Gas Light: Natural phenomena in transactional settings

Gas Light was a theatrical play performed in London in 1938. The play was a cultural hit. It was adapted to film in 1940. A second movie followed in 1944, starring Ingrid Bergman, a classic Hollywood actress known for her luminous beauty. It is a story about crafty manipulation of an innocent victim by a perfidious and homicidal sociopath. It touches on topics such as greed (the plot revolves around stolen gemstones), narcissism, lack of empathy, and malevolence. The victim questions her own sanity and her own hold of reality. “Gaslight” was an influential, high-budget movie. In the aftermath, the term gaslighting entered popular culture as a type of shorthand for hurtful psychological manipulation.

There is a philosophical school of thought which claims that all human relationships are transactional. Or at least, each relationship begins as a transactional one. It means that each relationship is built on an expectation of reciprocity. If one party fails to meet the expectations of the other, the relationship will suffer or be terminated. As an exception to this concept, some relationships are considered non-transactional. These tend to be long-term familial bonds, parent-child and spousal relationships. As a transactional lawyer, my professional experience falls squarely in the first group. What does transactional law have to do with gaslighting? Short answer: almost everything. For the longer version, please read below.

To understand how gaslighting works in transactional settings, we first need to lay out a typical transactional plot and its characters. Let’s say, a group of wealthy individual investors are getting together and working on a plan to acquire a company which they will own jointly. Or a group of corporate executives negotiate on behalf of their employers. They hold negotiations among themselves to define their roles in the deal. Simultaneously, the main deal promoters talk to the target company and its owners. All of these conversations are transactional. The personalities of the characters vary. Some people are brash, others are more mild-mannered. Some are louder and outspoken. Others prefer to operate quietly and behind the scenes. Strangely enough, in all corporate deals, the primary characters are very much alike. These are mostly older high-status men. The commonalities tend to be:

The deal guys are usually well-dressed, well-mannered and make an excellent overall first impression. On first encounter, they come out as friendly, sociable, and fun to be around. The same applies to their well-paid advisors, such as lawyers and accountants.
Our characters typically nurture a well-groomed ego, and are used to getting their own way on a regular basis. This doesn’t necessarily mean that they are pushy or aggressive. Not at all. It means that over the years in business, each of our characters has developed a skill set to extract attention, consent and collaboration from other people. It’s their secret power. They know how to take a horse to water and how to make the horse actually drink, so to speak.
A lot of dealmakers tend to be morally flexible. They would err on the side of bending the rules and bending the truth in the interest of making a deal happen.
They usually prioritize money over personal friendships. Their friendships tend to be highly transactional in and of themselves. Their loyalty is always conditional, with the sole condition being their own self-interest.
Good deal negotiators are usually masters of emotional incursions. In every deal, there are multiple pressure points which could cause the parties to break up negotiation. Well-timed emotional appeals salvage the negotiations and ultimately the deal itself.
They gaslight. They gaslight often, they gaslight a lot.

When you are in business or you work on deals, you are guaranteed to be exposed to gaslighting. The most pertinent question is how to recognize gaslighting quickly and how to effectively deal with it. My personal strategy is one of constant informed skepticism. I just assume that everything I am told by the deal parties is intended to advance someone’s agenda. In other words, my default MO (modus operandi) is to expect constant manipulation. It may seem as paranoia, but in a deal environment, this is pure pragmatism. In deals, people lie and deceive all the time. The gaslighting is constant. The most effective lies are the ones which are mixed with truths. The half-lies work best. How do we sort out the lies from the truths then? We don’t need to. We always do our own analysis and fact verification.  I aspire to learn as much as possible about the relationships and the motivations of the deal participants. If I represent the investors, I like to know very early in the process exactly how much money each of them is contributing. I like to know the source of their deal money. Is it their own cash, or is it family money, or is it borrowed money, or is it someone else’s money entirely? I like to know the relative impact of the deal on an investor’s personal wealth. When someone commits 20% of their net worth into a deal, compared to someone who commits only 1% of theirs, it makes for two completely different attitudes and two different level of emotional involvement. I like to know how the investors met each other. Who introduced them. How their mutual trust was built. This is the informed part of the analysis. The skepticism part is next. I am always skeptical that a deal will actually close. I am always skeptical that a deal which has closed will actually produce returns for the investors. I am always skeptical that the investors will be able to preserve their honeymoon relationship from the early days of the deal into the subsequent years. I am skeptical that the sellers are honest. I am skeptical that the other lawyers and accountants are qualified enough or that they even act in good faith. In other words, I question and examine everyone and everything which touches the deal. Being consistently skeptical allows me to see red flags even where none exist. It does produce a few false positives. But it makes me analyze whether there should be red flags. It makes me drill down into all areas of concern. It ultimately helps me deliver better advice to the clients. It also eliminates most of the gaslighting, both from my own clients and from the other parties.

Now that we identified a strategy to recognize gaslighting, we can discuss strategies for dealing with it. This is the harder part. Gaslighting is tightly woven into people’s personalities. If you try to call them out on it, you would be stabbing directly at their egos. And in business settings, egos tend to run big and wide. If you really breach someone’s ago, usually there is no turning back. It is a one-way road of indignation and resentment, leading to hostility and aggression. It is war. Instead of going up against the big egos, one very typical strategy is leapfrogging. In WWII, US admiral Chester Nimitz, a Texas native, came up with the leapfrogging strategy against Japan. Instead of attacking fortified Japanese positions, he would screen them off or block them, and island hop his forces to attack weaker points. In a transactional setting, whenever you identify a big, egotistical, gaslighting fortress of a person, you don’t necessarily need to take them down to advance the deal. You could consider isolating them and bypassing them, as long as there are other avenues of success. People who engage in gratuitous fighting, as many lawyers are inclined to do, are never good dealmakers. It doesn’t take talent to break a deal. When the passions are high and the interests mis-aligned, it is easy to convince a client to walk away from the negotiating table. The true skills of dealmakers show as ability to leapfrog the marginal difficulties and to do battle only when it counts most. Speaking in combat terms is slightly inaccurate. Deals take a lot of compromise and settlement. The ability to avoid conflict and find a compromise position is what makes deals happen. On and on.

All the while somewhere, gas lights keep burning dimly.