In our previous Making Legal Your Superpower posts, we explored how to choose the right contract and the power of starting negotiations from a balanced position. Today, we’re tackling a challenge that every business faces: the pitfalls that can delay or derail even the most promising negotiations.
As someone who has seen thousands of negotiations from multiple angles—as outside counsel, in-house attorney, and part of a founding team—I’ve witnessed how seemingly small missteps can bring momentum to a grinding halt. These pitfalls are especially challenging when you’re racing against quarter-end or other pressing deadlines.
The good news? Many of these pitfalls are entirely avoidable once you know what to look for. Let’s explore some of the most common traps and how to navigate around them.
The Logic Traps
Have you ever been in a negotiation where someone confidently declares, “This is market for our industry,” without any supporting evidence? This is just one example of how logical fallacies can creep into negotiations, often masquerading as sound business reasoning.
The Market Standard Myth
When I was working at a law firm, I frequently heard my counterpart insist that certain terms were “market standard.” But here’s the reality: unless you have access to a comprehensive database of similar agreements in your industry, claiming something is “market” is often just a generalization based on incomplete information.
Instead of relying on nebulous market claims, focus on what actually matters: your business needs and risk tolerance. Explain why specific terms are important to your business rather than appealing to an undefined market standard. And if you’re in B2B SaaS, some good news: Common Paper has a Benchmark Report of the most common contract terms.
The Company Policy Shield
“I’m sorry, but this is company policy” might be the most overused phrase in contract negotiations. While policies certainly exist and serve important purposes, using them as a shield in negotiations is usually an appeal to authority that adds little value to the discussion.
I learned this lesson while serving as in-house counsel and reviewing our own internal policies. We discovered that many “policies” were actually just preferences that had calcified over time. When you hear “company policy,” dig deeper. Ask about the underlying business need or risk that the policy addresses. Often, there are alternative ways to address the same concern.
The Experience Card
“In all my X years of practice, I’ve never seen this.” Sound familiar? This appeal to accomplishment is particularly interesting because it often contradicts itself—after all, every standard term was once new to the industry. When I hear this, I’m reminded of how open source software licenses were once considered radical but are now industry standard.
Style Matters
While logical fallacies can slow down negotiations, stylistic missteps can be equally problematic. These are the practical pitfalls that create unnecessary friction in the negotiation process.
The Invisible Edit
Early in my career, I once spent hours comparing two versions of a contract word-by-word because someone had turned off track changes and sent the document as a PDF. Not only was this a waste of time, but it eroded trust between the parties. Always use track changes or redlines and send an editable file type. It’s not just about transparency—it’s about respect for your counterparty’s time.
The Context Vacuum
Have you ever received a heavily marked-up document with no explanation? It’s like getting a jigsaw puzzle without the picture on the box. Context is crucial. When making substantial changes, provide a brief explanation of your key concerns and goals. Alternatively, offer to get on a quick call or Zoom to provide context. This simple step can prevent multiple rounds of back-and-forth and help both parties find creative solutions faster.
The Time Trap
Here’s a truth I’ve learned repeatedly: time kills all deals. The longer a negotiation drags on, the more likely it is to fail. Each round of redlines increases the risk that key stakeholders will lose interest, priorities will shift, or business conditions will change.
The solution? Set clear timelines and stick to them. When I was scaling Uber Eats, we found that setting clear deadlines for everyone actually improved our close rate. It forced both parties to focus on what truly mattered rather than getting lost in theoretical edge cases.
Moving Forward
The most successful negotiations I’ve been part of shared a common thread: both parties focused on understanding each other’s actual needs rather than getting caught up in rhetoric or style points. By avoiding these common pitfalls, you can keep your negotiations on track and build stronger business relationships in the process.
Remember, the goal isn’t to win every point—it’s to close deals that work for both parties. The next time you’re in a negotiation, watch out for these pitfalls. You might be surprised at how much smoother the process becomes when you do.
Stay tuned for our next installment in the Making Legal Your Superpower series, where we’ll explore strategies for building effective partnerships with your legal team.