Ewing Kauffman’s Golden Rule

Renowned Kansas City entrepreneur Ewing Kauffman (1916 – 1993) believed in the “golden rule.” I heard him explain this principle many years ago on a cold January morning to a large hotel ballroom only partially filled due to an overnight snowstorm. He showed up anyhow that morning, because he knew some of us would be there, and he gave us his best stuff. As “Mr. K” explained, he had developed confidence in the golden rule principle not for reasons of morality, although it certainly was value-based, but primarily because he had discovered it was good business and in his own self-interest. In his experience, people who worked for him or did business deals with him would perform better or enter into a more favorable transaction if he treated them in the same way he wanted them to treat him. Make sure the other party can find success, and they will help you be successful too.

At Krause Law we agree with Mr. K, and that is how we recommend approaching negotiations and dispute resolution. We reject the age-old lawyer strategy of starting at the far end of the scale and negotiating toward the middle, hoping to get the other party as far on your side as possible. That is merely a way to create an unnecessary dispute among parties who very likely have already decided they want to do a deal together and would prefer to get along. Instead, we think the best first step is to figure out what the other party really needs in order to do a deal, and then find a way to get that to the other party on terms that are great for our side.

When we draft documents, we generally try to make them as fair and even-handed as possible, and to only send out documents to the other side that we think are already likely to be acceptable to them. From that point on, the document flow is primarily about making sure the document is understandable and fairly describes the parties’ deal, so as to be predictable and enforceable in the long-run.

The same approach can be valuable in resolving disputes. A natural tendency, particularly when tempers flare or we become defensive, is to “bring the heat” and fight back. However, if a dispute is to be resolved, then it nearly always takes both sides making difficult concessions. The key to making a difficult concession is to have a good understanding of the other party’s most important interests, and then targeting those concessions to their interests. Our recommendation: Whenever possible, utilize the “golden rule” as an effective tool for achieving good results.