impressed with their approach and final product that he wrote the book’s foreword.
Among the many “actionable insights” gleaned from their research of Kissinger’s historic horse trading, which are detailed and supported by many examples in the book, are the following:
Once these best practices have been processed and incorporated into one’s playbook, the operative question for the lawyer to ask himself whenever he engages in negotiations and reaches a tipping point is clear: “What would Henry do?”
Leadership Traits
For the lawyer leader who seeks to elevate himself and his enterprise to a higher level, shrewd guidance is available from Dr. Kissinger himself in his book Leadership: Six Studies in World Strategy (Penguin, 2022). His thoughts on leadership have special significance in the context of recognizing that these days, lawyers, not only lead law firms, many have leveraged their legal training to become leaders of businesses, universities, school boards, nonprofits and government institutions.
Once these best practices have been processed and incorporated into one’s playbook, the operative question for the lawyer to ask himself whenever he engages in negotiations and reaches a tipping point is clear: “What would Henry do?”
To draw his conclusions, Kissinger explored the most important traits, which drove the successes of six leaders whom he encountered during his diplomatic career: Konrad Adenauer (chancellor of Germany from 1949-1963), Charles de Gaulle (head of France from 1944-1946 and 1958-1969), Richard Nixon (president of the United States from January 1969-August 1974), Anwar Sadat (president of Egypt from 1970-1981), Lee Kuan Yew (prime minister of Singapore from 1959-1990) and Margaret Thatcher (prime minister of Great Britain from 1979-1990). He chose them because they each “transcended circumstances by their vision and dedication” and thereby “redefined national purposes, opened up new vistas, and contributed a new structure for a world in transition.”
Kissinger identified five “parallel qualities” in the six leaders which should be aspirational for all lawyer leaders:
Besides these five shared traits, each of Kissinger’s chosen leaders had other traits at which he or she was particularly adept, which are also worthy of emulation by any lawyer who sets his sights on leading himself, his law firm and/or the organization he now leads to new heights:
As Kissinger identified and then described in detail these qualities demonstrated by his chosen leaders, he made their strengths appear available to all who put themselves in positions where challenging circumstances are properly analyzed, risks are managed, means fit ends, prudent decisions get made, trust is earned and promises are kept.
By his words and deeds, Henry Kissinger was not only an esteemed scholar and statesman, but he was also a teacher. Though he passed away on November 29, 2023, his wisdom lives on and is available to lawyers and everyone else who studies the lessons of his life and the substance of his writings. As a lawyer develops over the course of his/her career into becoming more skilled at addressing ever-rising demands in wide varieties of fields, it’s nice to know there are readily available sources of information like these two Kissinger books that can improve the likelihood of success of not just those who read them, they can also bear fruit for the benefit of the reader’s clients, law firms and other enterprises fortunate enough to have a lawyer as their leader.
Talmage Boston is a partner in the Dallas office of Shackelford, Bowen, McKinley & Norton, LLP, where he specializes in commercial litigation. He has been recognized by Best Lawyers for TK since 2013. He’s also a historian whose fifth book, How the Best Did It: Leadership Lessons from Our Top Presidents, will be released on April 2, 2024. He had the privilege of interviewing Henry Kissinger for the World Affairs Council of Dallas/Fort Worth in 2013 and 2022. He was first recognized by Best Lawyers® for Commercial Litigation in 2013 and earned the distinguished \"Lawyer of the Year\" accolade for Litigation - Banking and Finance in Dallas/Fort Worth in 2018 and 2022. He was included in the 30th edition of The Best Lawyers in America® for Appellate Practice, Commercial Litigation and Litigation - Banking and Finance in the Dallas/Fort Worth area.
For those who do business in Texas or are considering doing so, mark your calendars. September 1, 2024, is the birthdate of a new judicial system in Texas—the Texas Business Courts. This dramatic change aims to resolve complex business disputes more efficiently than under the current civil court system. Texas is somewhat late to the party as the 30th state to create such courts. Although the law (House Bill 19) became effective September 1, 2023, the new Business Courts won't hear cases until after September 1, 2024. Big things require considerable preparation: there is a 12-month ramp-up time to confirm judges, put in rules and erect the necessary infrastructure.
Why is Texas doing this?
There are several reasons, but the general idea is to have a forum for businesses to resolve their business disputes more quickly, to have judges with a business background or prior judicial experience decide such cases, and to try to foster a business-friendly environment. Time will tell whether the Business Courts will achieve such goals.
How many Business Courts will there be, and when will they open?
For starters, five judicial divisions will cover the Austin, Dallas, Fort Worth, Houston and San Antonio areas. These first divisions are pilot projects. The goal is to have 11 Business Court divisions throughout Texas eventually. The creation of the other six divisions, which would serve rural Texas, is deferred to the 2025 Texas Legislature for approval and funding.
How are Business Court judges qualified?
Business Court judges must be at least 35; a U.S. citizen; a resident of the division for at least five years; and a licensed attorney with at least 10 years of experience in corporate transactional work, complex business litigation, previous experience as a civil court judge in Texas or a combination of the three. With the advice and consent of the Texas Senate, the governor will appoint Business Court judges to two-year renewable terms. Each of the five initial divisions will have two judges, and the remaining six rural divisions—if created and funded by the 2025 Legislature—will have one.
How will the Business Courts work?
A party can file a suit in the Business Courts or remove a case to the Business Courts from the court in which the case was originally filed. HB 19 also has a transfer provision that will allow a court in which a case was initially filed to request the transfer of the case to the Business Court if it is deemed to be within the Business Court's jurisdiction.
What about jury trials?
Business Court cases can be tried by a jury when required by the Texas Constitution. Although the Business Courts will be statewide, jury trials will be held in the county where the case could have originally been filed. But if a contract between the parties to a Business Court case contains a venue provision, a jury trial of that case will occur in the agreed venue. The parties to a Business Court case can also agree to have a trial in any county they choose.
Will the Business Courts Issue Written Opinions?
Yes. One of the reasons the business community supported HB 19 is the requirement for the Business Courts to issue written opinions. Proponents say this should lead to a more developed commercial law body and inform businesses how their future disputes may pan out.
How does a party appeal a judgment from the Business Courts?
A new appeals court (the 15th Court of Appeals in Austin) will have exclusive intermediate appellate jurisdiction over the Business Courts. This appeals court will have five justices, initially appointed by the governor but elected after that.
Companies should examine contracts and consider whether to have such disputes handled in the Business Courts.”
What disputes will the Business Courts hear?
The Business Courts will hear disputes over $5 million or $10 million that fit within specific categories in the statute. A few examples include disputes regarding an organization's governance or internal affairs, securities litigation, and breach of contract in which the parties agreed to venue in the Business Courts. Regardless of the amount of controversy, if a company is publicly traded, the Business Courts will have jurisdiction if the case pertains to certain types of disputes, such as securities litigation.
Can parties agree to sue or be sued in the Business Courts?
Yes. HB 19 will likely influence how parties address venue and jurisdiction in their contracts. HB 19 authorizes parties to agree to the jurisdiction of the Business Court through their contract (provided at least $10 million is in controversy). Due to the small number of Business Court divisions and the appointment of judges, sophisticated parties may prefer having their commercial disputes heard in the Business Courts. But the devil is in the details. If one of the Business Court districts that is not yet authorized is the appropriate district, a company may consider including one of the districts already operating in the forum selection clause.
What do opponents of the Business Courts say?
Opponents say that the Business Courts create two justice systems and that no empirical studies show the need for judicial reforms in Texas. Further, the 15th Court of Appeals will prevent Texans from appealing their cases directly to locally elected judges. Expect constitutional challenges to the Business Courts, including the argument that appointing judges violates the Texas Constitution, which requires district court judges to be elected. Opponents further argue that the limited jurisdiction of the Fifteenth Court of Appeals violates the Texas Constitution, which requires that the Court of Appeals must have appellate jurisdiction co-extensive with the limits of their respective districts. Another potential challenge is that the Business Courts may violate the right to a jury trial.
Won't the Texas Business Courts lead to more commercial litigation?
Possibly, and here's how. One of HB 19's purposes is to require written opinions to have a more well-developed body of case law on complex business disputes. Without cases being filed in the Business Courts, there can be no judgments or written opinions. The more cases filed, the more written opinions. It will, of course, take time for a body of case law from the Texas Business Courts and the 15th Court of Appeals to develop.
Finally, is there anything businesses should be doing to prepare?
Like it or not, the Business Courts will be here before you know it. Now is the time to prepare and plan. Companies should examine contracts and consider whether to have such disputes handled in the Business Courts.
By talking now to your legal department or outside counsel to determine how the Business Courts may impact your company, you may be one step ahead of your adversaries by better understanding how the Business Courts will work to resolve certain commercial disputes.
Alan Dabdoub is a partner with Lynn Pinker Hurst & Schwegmann, representing plaintiffs and defendants in business torts, contract disputes, trade secrets litigation, fiduciary duty litigation, partnership disputes, and bankruptcy litigation.
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Insurance is essential, ubiquitous and often a critical, if not dominant, consideration in every human financial activity. It affects even the most quotidian decisions business owners face: Do I need business interruption coverage? Are the coverage limits on the company auto policy sufficient? Is that contractor bonded and insured? If our CPA messes up the taxes, what's my recourse?
For a lawyer, insurance looms large over every action you perform, particularly if you represent business owners. The existence and details of insurance coverage—whether protecting them directly or available to them from third parties—are inextricably linked to the services you provide, and the claim process is an inseparable part of that coverage. It's within that claim process that friction exists between the publicly stated purpose of insurance coverage and the actual financial goals of the insurance companies.
A little background is in order.
While our firm's experience is centered primarily in Texas, the impact of insurance on commercial activities in every state is parallel, as is the unavoidable tension between insurance interests and those of other businesses. Also, unless you and your clients conduct business in just a few upper East Coast locales, most insurance companies you deal with will be from other states.
As an illustration of this phenomenon, consider that the National Association of Insurance Commissioners report, State Insurance Regulation in Texas: Key Facts and Market Trends, reflects that of 2,040 insurance carriers doing business in Texas in 2021, only 412 had a physical office in the state.
Does this make a difference? Does being a part of a local business community and doing business in the state of one's domicile impart some concern for that community's well-being? Perhaps, perhaps not. Certainly, however, nearly 80% of carriers writing policies in Texas – and likely a similar percentage in your state, would have no way of knowing. They are not local, and their concern for the local business community is confined to the premium dollars flowing away from it and in their direction.
Just how pervasive is the insurance enterprise?
It is an industry accounting for more than 7% of the world's economy, and it is no less a significant portion of the United States financial picture. In 2021, net insurance premiums were $1.4 trillion, 53% for property and casualty coverage. The US workforce includes 3 million people working in the insurance industry, with more than 1.6 million employed directly by insurance companies.
Now and historically, insurance has held enormous sway over political and legislative processes in the United States. For a detailed analysis of insurance interests' role in our country's transition from a set of British colonies to an independent nation, see Underwriters of the United States by Hannah Farber, University of North Carolina Press, Chapel Hill, NC, 2021.
During the latter part of the 18th century, the ground rules for conducting business in the developing nation were set out in the lex mercatoria, or \"law of merchants,\" an unenacted but \"revered body of rules, customs, and best practices\" cited as authority in governing marine and other insurance contracts of the 18th century. \"[R]elentless centralizer Alexander Hamilton … had the federal republic fixed in his sights but the 'laws of merchants' in his back pocket.\" (Ibid.,p.16,17)
As valid today as a quarter millennia ago is Ms. Faber's contention that \"[i]nsurers' abilities to intervene in political and legal affairs both at home and abroad were essential to their continued success.\" (Ibid.,p.23) The time-tested method for bringing one's desires to bear upon political and legal affairs? Lobbying. And insurance lobbying is massive.
According to OpenSecrets, a nonpartisan lobbyist watchdog group, the US insurance industry shelled out $153 million in 2021 to influence lawmakers. The following year, it upped its game to $160 million.
Lawyers and their business clients depend on the insurance industry to safeguard them from any expected perils of commercial activity, from lawsuits to hail damage and business interruption to employee dishonesty. Your clients invest in insurance to protect their livelihoods, and they have a right to expect returns from the insurance company in response to a notice of the loss.
Advertising jingles aside, insurance companies are in business to turn a profit, and to do so, many have developed strategies to reduce claim payments to avoid a drag on their bottom lines.”
The claim process—the method for accessing policy benefits—is central to conducting business successfully. If the insurance company fails to honor the obligations it assumed when it issued your client's policy, your client's business suffers over and above the damage triggering the claim in the first place.
And there's the rub. Advertising jingles aside, insurance companies are in business to turn a profit, and to do so, many have developed strategies to reduce claim payments to avoid a drag on their bottom lines. When carriers cut those checks to lobbyists or send contributions to legislative, congressional and—in states where judges are elected, like Texas—judicial campaigns, whose interests do you think they seek to protect?
Not only that, but these (mostly) out-of-state carriers circumvent the judicial consequences of laws designed to safeguard insureds by keeping cases out of the courtroom. For example, in the 2022 case of Overstreet v. Allstate, the Texas Supreme Court was primed to rectify a decades-old lower court ruling incorrectly construing Section 554.002 of the Texas Insurance Code, and level the playing field between claimants and insurers. In that case, the insurance company wielded the power of the purse to settle the claim out of court, depriving the Court of jurisdiction to issue an opinion.
Businesses across the nation are waking up to this friction. Google the phrase \"insurance recovery\" and see the number of large corporate law firms that incorporate this niche into their practice offerings.
As lawyers representing businesses other than insurance companies, we must be aware of the inherent conflict of interest between our clients and the carriers they rely on. Insurers have a long history of successful efforts reinforcing that reliance while failing to meet their obligations under the policies they issue. And the financial clout they bring to bear against other businesses' interests is vast. It will require a continual and collective effort to achieve something like balance in the scales of justice.
Marc Gravely is the founder of Gravely PC, a Texas-based firm devoted to insurance claim and construction defect disputes on behalf of businesses, homeowners associations and related organizations, and governmental entities.
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Business is inherently chaotic. Ali Ghasemi seems to be among the few who appreciate the beauty of simplicity. Leaders at Mastercard, where Ghasemi has worked for nearly six years, have referred to him as a “velvet hammer,” and the sobriquet is apt: He compels change amid the most sensitive circumstances, creating satisfying outcomes for all parties. His passion for process improvement stems from his experience from industries inundated by complexity including health care and energy and his knowledge base across three degrees in law, supply chain and finance.
Currently vice president of legal services for Mastercard, Ghasemi oversees the implementation of complex new technologies to enhance the company’s legal operations at all levels; he also co-manages its panel of law firms and has taken outside counsel management from merely effective to truly world-class. Before joining Mastercard’s legal division, he led global procurement of professional services for its sourcing team. He recently sat down with Best Lawyers for a wide-ranging discussion about the role of legal operations in internal customer management, the importance of efficiency and the promise of artificial intelligence.
Talk about the outside counsel change management that enabled value-based pricing. How is this helpful for law firms, especially bigger ones with global operations?
Traditional purely hourly based approach to outside counsel fees is not only outdated, but also unsustainable. With approval from our leadership, we set out new evaluation criteria and expectations for all major law firms we work with and embedded developed corresponding in our new internal policies. We then turned to the firms to align our interests so we could implement what we regarded as a mutually beneficial approach.
For example, when we sought greater volume-based rate discounts from the firms, we anticipated pushback—so we offered them a structure in which the deeper discounts would apply only if we sustained our spend with the firm over 12 months, thus making it a rolling discount rather than a fixed, arbitrary one. This gave the firms assurance that they would not be blindly signing up for rate cuts indefinitely.
Another example was when we asked the firms about their price per deliverable or phase of work, rather than hourly pricing. We asked them to provide a fixed price or a tight pricing range for work such as patent litigation, M&A due diligence and court motions. We then pushed back on pricing and asked for greater involvement from more senior personnel for the same price. In turn, we offered them incentives for winning strategies, meeting deadlines and granted motions. In other words, using the firm’s own confidence and expertise, we offered the minimum amount of funds possible to get the work done while promising a reasonable, fixed reward for an outcome they believed they would achieve.
How did these changes affect Mastercard’s relationships with outside counsel?
Realizing that our in-house counsel maintains a professional and even social relationship with many of our panel firms, we never intended to harm that by forcing uncomfortable conversations about pricing, capabilities, diversity or other significant topics. Instead, the legal operations team stood in as an objective, logical party to negotiate with outside counsel without the direct presence of in-house counsel and thus minimizing any risk of in-house counsel losing face in a potentially adversarial negotiation.
Layering our negotiations with objective metrics such as rates and fees, expertise, diversity and ESG criteria to identify the preferred firms for each market has allowed us to provide unbiased recommendations to our counsel on firm selection for direct negotiations and RFPs which we run very frequently and rapidly.
Over your career, you’ve restructured legal and sourcing departments at BJC HealthCare and Chevron. What did those experiences teach you?
I am fortunate enough to draw my work and educational background from several countries: Canada, the U.S., Australia, South Africa, Japan, England and Angola. One of realizations has been that customers across industries and geographies all expect rapid turnaround of their needs. Purchasing and sales teams want to showcase their skills and offer a competitive advantage; other internal teams, such as legal and compliance, want as little—and as efficient—involvement as possible in contracting. Processes and technology, if left unchecked, get more complicated and spiral out of control. People rarely simplify the process, however, preferring instead to focus additional resources on solving the next problem and often adding even more complexity. This is why it’s so critical to embrace simplicity and speed.
By partnering with subject matter experts across functions to identify their requirements, you can establish a baseline of common understanding. From there, you can streamline the process to bring in only the required SMEs beyond your initial level of approval as needed, as opposed to in every instance.
To that end, how has AI improved decision making in legal operations?
Legal departments by nature are highly risk averse, so they’re often not the department leading with the newest AI innovations. There are, however, several areas of AI and process automation that have long benefited legal departments, albeit under different disguises and names, which are now receiving a facelift in accuracy and efficiency. Among these are legal research and e-discovery tools, which can rapidly scan and analyze an enormous volume of electronic documents, laws, regulations and data to identify relevant information for legal cases, reducing the time and cost of traditional document or case review without sacrificing results. Also, AI-powered contract analysis tools can augment current contract management systems to extract, categorize and review contract terms, clauses and key provisions. What’s even more interesting about these tools is that they no longer require months of “training the tool” and can produce results without precision searches—often by using natural language inquiries such as “which case or statute supports our patent litigation for financial services clients with these set of facts, in Denmark”?
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