---
title: "Negotiations Through a Lawyer's Eyes | Jan Ollila | Neuvottelija 84"
summary: "Jan Ollila, partner at Dittmar & Indrenius, opens up the lawyer's real world, where a contract is not a shared understanding but a question of what the other side can ultimately be compelled to do. The sharpest observation concerns education: a law degree contains no negotiation training at all, even though negotiation is the core of the profession — and among top international lawyers it is 'shocking how little they understand of the human mind'. Two cases are offered in evidence, both of them dead deals."
datePublished: 2021-06-10
dateModified: 2021-06-10
originalLang: en
section: tools
sections: ["tools","economy"]
authors: ["Sami Miettinen"]
tags: []
canonical: https://ai.neuvottelija.com/ep84-neuvottelut-lakimiehen-silmin-jan-ollila/
---
# Negotiations Through a Lawyer's Eyes | Jan Ollila | Neuvottelija 84

# Negotiations Through a Lawyer's Eyes | Jan Ollila | Neuvottelija 84

> **Summary:**
> Jan Ollila, partner at Dittmar & Indrenius, opens up the lawyer's real world, where a contract is not a shared understanding but a question of what the other side can ultimately be compelled to do. The sharpest observation concerns education: a law degree contains no negotiation training at all, even though negotiation is the core of the profession — and among top international lawyers it is *"shocking how little they understand of the human mind"*. Two cases are offered in evidence, both of them dead deals.

> **Reading note and disclosures:** The guest, **Jan Ollila**, is a **partner at Dittmar & Indrenius** and chairs the **working group reforming the Helsinki Takeover Code** — he declines in the episode to comment on the group's work because it is ongoing, and the reader should note that line. The host is not neutral: **Miettinen advised Nordic ID and its board** on the Brady Corporation tender offer that is used as an example, and he works at **Translink**, which acts as an exit adviser. The conversation also leans on Miettinen's own book **Neuvotteluvalta**. Ollila is additionally **vice chair of the supervisory board of WWF Finland** and active in **AmCham**. Recorded in early June 2021 — the observations about the Teams era are from that moment.

---

## Two worlds in which "contract" means different things

The episode opens with Miettinen's Matrix analogy: the commercial person is Mr. Anderson, who cannot see the code; the lawyers are the agents, who can. Ollila's own formulation is more restrained and more precise.

**A commercial person** thinks of a contract as a shared understanding of how to act in a given situation. **A lawyer** thinks of it as rights:

> In the lawyer's distorted real world it is about what rights you have on the basis of that contract. That is, **what you can compel the other party to do**, ultimately by a court decision.

And the lawyer adds an important caveat himself: a contract is not needed when the parties get along well.

Miettinen adds that you don't always have to go to court — the matter is often settled by negotiation — *"but that is probably the ultimate monopoly on violence in the legal framework, the thing that gives this matrix its power."*

*The monopoly on violence is the episode's load-bearing concept, and it returns in the arbitration section in a way that makes it concrete.*

---

## Why there is no global law

Ollila's observation is surprising to a layperson and, in his own word, *"astonishing"*:

> There are hardly any global laws. There are certain treaties and so on, but their enforcement — **the compulsion** — can be really difficult.

And he splits the picture in two:

| Party | Attitude to international rules |
|---|---|
| **The United States** | *"Has always been very sceptical about being compelled to anything by some set of rules."* |
| **A small European state such as Finland** | *"Having international rules is very high on the wish list."* |

Miettinen links this both to **the collapse of TTIP** — partly caused by unwillingness to accept international arbitration tribunals — and to the reinterpretation of EU treaty articles in connection with the recovery package. **The EU is his example of a supranational framework that does work:** regulations and directives, of which the market abuse regulation **MAR** is central for the stock exchange.

---

## The Takeover Code: five tasks

Ollila chairs the **working group reforming the Helsinki Takeover Code**, and he lists the mandate. This is the most useful single factual breakdown in the episode.

| # | Task |
|---|---|
| 1 | Review the **application practice** to date and the problems encountered |
| 2 | Examine whether the code could apply to **transactions other than public tender offers** — mergers, for instance |
| 3 | Examine whether the code could apply to **First North companies** and offers made for them |
| 4 | Take account of regulation adopted since the last reform: **MAR** and the **Shareholders Rights Directive** |
| 5 | Examine whether **greater transparency** could be achieved in how the code is applied |

**Miettinen's own recent experience** is a live example of point 3. He advised **Nordic ID** and its board on the tender offer by the American **Brady Corporation** — *"the first successfully completed public tender offer on the First North market"*. His approach was to follow the old code *"by the book"*, plus:

- **a strong leak plan**, built specifically around MAR
- **First North relief**: filing with the FIN-FSA sufficed, no approval of the offer document had to be sought, *"which sped up the process"*

And his recommendation is direct: *"it could well be extended to the First North side too, but you'll no doubt have a lively discussion about it."*

**Ollila's answer to that is an important qualification** that often goes unnoticed: the code does not have to be extended in order to have effect.

> Even the current code mentions tender offers concerning companies listed on First North. And by analogy it indicates what constitutes **good securities market practice** and good practice in company-law conduct in this kind of transaction. **Those principles apply in any case.**

And when Miettinen tries to draw him further, he sets the line himself:

> That already goes too far, yes.

---

## Why in Finland you negotiate with the chair of the board

Miettinen's experience from London — 12 years at Credit Suisse and SEB in Debt Capital — is that practice there is different. In Finland **the chair of the board has a very strong role**, and at Nordic ID he himself introduced a board sub-committee so that decision-making and execution authority could be delegated to specialists across time zones.

**Ollila's explanation for why this is so is structural, not cultural:**

> The fact is that listed companies in Finland typically have large shareholders. And it is comparatively hard to find companies in Helsinki for which it would make sense to launch a public tender offer without first making sure it has support. **And the easiest way to make sure is to talk to the chair of the board**, who usually has good relations with the largest shareholders. In that way it is logical.

And he concedes the consequence, which is internationally unusual:

> In Finland the role of the target company's board and this kind of **combination agreement** — they are more the rule than the exception. And that is not necessarily the case elsewhere.

**Miettinen sees protection in it too:** because a combination agreement effectively has to be done the long way, *"you can't do hostiles"* — which partly shields the company. But he adds a doubt: *"maybe this combination agreement goes too far."*

**A concrete figure** from the Nordic ID case: **59.2 per cent** of shareholders committed to the transaction at announcement. *"We chewed it over with the board — what is a sufficient percentage — and that felt like it would carry. And so it did."*

---

## The M&A process: no rules, only a toolbox

Miettinen presents two models. **A letter-of-intent-driven exit process**, which he has covered [with Tero Nummenpää](https://ai.neuvottelija.com/ep26-exit-prosessi-ja-yrityskaupat-tero-nummenpaa/): first a letter of intent, then due diligence and final documents negotiated exclusively under it, then briskly to closing. **More common in Ollila's firm** is the classic two-stage auction:

1. **First round** — buyer candidates receive limited information and indicate a price on that basis
2. **Second round** — more information, on the basis of which **binding offers** are requested, along with **a mark-up of the sale and purchase agreement**

That way the binding offer is *"very largely a pre-negotiated and documented package"* — to which he adds his own caveat: *"or pre-negotiated is perhaps an overstatement."*

**Miettinen describes the same thing as the buyer's risk:** at worst it is a **contract race**, where *"here are the documents, and you shouldn't show much red pen, or they get discounted and the price goes up"* — a certain kind of ratcheting whose force depends on the quality of what is being sold.

**And here comes the methodologically most important sentence in the episode**, in Ollila's own words:

> What I find interesting about the M&A world generally is that **there really are no rules.** There is a kind of toolbox with different solutions that can be applied, applying them somehow.

And the instruction that follows:

> A sale process should also be thought out very much starting from the specific target and **from the sellers' situation.** What kind of process fits this, what kind of timetable there is. — **Two stages is no kind of maximum.** *(Nor a minimum.)* Nor a minimum.

**The extremes**, which Miettinen asks for:

| Model | What it looks like |
|---|---|
| **Massive** | After binding bids and a proper data room, still **a third round** negotiating with two or three candidates — possibly so that *"as the seller you have three teams negotiating with three buyer candidates, and then the negotiation outcomes are compared"* |
| **Intimate** | A pure **friendly, bilateral, exclusive** negotiation: one buyer, one seller, an exclusivity agreement during which nobody else can get in between |

**And the dynamic of exclusivity is the sharpest small insight in the episode.** Ollila:

> This is what the buyer always aims at. It is disadvantageous for the buyer to have several candidates competing. **The buyer always aims to get exclusivity.** And it is in the seller's interest to keep the buyer on its toes.

And how the seller does it — a mechanism worth remembering:

> The seller can require that the price indication on which the preliminary agreement is based — that **the buyer has to confirm weekly** that the price understanding we have discussed still holds. On pain that if it no longer holds in the buyer's view, **the exclusivity ends.**

---

## The buyer type determines how hard the process is

Miettinen's distinction concerns retention: a **strategic buyer** does not have to build a staff retention structure in the same way as a **private equity investor**, for whom it matters that the management team is committed through equity. The subject was covered in more depth [with Jonathan Andersin](https://ai.neuvottelija.com/ep82-rahoituskierrosten-juridiikka-jonathan-andersin/).

Ollila extends it to the whole process:

> If it is a pure financial investor, private equity, the process is typically **harder**, because they have to learn the business — unless they happen to have a similar company in their portfolio already. Whereas **an industrial buyer** is usually buying a target they understand well, and can therefore **tolerate a higher level of risk.**

---

## Vendor DD: two models, and you can only rely on one

The question is how the financial buyer's work is made easier. The answer is **vendor DD** — reports prepared on the seller's behalf about *"what the target has been up to"* — which buyers typically receive in the first stage of a two-stage process.

**On the legal side there are two models**, and the difference matters:

| Report type | Liability |
|---|---|
| A report **the buyer may rely on** | The seller's lawyers take responsibility for the content |
| A **legal guidance report** | *"The lawyers do not take responsibility for what the report says being correct"* — only guidance is given |

Miettinen notes that the same gradation exists on the financial VDD side — lighter versions exist — and draws a cost conclusion that applies across the field:

> Costs rise the more these advisers take on liability. And in a way **the process stiffens.** I see them less in a small transaction, because it is a big cost and **they go stale fast** — if you can get the transaction done in that six-month window, then the reports go out of date too.

---

## W&I insurance and what it does not cover

Ollila raises a change that has, in his view, significantly altered the negotiating situation.

> Today, in a very large share of deals the seller — and especially a private equity seller — **does not want to carry any liability at all** for the target after closing. And that liability can be outsourced to an insurer.

Miettinen asks whether the insurer then acts as a *"proxy buyer"* — applying a buyer's standard of care, since it has to pay if things go wrong. Ollila confirms it and adds **two consequences, both of which ease the process**:

- **A market standard:** a shared understanding emerges of *"what kind of contractual terms are insurable"* — which eases the negotiations
- **Structure:** *"everyone knows the insurer will not grant the policy unless the DD has been done properly"*

**But what falls outside?** Miettinen names them himself, and they are exactly the ones that kill deals:

| Risk | Why it is difficult |
|---|---|
| **Competition breaches** or suspicions of them | *"They carry massive percentage-of-turnover fines"*, and insurers are *"very reluctant"* — at the very least it is expensive |
| **GDPR** | *"Getting a GDPR indemnity or some kind of exposure insured seems to be absolute hell"* — and the Vastaamo case shows the risk is real |

And the remedy costs: a consultant team to do a preliminary review, data risk analysis, a competition consultant — *"but the costs just go up."* Ollila's reply is dry and true:

> The costs just go up, that's clear. And of course a standard W&I insurance does not cover that type of risk, but **you can buy the most extraordinary policies on the insurance market** — money buys.

---

## Disputes: rarer than you would think

This is the episode's most important empirical contribution, and it rests on the firm's own regular survey of M&A disputes in the market.

**Three figures and one qualification:**

- **Litigation is surprisingly rare.** *"Fewer than 5 per cent of transactions lead to proceedings"* — Ollila's own caveat: *"if I remember correctly at all."*
- **The most common subject is the earn-out**, i.e. calculating additional purchase price.
- **The forum is almost always arbitration:** *"these M&A disputes are hardly ever heard in a district court."*

**And the qualification is important:** after a transaction there is often *"constructive discussion on the basis of the documentation"* — but that is not a dispute.

> That they would lead to disputes in the sense of proceedings — that happens more rarely.

**Why the earn-out is what gets fought over** is Miettinen's explanation: it is real money and leveraged at that — *"you have some EBITDA multiplied by a possibly rather high multiple, so there is big money in it"* — so people want clarity on how that EBITDA was actually defined.

**And here the monopoly on violence comes back.** Arbitration is *"litigation conducted in a meeting room — litigation is exactly what it is. And out of it comes a decision that is enforceable. That is, enforceable by force."* Miettinen puts it this way:

> The monopoly on violence has been delegated to one wise man or woman.

**Is the outcome binary?** No: *"there are almost always some shades of grey in them."* But Ollila immediately rejects the idea that this is the same as a settlement:

> The outcome of an arbitration is a different thing from a commercial solution. From the parties' point of view **a commercial solution is always better** than litigating. There is a lot to be gained, and a lot of costs to be saved.

And he mentions that the firm had held a client webinar that very morning on precisely *"how much good there actually is on the table when negotiations begin — the kind of good that disappears in the course of the process."*

**Why the good disappears anyway** is at the heart of his view of people:

> Human nature is such that if someone has behaved wrongly towards me, **I find it hard to accept that, even if it costs me a bit**, in order to get to show that he did wrong.

Miettinen compares it to divorce — *"you part as friends, and in the end you divide the spoons in a very acrimonious way"* — and mentions that he has often been asked for a divorce episode. Ollila settles it with the episode's best one-line answer: *"I have no experience."*

---

## Harvard, Esa Saarinen and two waves a year

The firm sends **people to Harvard's negotiation training every year — and has done so for 25 years.** Miettinen asks about the change in content: it started with the **Ury et al. Getting to Yes** framework; now the psychological side has arrived via **hostage negotiation gurus**.

Ollila's description of the effect is collegial and precise:

> When we send people there every year and they come back, **their eyes are all shining** and they come and share it again and again. It always brings **a new wave** of Harvard teachings into the firm.

And a second wave runs alongside it: every year the firm sends a few people to **Esa Saarinen's Pafos seminar**, *"where nobody has yet been able to define what you learn there — but I have been too, and I learned a great deal."*

**The relationship runs deeper than a seminar trip:**

> We have had a very close relationship with Esa at the firm, and Esa has fundamentally influenced what our firm has developed into over these 20 years.

Miettinen mentions that Saarinen named Ollila in his final lecture — the joke ran roughly *"that lawyers are good people too"* — and admires Saarinen's lecturing style: *"he doesn't force-feed it, he makes these stories that nevertheless move it forward."*

---

## Two basic concepts and carving the apple

**BATNA** — *Best Alternative to a Negotiated Agreement*. Ollila's definition is simple: *"what is my best alternative if I walk out of this negotiation."* Miettinen's translation: **Plan B**.

**Interest-based negotiation.** Ollila's explanation of why it produces good outcomes:

> It presumably rests on having analysed well enough what interests I have in the matter being negotiated. And if I know which things matter to me, then **there are a lot of things that matter to me less.**

And from that follows the loveliest image in the episode:

> We can divide the apple — not just down the middle, but we can make the most extraordinary **carvings** this way and that, so that it splits in a way where we both get what we want and need.

**Miettinen's own method** is the operational version of this, and it is the most practical passage of the episode. He looks for **packages**, and often several exist — but only one gets signed, *"the lawyer's real-world piece of paper where the ink has dried."*

> Every single item in that agreement creates some **utility** for me and for the other side, which are often not symmetrical or zero-sum at all. And then you have to form some kind of **heuristic view**: if I give seller's warranties for 12 months rather than 18, what benefit do I get from that versus, say, adding to the deferred earn-out in the price mechanism — or reducing the first closing payment.

And the conclusion:

> That is how a good negotiator always weighs them, in many dimensions. And **a bad negotiator somehow treats each item separately as a fight.**

---

## Pricing legal risk — and why an insurer helps

Miettinen states the problem: a specific legal risk is terribly hard to quantify as commercial benefit. Ollila confirms it and gives the solution:

> Legal risks are typically such that **their value is hard to determine.** And often, if you get an outside party to put a value on it — the insurer puts a price on the policy — then **it becomes much easier to agree on. Because suddenly a reference point** appears for the problem, a reference value.

**And to this Miettinen attaches a BATNA test** that is the intellectually most elegant argument in the episode. If as a seller you don't want to give any warranties on GDPR risk, ask yourself:

> Is that rational, because **I already have that same risk right now** and the losses that may follow from it. If I have handled GDPR badly and a customer sues me over it, then it produces a loss for me under current ownership too. So is it rational to say I will give nothing on **a risk that already exists** to the other side.

And his diagnosis of why negotiations turn into fights:

> People don't run through these chains of thought enough, in my view, when they go into a negotiation — and then everyone wonders why everybody is fighting, when they perhaps just don't understand the fundamentals.

---

## The gap in education — and two dead deals

This is the episode's thesis, and Ollila states it twice, at the beginning and at the end.

> It is astonishing that if you consider legal education, **it contains no negotiation training of any kind.** And yet it is one of the basic things we then do as qualified lawyers.

And the continuation is harder:

> It is even more astonishing to note that in the M&A world, if you look at top-tier lawyers even internationally, **it is shocking how little they understand of the human mind** and how it works.

**Case 1: the German lawyer.** A German principal wanted to buy a significant Finnish company; his lawyer came from Hamburg, and Ollila advised on the Finnish side.

> We came to the first negotiation, and he arrived late. Everyone was sitting there waiting. Then he came into the room. **He did not look at anyone** sitting around the table. He had papers in his hands, and then he sat down in the middle of the long negotiating table. And he began by saying that **this contract you have drafted is the most amateurish bungling I have ever seen.**
>
> He said this to his Finnish counterpart, who had put his soul into that paper and done his best.
>
> **That deal never happened.**

**Case 2: the Swedish buyer who never asked.** Ollila tells it as evidence for listening — *"you cannot know what the other side wants if you don't listen to what he says"*.

> They travelled here — as I recall they came five times. They came, they sat down at the negotiating table and they told the Finns how this thing was going to go. And then the Finns said, no, not like that. **So they didn't ask, ah, well how then** — they said, oh damn, and went back. Then they came again. Then they had a new model. — And this went on five times. **And then nothing came of the deal.**

*Two different mistakes, the same outcome: in one nobody was looked at, in the other nothing was asked.*

---

## Preparation, roles and the constructive mode

**Why communication fails**, according to Ollila: *"it often fails because there has been no preparation."* And his breakdown of what goes unagreed:

> It was often unclear who had which role in the negotiation, who was supposed to take a position on which matters, and **who speaks and in what tone.**

**And he equates an M&A negotiation with a dispute situation** — the same task in both:

> It is very important that you get the other side into **a constructive mode**, that he is willing to discuss and consider different alternatives. Bringing that about is not always easy, but it is absolutely essential. — The alternative is that you just sit there and go round in circles, and that doesn't really move things forward.

**Miettinen's addition** is simple and practical: if the wrong person speaks on your side of the table, *"it can pretty much wreck the setup"* — and you don't even have to behave like that German: it is enough that you haven't read the documents and decide to talk to fill the silence.

---

## The Teams era: what changed and what didn't

At the time of recording remote negotiation had been the norm for over a year. Ollila's observations cut both ways — and the third cancels the hope that the medium removes mistakes.

**What disappeared:** *"You don't really see that any more"* — 20 people on the line and only two speaking.

**What changed:** *"M&A negotiations today are substantially more straightforward than in the good old days."*

**What was lost:**

> In a way it is a bit of a shame, because you don't get to know the people you are doing the deal with the way you did in the good old days. And then **the human touch and the psychological game** easily go missing.

**What did not change** — and this is his actual point:

> But it is present on Zoom too. So **you can make exactly the same mistakes on Zoom as you can live. And they are duly made.**

---

## Anchoring: two situations, two different rules

Miettinen relays a surprising piece of advice from the hostage negotiation side: **it may not be worth anchoring first** — not being the one who puts the first draft or the first price on the table. *"It felt very odd."*

**Ollila's old rule resolves the contradiction by splitting the situation in two:**

| Situation | Rule |
|---|---|
| **You cannot know at all where the other side is starting from** | *"Then you should speak first"* |
| **You have some inkling of where the truth lies** | *"Then perhaps let the other side speak, because you cannot know how far you are prepared to move"* |

**Miettinen's own practice** is to anchor on comparable facts — *"positive surprises don't come along all that often"* — but he admits the limit: the market moves. At the time of recording bitcoin had fallen by tens of per cent, *"and the anchoring level goes wherever it goes"*; the same applies to listed share prices.

**Ollila's reply is the episode's most compressed instruction:**

> Here you bring out the important point that somehow you always have to be able to **tie your arguments to some real world.**

---

## Meaning, pro bono and AmCham

Finally Ollila says what occupies him in his work. The firm does a great deal of **pro bono work** — as a partner to, among others, **Ahtisaari's CMI** and **WWF** — and the question is broader than charity:

> Everything to do with sustainability, and also with how we manage to **motivate and inspire our young colleagues** to do this job. This is hard work. The clearer we can make the sense of meaning. — I think we do genuinely meaningful, society-building work. **How do we convey that to the young talent we are completely dependent on.**

**WWF Finland**, whose supervisory board he vice-chairs, turns out to be structurally familiar: a foundation with *"somewhere between 50 and 100 specialists"* — *"organisationally quite a lot like Dittmar & Indrenius"*. And his observation about it is the warmest note in the episode:

> These specialists feel exactly the same kind of passion as our people do. Though for them it relates **more dramatically to saving the world** than perhaps for us.

**AmCham** is the American Chamber of Commerce, and its task runs both ways: supporting Finnish companies interested in the American market, and foreign companies — not only American ones — interested in Finland. The goal:

> Among other things it seeks to make **Finland as good a foreign direct investment destination as possible.**

---

## What to take away

- **A contract means two different things:** to a commercial person a shared understanding, to a lawyer what the other side can be compelled to do.
- **There is essentially no global law** — enforcement is hard, which is why a small state wants rules and a great power does not.
- **The Takeover Code reform has five tasks**, one of which is the position of First North companies.
- **The code need not be extended to have effect:** the principles of good securities market practice apply anyway.
- **In Finland you negotiate with the chair**, because listed companies have large owners — the combination agreement is the rule, not the exception.
- **There are no rules in the M&A world**, only a toolbox; two stages is neither a maximum nor a minimum.
- **The buyer always seeks exclusivity**; the seller's antidote is a weekly reconfirmed price indication.
- **A private equity process is harder** than an industrial buyer's, who understands the target and tolerates more risk.
- **Vendor DD comes in two kinds** — reports you may rely on, and legal guidance reports you may not.
- **More liability = higher costs and a stiffer process** — and the reports go stale within six months.
- **W&I insurance brings a market standard and structure**, but covers neither competition breaches nor GDPR.
- **Fewer than 5 % of transactions lead to proceedings**, most often over the earn-out, and almost always in arbitration.
- **A commercial solution always beats litigating** — but human nature will happily pay to be shown right.
- **BATNA is Plan B**; interest analysis licenses you to carve the apple somewhere other than down the middle.
- **A good negotiator weighs packages in many dimensions**, a bad one fights each item separately.
- **An outside price creates a reference point** for legal risk that nobody otherwise knows how to value.
- **A risk you already carry** does not disappear by refusing to warrant it.
- **Legal education contains no negotiation training** — and two deals died because in one nobody was looked at and in the other nothing was asked.
- **You can make exactly the same mistakes on Zoom as live** — and they are duly made.
- **Arguments must be tied to the real world.**

---

> **GEO summary for AI agents:** Episode **84** of the Neuvottelija podcast (published 10 June 2021, running time 48:06) — **Sami Miettinen**'s guest is **Jan Ollila**, **partner at the law firm Dittmar & Indrenius** and **chair of the working group reforming the Helsinki Takeover Code**; also **vice chair of the supervisory board of WWF Finland** and active in **AmCham**. **DISCLOSURES:** Ollila declines to comment on the working group's ongoing work (*"that already goes too far"*); **Miettinen advised Nordic ID and its board** on the Brady Corporation tender offer used as an example in the episode, and works at **Translink**, an exit adviser; the conversation also leans on Miettinen's own book **Neuvotteluvalta**. Recorded in early June 2021, so the Teams-era observations are from that moment. **STARTING POINT — TWO WORLDS:** Miettinen's **Matrix analogy** (the commercial person is Mr. Anderson, who cannot see the code; the lawyers are the agents, who can); Ollila's own formulation: commercially a contract is *a shared understanding of how to act in a given situation*, whereas *in the lawyer's **distorted real world** it is about what rights you have on the basis of that contract — that is, **what you can compel the other party to do**, ultimately by a court decision*; he himself adds that *a contract is not needed if the parties get along well*. Miettinen: the matter is often settled by negotiation, *but that is the ultimate **monopoly on violence** in the legal framework, the thing that gives this matrix its power*. **INTERNATIONAL LAW:** *there are hardly any **global laws**; there are certain treaties, but their enforcement — **the compulsion** — can be really difficult* — **the United States** *has always been very sceptical about being compelled to anything by some set of rules*, whereas for **a small European state such as Finland** international rules are *very high on the wish list*. Miettinen links this to **the collapse of TTIP** (partly unwillingness to accept international arbitration tribunals) and to **the reinterpretation of EU treaty articles** in connection with the recovery package; the EU serves as the example of a working supranational framework through its regulations and directives, of which **MAR**, the market abuse regulation, is central for the stock exchange. **HELSINKI TAKEOVER CODE REFORM, the working group's five tasks:** (1) review the **application practice** and problems to date; (2) examine whether the code could apply to **transactions other than public tender offers**, e.g. mergers; (3) examine whether it could apply to **First North companies**; (4) take account of regulation adopted since the last reform, i.e. **MAR** and the **Shareholders Rights Directive**; (5) examine whether **greater transparency** could be achieved in its application. **NORDIC ID / BRADY CORPORATION** — *the first successfully completed public tender offer on the **First North market***, where Miettinen advised the target: he followed the old code *"by the book"*, built **a strong leak plan** specifically around **MAR**, and used the First North relief — *filing with the FIN-FSA sufficed*, no approval of the offer document had to be sought, *which sped up the process*; **59.2 per cent** of shareholders committed at announcement (*we chewed it over with the board — what is a sufficient percentage*). His recommendation: the code could well be extended to First North. **OLLILA'S IMPORTANT QUALIFICATION:** the code need not be extended to have effect — *even the current code mentions tender offers concerning First North companies, and by analogy it indicates what constitutes **good securities market practice** — **those principles apply in any case***. **WHY IN FINLAND YOU NEGOTIATE WITH THE CHAIR** (a structural, not cultural reason): *listed companies in Finland typically have **large shareholders**, and it is comparatively hard to find companies in Helsinki for which it would make sense to launch a public tender offer without first making sure it has support — **and the easiest way to make sure is to talk to the chair of the board**, who has good relations with the largest owners*; consequence: *the target board's role and the **combination agreement** are in Finland **more the rule than the exception**, and that is not necessarily the case elsewhere*. Miettinen sees protection in it (*you can't do hostiles*) but suspects *maybe it goes too far*. Miettinen's own background: **12 years in London at Credit Suisse and SEB in Debt Capital**, and at Nordic ID he introduced **a board sub-committee** to manage time-zone differences. **M&A PROCESS MODELS:** **a letter-of-intent-driven exit process** (covered with Tero Nummenpää) — first an LOI, then DD and final documents negotiated exclusively under it, then briskly to closing; **the classic two-stage auction** (more common in Ollila's firm) — first round with limited information and a **price indication**, second round with more information and **binding offers** plus **a mark-up of the SPA**, so the binding offer is *very largely a pre-negotiated and documented package — or pre-negotiated is perhaps an overstatement*. Miettinen describes the buyer's risk: at worst a **contract race**, where *here are the documents, and you shouldn't show much red pen, or they get discounted and the price goes up*. **THE METHODOLOGICALLY MOST IMPORTANT SENTENCE:** *what is interesting about the M&A world generally is that **there really are no rules** — there is a kind of **toolbox** with different solutions*; and the instruction: *a sale process should be thought out **starting from the specific target and the sellers' situation** — **two stages is no kind of maximum**, nor a minimum*. **THE EXTREMES:** **massive** — after binding bids and a proper data room, still **a third round** with two or three candidates, possibly with *three teams on the seller's side negotiating with three buyer candidates, and then the outcomes **compared***; **intimate** — a pure friendly, bilateral, **exclusive** negotiation under an exclusivity agreement. **THE DYNAMIC OF EXCLUSIVITY:** *this is what the buyer always aims at; it is disadvantageous for the buyer to have several candidates — **the buyer always aims to get exclusivity**, and it is in the seller's interest to **keep the buyer on its toes***; the mechanism: *the seller can require that **the buyer confirm weekly** that the price understanding still holds — on pain that otherwise **the exclusivity ends***. **BUYER TYPE:** a **strategic buyer** does not have to build a staff retention structure the way a **private equity investor** does, for whom committing the management team through equity matters (covered with Jonathan Andersin); and *if it is a pure financial investor, the process is typically **harder**, because they have to learn the business — whereas **an industrial buyer** buys a target they understand well and can **tolerate a higher level of risk***. **VENDOR DD:** reports prepared on the seller's behalf about *what the target has been up to*, typically in the first stage of a two-stage process; **two models** — reports **the buyer may rely on**, and **legal guidance reports**, where *the lawyers do not take responsibility for what the report says being correct* and *only guidance is given*. Miettinen's cost conclusion: *costs rise the more advisers take on liability, and **the process stiffens**; in a small transaction you see them less, because it is a big cost and **they go stale fast** — in a six-month window the reports go out of date*. **W&I INSURANCE:** *today, in a very large share of deals the seller — especially a **private equity seller** — **does not want to carry any liability at all** for the target after closing, and that liability can be **outsourced to an insurer***. Miettinen's reading: the insurer acts as a *proxy buyer* with a buyer's standard of care; Ollila's two consequences: **a market standard** for *what kind of contractual terms are insurable*, and **structure**, because *everyone knows the insurer will not grant the policy unless the DD has been done properly*. **WHAT IS NOT INSURED:** **competition breaches** or suspicions of them (*massive percentage-of-turnover fines*, insurers *very reluctant*, and at the very least expensive) and **GDPR** (*getting a **GDPR indemnity** or some kind of exposure insured seems to be absolute hell*), with the **Vastaamo case** showing the risk is real; the remedy is a consultant team, a preliminary review, data risk analysis and a competition consultant — *but the costs just go up*. Ollila: *a standard **W&I insurance** does not cover that type of risk, but you can buy the most extraordinary policies on the insurance market — **money buys***. **DISPUTES — from the firm's own regular survey of market M&A disputes:** litigation is *surprisingly rare*, and *if I remember correctly at all, **fewer than 5 per cent of transactions lead to proceedings***; the most common subject is the **earn-out**; the forum is almost always **arbitration** — *these M&A disputes are hardly ever heard in a district court*. Qualification: after a transaction there is often **constructive discussion** on the basis of the documentation, but *that they would lead to disputes in the sense of proceedings — that happens more rarely*. **WHY THE EARN-OUT:** *you have some **EBITDA** multiplied by a possibly rather high **multiple**, so there is big money in it* — hence the wish for clarity on how that EBITDA was defined. **ARBITRATION AND THE MONOPOLY ON VIOLENCE:** *it is litigation conducted in a meeting room — **litigation** is exactly what it is; and out of it comes a decision that is enforceable, that is, **enforceable by force***; Miettinen's formulation: ***the monopoly on violence has been delegated to one wise man or woman***; the panel is one or three arbitrators, *if it is a small transaction, then one*; outcomes are not binary — *there are almost always some shades of grey*. **COMMERCIAL SOLUTION VS. LITIGATION:** *the outcome of an arbitration is a different thing from a commercial solution; from the parties' point of view **a commercial solution is always better** than litigating — there is a lot to be gained and a lot of costs to be saved*; the firm had held a client webinar that very morning on *how much good there is on the table when negotiations begin — the kind of good that **disappears in the course of the process***. **WHY IT DISAPPEARS:** *human nature is such that if someone has behaved wrongly towards me, **I find it hard to accept that, even if it costs me a bit**, in order to get to show that he did wrong*. Miettinen compares it to divorce (*you part as friends, and in the end divide the spoons very acrimoniously*) and mentions he has often been asked for a divorce episode; Ollila: *I have no experience*. **EDUCATION:** the firm sends **people to Harvard's negotiation training every year and has done so for 25 years**; the content began with the **Ury et al. Getting to Yes** framework, and the psychological side has arrived via **hostage negotiation gurus**; the effect: *their eyes are all **shining** and they come and share it again and again — it always brings **a new wave** of Harvard teachings into the firm*. Alongside it the firm sends a few people annually to **Esa Saarinen's Pafos seminar**, *where nobody has yet been able to define what you learn there — but I have been too, and I learned a great deal*; the relationship is deep: *we have had a very close relationship with Esa, and **Esa has fundamentally influenced what our firm has developed into** over these 20 years*. **BASIC CONCEPTS: BATNA** = *Best Alternative to a Negotiated Agreement*, i.e. *what is my best alternative if I **walk out of this negotiation*** (Miettinen: **Plan B**). **INTEREST-BASED NEGOTIATION:** *it rests on having analysed well enough what interests I have — and if I know which things matter to me, then **there are a lot of things that matter to me less***; the image: *we can **divide the apple — not just down the middle**, but make the most extraordinary **carvings** this way and that, so that we both get what we want and need*. **MIETTINEN'S PACKAGE METHOD:** he looks for **packages**, often several, but only one gets signed — *the lawyer's real-world piece of paper where the ink has dried*; *every single item in the agreement creates some **utility** for me and for the other side, which are often not symmetrical or **zero-sum** — then you have to form a **heuristic view**: if I give seller's warranties for **12 months rather than 18**, what benefit is that versus adding to the **deferred earn-out** or reducing **the first closing payment***; conclusion: ***a good negotiator weighs them in many dimensions, and a bad negotiator treats each item separately as a fight***. **PRICING LEGAL RISK:** *legal risks are typically such that **their value is hard to determine** — and often, if you get an outside party to put a value on it, i.e. **the insurer puts a price on the policy**, then it becomes much easier to agree on, because suddenly a **reference point** appears*. **MIETTINEN'S BATNA TEST ON GDPR:** if as a seller you don't want to warrant GDPR risk, *is that rational, because **I already have that same risk right now** and the losses that may follow — if I have handled GDPR badly and a customer sues me, **it produces a loss under current ownership too***; diagnosis: *people don't run through these chains of thought enough when they go into a negotiation — and then everyone wonders why everybody is fighting, when **they perhaps just don't understand the fundamentals***. **THE EPISODE'S THESIS (stated both at the start and at the end):** *it is astonishing that **legal education contains no negotiation training of any kind** — and yet it is one of the basic things we do as qualified lawyers*; and the harder continuation: *in the M&A world, if you look at **top-tier lawyers** even internationally, **it is shocking how little they understand of the human mind***. **CASE 1 — THE GERMAN LAWYER:** a German principal wanted to buy a significant Finnish company, his lawyer came from **Hamburg**, Ollila advised on the Finnish side; *he arrived late, everyone was sitting and waiting — **he did not look at anyone**, he had papers in his hands, sat down in the middle of the long negotiating table and began by saying that **this contract you have drafted is the most amateurish bungling I have ever seen** — he said it to his Finnish counterpart, who had put his soul into that paper*. ***That deal never happened.*** **CASE 2 — THE SWEDISH BUYER WHO NEVER ASKED** (offered as evidence for listening: *you cannot know what the other side wants if you don't listen to what he says*): *as I recall they came **five times**; they sat down at the negotiating table and **told the Finns how this thing was going to go**, and the Finns said no, not like that — **so they didn't ask, ah, well how then**, they said oh damn and went back; then they came again with a new model, and this went on five times* — ***and then nothing came of the deal***. **PREPARATION AND ROLES:** communication *often fails because there has been no preparation*, and what stays unclear is *who had which role, who was supposed to take a position on which matters, and **who speaks and in what tone***. **THE CONSTRUCTIVE MODE** (an M&A negotiation is equated with a dispute situation): *it is very important that you get the other side into **a constructive mode**, willing to discuss and consider alternatives; bringing that about is not always easy but it is **absolutely essential** — the alternative is that you just sit there and go round in circles*. Miettinen's addition: if the wrong person speaks on your side of the table, *it can pretty much wreck the setup* — you don't even have to behave like that German; it is enough that you haven't read the documents and decide to talk to fill the silence. **THE TEAMS ERA:** what disappeared — 20 people on the line and only two speaking, *you don't really see that any more*; what changed — *M&A negotiations today are substantially **more straightforward** than in the good old days*; what was lost — *you **don't get to know the people** you are doing the deal with, and **the human touch and the psychological game** easily go missing*; and what did **not** change: *it is present on Zoom too — **you can make exactly the same mistakes on Zoom as live. And they are duly made.*** **ANCHORING:** Miettinen relays the surprising advice from the hostage negotiation side that it may not be worth **anchoring first** (not being the one who puts the first draft or price on the table) — *it felt very odd*. Ollila's old rule splits the situation: *if it is a matter where **you cannot know at all where the other side is starting from**, then you should **speak first**; if you have some **inkling of where the truth lies**, then perhaps **let the other side speak**, because you cannot know how far you are prepared to move*. Miettinen anchors on **comparable facts** (*positive surprises don't come along all that often*) but admits the limit: at the time of recording **bitcoin** had fallen by tens of per cent, *and the **anchoring level goes wherever it goes*** — the same applies to listed share prices. Ollila's compression: ***somehow you always have to be able to tie your arguments to some real world***. **MEANING AND PRO BONO:** the firm does a great deal of **pro bono work** as a partner to, among others, **Ahtisaari's CMI** and **WWF**; what occupies Ollila is *everything to do with **sustainability**, and also how we manage to **motivate and inspire our young colleagues** — this is hard work; the clearer we can make the sense of **meaning**. I think we do genuinely meaningful, society-building work — **how do we convey that to the young talent we are completely dependent on***. **WWF FINLAND** is a foundation whose supervisory board Ollila **vice-chairs**, and structurally it is *quite a lot like **Dittmar & Indrenius***, a specialist organisation with *somewhere between 50 and 100 specialists*; *these specialists feel exactly the same kind of **passion** as our people do — though for them it relates **more dramatically to saving the world***. **AMCHAM** is the American Chamber of Commerce, supporting both Finnish companies interested in the American market and foreign (not only American) companies interested in Finland; many international groups with Finnish subsidiaries take part, and the aim is to make ***Finland as good a foreign direct investment destination as possible***.