China lawyer negotiation specialistTen years ago, when one of our China lawyers would write to a Chinese company to demand it do or pay something, we usually received one of two responses:

  1. No response at all. This was the Chinese company’s way of “saying” no to our demand.
  2. A long rambling response from the Chinese company both denying that it had done what we accused it of having done,  but then either somewhat admitting that it had actually done it or saying that it’s own subcontractor had done it. These responses usually included a discount going forward or some really small amount as compared to the actual damage.

Starting maybe three to four years ago, when one of our China lawyers when one of our China lawyers would write to a Chinese company to demand it do or pay something, we usually received a response to the effect that “we didn’t do anything wrong and we are never going to do what you are requesting, but let’s negotiate.

Starting maybe a year or so ago, when one of our China lawyers when one of our China lawyers would write to a Chinese company to demand it do or pay something, we usually receive a response to the effect that “we didn’t do anything wrong and we are never going to do what you are requesting, and if you don’t cease accusing us of having done something we will sue in a Chinese court you for that and, oh by the way, we also are going to sue you for this other ridiculous thing that you did (even though you never did and even though it would probably be legally irrelevant if you had. And yet, they still usually then offer to negotiate or propose a low settlement amount.

At my law firm, we call this latest sort of response “bluster” and it is intended by the Chinese to scare you away, and the fact that it has become so common makes me think that it often works. But how then should you respond if you do not wish to just turn tail and run?

There are two ways to respond, one way better than the other:

  1. Fight fire with fire and punch back with a slew of your own threats. This method is not terribly effective in the West and it is even less so the case in China. These “bluster” letters are designed to make you run away, but secondarily, they are designed to throw you off your game. Don’t let it. Never let the other side see you sweat.
  2. Play it cool and respond very briefly and without any acrimony by making clear your position and what it will take for you not to follow through on your threat.

Negotiation 101. Andrew Hupert, my negotiation specialist friend, can you please comment on the above and the psychology behind it? Or anyone else?

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Dan Harris

I am a founder of Harris Bricken, an international law firm with lawyers in Los Angeles, Portland, San Francisco, Seattle, China and Spain.

I mostly represent companies doing business in emerging market countries. It has taken me many years to build my network and it takes constant communication and travel to maintain it. My work has been as varied as securing the release of two improperly held helicopters in Papua New Guinea, setting up a legal framework to move slag from Canada to Poland’s interior, overseeing hundreds of litigation and arbitration matters in Korea, helping someone avoid terrorism charges in Japan, and seizing fish product in China to collect on a debt.

I was named as one of only three Washington State Amazing Lawyers in International Law, I am AV rated by Martindale-Hubbell Law Directory (its highest rating), I am rated 10.0 by AVVO.com (its highest rating), and I am a SuperLawyer.

I am a frequent writer and public speaker on doing business in Asia and I constantly travel between the United States and Asia. I most commonly speak on China law issues and I am the lead writer of the award winning China Law Blog (www.chinalawblog.com). Forbes Magazine, Fortune Magazine, the Wall Street Journal, Investors Business Daily, Business Week, The National Law Journal, The Washington Post, The ABA Journal, The Economist, Newsweek, NPR, The New York Times and Inside Counsel have all interviewed me regarding various aspects of my international law practice.

I am licensed in Washington, Illinois, and Alaska.

In tandem with the international law team at my firm, I focus on setting up/registering companies overseas (via WFOEs, Rep Offices or Joint Ventures), drafting international contracts (NDAs, OEM Agreements, licensing, distribution, etc.), protecting IP (trademarks, trade secrets, copyrights and patents), and overseeing M&A transactions.