º¬Ðß²ÝÉçÇø

When it comes to mind over legal matters, Jasmine Chen, the legal director (China, India and Mongolia) of Weir Group and a certified national psychological counsellor (level II) in China, explains how psychology can improve the work and well-being of in-house counsel

Legal work is never just about statutes and regulations. At its core, it is about people. As early as 1881, US Supreme Court justice Oliver Wendell Holmes Jr summed up that ¡°the life of the law has not been logic: it has been experience¡±. Entering the 21st century, legal psychologist Jean R Sternlight and Jennifer Robbenholt also argued that ¡°good lawyers should be good psychologists¡±.

In the daily work of in-house counsel, beyond researching and interpreting laws, regulations, contract clauses and legal issues, a vast portion of the role involves communicating with people across the organisation and beyond, including colleagues from other departments, clients, suppliers, counterparties in disputes, regulators, external counsel and intermediary institutions.

For legal professionals, the ability to understand others¡¯ decision making processes and master interpersonal communication is a core competency.

A working knowledge of psychology can provide a decisive edge for in-house counsel. It sharpens their ability to navigate through negotiations, internal communication, contract review and dispute resolution. This article explores practical psychological principles and techniques that can be applied in their daily work.

Legal negotiation

In areas such as contracts, investment and disputes, in-house counsel are often tasked with hefty negotiations, which are fundamentally a tug of war of business interests and positions, with legal terms being only one part of the struggle. In-house counsel can draw on the following psychological insights into human thinking and decision making for more favourable outcomes.

Anchoring effect. Identified by psychologists Daniel Kahneman and Amos Tversky, the anchoring effect refers to people¡¯s tendency to rely heavily on the first piece of information or number they encounter (the ¡°anchor¡±) when making decisions, allowing it to shape subsequent judgements.

In negotiations, this effect can be leveraged by taking the initiative in the first round of a proposal, even if it appears aggressive, as it will set the baseline for the entire discussion. In-house counsel should be prepared to carefully introduce the calculated ¡°legal anchors¡±, such as compensation figures or contract frameworks, to secure an anchor point and steer the direction of the talks. Conversely, it is equally important to recognise when the counterparty attempts to ¡°drop an anchor¡± first, and to strategically ignore or reset it where appropriate.

Reciprocity principle. This principle, proposed by social psychologist Philip Zimbardo, suggests that human relationships are often built on and maintained by reciprocal exchanges of benefit. This is echoed in the China¡¯s ancient Classic of Poetry: ¡°When one throws to me a peach, I return to him a plum.¡± In most cases, people are inclined to reciprocate what they receive from others.

In practice, in-house counsel can use small, deliberate concessions on a non-critical clause to encourage reciprocal movement from the other side on more significant issues. This approach can be highly effective, provided that concessions are well timed, carefully paced and clearly positioned as meaningful. Unnecessary or hasty concessions should be avoided.

Commitment and consistency principle. Proposed by psychologist Leon Festinger, this principle holds that people have a strong tendency to strive for alignment between their words and actions. Once they have made a commitment or adopted a position, they experience internal and external pressure to remain consistent. Traditional Chinese culture has long reflected this through proverbs like: ¡°A word once spoken cannot be recalled¡±.

In negotiations, in-house counsel can guide the counterparty to make public commitments early on. This increases the psychological pressure on them to remain consistent when more significant issues arise later. It is advisable to start with relatively minor issues so as to lower the psychological barrier to making commitments.

Emotional awareness and management. Negotiations are not purely rational exchanges. They are also emotional interactions. Effective negotiators remain attentive to emotional signals such as frustration, anxiety or urgency displayed by the other side. Equally important is managing one¡¯s own emotional responses, avoiding impulsive reactions or escalation.

When discussions become tense or adversarial, in-house counsel should maintain a calm, empathetic and listening posture to help both sides calm down. This often helps to restore productive dialogue, break impasses and move negotiations forward.