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Big league negotiations Featured

9:56am EDT July 22, 2002

Most little boys grow up wanting to be baseball players. Larry Silverman played second base on his all-star Little League team. He kept score on every Pirates game, memorized the statistics and attended as many games as he could.

Today, Silverman’s passion for the Pirates remains. But he’s not just an avid fan anymore. He is the team’s chief player contract negotiator.

For the past five years, Silverman, an attorney with Pittsburgh law firm Dickie, McCamey & Chilcote, P.C., has spent much of his time with one of his biggest clients, the Pittsburgh Pirates, handling all team and player negotiations. Testing his skills in business transactions is one thing, but honing the skill in the face of aggressive, high-paid sports celebrities challenges the abilities of even the strongest dealmakers. Silverman takes that in stride.

He says he began developing his negotiating skills two years out of law school when he began working for a federal judge, Judge Donald Ziegler, now the chief judge of the United States District Court of the Western District in Pennsylvania. Silverman says he was fascinated early in his career by commercial transactions, contract disputes and issues that involved companies and financial questions.

His lifelong passion for baseball readied him for an opportunity that would take his interest in litigation and his newly developed skills in negotiating to a higher level. Silverman is still recording numbers for the home team, but today they reflect the hefty dollars negotiated for players’ salaries.

In this month’s One On One interview, we talk to Silverman about what it takes to negotiate a successful deal, whether for a player’s contract or a merger. Here’s what he says.

Your baseball passion, now turned profession, began with one of the toughest interviews you would ever have to pass. How did your involvement with the Pirates begin and what do you feel it takes to become a good negotiator?

In 1993, Mark Sauer, the Pirates’ chief operating officer, made the decision that the Pirates should have outside counsel to assist them in their salary arbitration disputes with players in the baseball system. Players who had been in the league for three years, at that time, were allowed to have salary disagreements submitted to an arbitrator. The arbitrator, in turn, would determine what the salary should be. Dickie, McCamey & Chilcote had been doing legal work for PPG Industries, one of the board members in the old group that ran the Pirates before Kevin McClatchey bought the club.

Because of the firm’s involvement with PPG, they were given an opportunity to bid on the work. The chairman picked five or six of us to interview whom he felt would be best suited, based on background and experience. We all interviewed with the Pirates and several of us were chosen to be interviewed by club president Mark Sauer and general manager Ted Simmons.

I remember the arduous interview process and how much time they spent with each candidate. It was friendly competition within the firm because everyone in the running was a baseball fan and very excited about the prospect of representing the club. For whatever reason, they chose me. So for the last five years, I have been doing this work and the role has expanded significantly since the beginning.

What exactly do you do for the Pirates?

At the outset, I was hired solely if a player’s salary negotiation went to arbitration. It’s a situation where the club submits a dollar figure, the player submits a figure and the arbitrator chooses whatever number he thinks is closer to the player’s true value. Gradually over the years, my role has expanded to where I now negotiate just about every contract that the Pirates enter into, including salary arbitration-eligible players, free agent contracts and long-term contracts for key players. We try to settle all of these cases before arbitration and the last couple of years we have been successful in avoiding arbitration by negotiating settlements and contracts.

When were you recognized as a negotiating expert?

That’s a pretty embarrassing question. I don’t think I’m recognized as a negotiating expert. I think my clients over the years have come to appreciate the effort that I put into settling cases. Court trials are exciting, and they get lots of headlines, but it is very expensive and very traumatic emotionally for clients. Sometimes the two parties are just too far apart to come to any agreement and a trial is necessary.

Clients have come to me before their litigation asking that I try to talk with the other side and maybe work something out. Most settlements don’t satisfy everybody by definition. If you get most of what you want, the client is generally happy. I like to think that I get good results for my clients and that’s the bottom line.

What does it take to become a good negotiator?

Negotiating takes an enormous amount of time. The key is doing your homework before negotiations actually start. With each case, you have to develop a strategy. You have to predict the end game and how you are going to get to that end. You can’t know the projected outcome if you haven’t done your homework. It takes persistence and finding a common ground with your opponent.

The final thing is be yourself. It drives me crazy when I’m dealing with somebody who is obviously posturing, acting tough because he or she thinks that will be an effective tool. Take lots of notes, be organized, prepare for a negotiating session almost as much as you would prepare if you were a lawyer going to court. It doesn’t matter if you’re going into an important business meeting or into the local appliance store that sold you a faulty dishwasher. You need to be prepared.

Go in with a notebook. Show the person that you are ready to fight, that you have information and that you have support for your position. I think that people are impressed by that at the start. They know they are dealing with someone who has done his homework and who’s ready to fight for their client’s position or for their own.

I have learned that being organized, doing your homework and taking notes provides you with the ammunition you need when you are challenged with questions. I make sure I can quickly find a response and not fumble around with papers. If you look like you know what you’re doing, your opponent tends to give you more credit when you present your side.

Once the negotiations begin, everyone has their own style. I’m not a believer, for example, in being sarcastic. When personalities get in the way, it causes a negotiation that is two feet apart to now become four feet apart. Emotions make it harder to reach an agreement, especially where money is concerned.

If I find myself getting angry or believing that the other side is unreasonable, I take a break. When we resume, I keep trying to talk to my opponent at the negotiating table to try again to find that common ground so that we can get back on a subject that we agree upon.

What happens when you reach a stalemate during negotiations?

If this occurs, I will put my points in writing. Sometimes seeing the other side, point by point, can help to persuade your opponent into action and a resolve. I also develop a checklist of points I don’t want to forget to make.

When I am negotiating a player contract and I feel the agent isn’t listening, I’ll develop a list of point A, B and C in a particular order to detail my thoughts. Writing it all out gives me the chance to give my rationale and that’s very important in baseball contracts. I want the agent to know we just didn’t pick this number out of the air. We thought it out, well-reasoned and fair. It shows my opponent that he at least needs to consider the figure and counter an offer. I know what I want and try to keep e veryone focused to that end.

What was the most difficult negotiation you were ever involved in and why?

Well, I hesitate to talk about specifics. You know I can’t mention names, but it is in the baseball context. There was a negotiation about a year and a half ago with a player that ended in a long-term contract. There were points during the negotiation, though, when it seemed like it was never going to happen. We were too far apart and not just on the numbers. Sometimes the numbers are the easiest to be reached. We were far apart on the length of the contract.

We were also very far apart on the way they viewed their player’s ability. They were comparing him to superstars and we were comparing him to a middle-of-the-roader, a solid player. Philosophically, we were at completely different places as to the outcome. This negotiation took months, with a lot of faxes back and forth and many lengthy telephone conversations.

We started gradually finding some common ground — that’s the key. Even when everything seems like you cannot agree on whether it’s dark outside, over time, you start to say, “Oh well, I tend to agree with you there.”

You try to build on the one or two small points and try to get a little bit of consensus, and gradually we did. It took almost three months. There were several times we had to take a break and not speak for a week or two, the agent and myself. Over time, we gradually started to give a little and they started to give a little and eventually a deal was struck.

You must have a wonderful Pirates memorabilia collection.

No, I have never been a collector, and I have never asked for an autograph. Even when I was growing up, I was very uncomfortable asking. I would watch kids waiting in line with a baseball or program and I just couldn’t do it.

Do you find yourself negotiating at home with your family?

That’s the toughest negotiation, not so much with my wife — she’s pretty reasonable. The kids are another story. My wife is also an attorney, and our kids, whether it’s because we are both attorneys or whatever, they talk and negotiate everything. It goes from time to turn the TV off, reading for a half hour before bedtime — which they try to negotiate down to 15 minutes, snack time or bath time.

Everything is a negotiation. I try to set down rules in the house. I tell the kids I want the TV to go off at 6:30 p.m. because I don’t want to negotiate the issue every evening. I’ll get home late and they have a wonderful rationale for why the TV is on past 6:30.

I find that every rule I use to negotiate in my business, I break with my family. I get angry, I raise my voice, I break my own rules. And the kicker is that my 10-year-old is good. She’s really good. Many times I’ve told the kids, “This is not negotiable, don’t even try. Don’t waste your time with arguments because I’m not bending.” Of course, I’ve bent so many times after saying “no” that they don’t stop. So much for family negotiations.