The business of art occurs when passion meets commerce. This has been around for a long time and is present in each civilization that has ever been recorded. Filippo Petteni, a Consultant at Forsters, specializes in handling cases that involve dispute. In this episode, Filippo talks about the importance that the creative process has on the lives of people, especially during times of distress. He discusses the art business in general and explains how the value of an art piece is determined. As a lawyer who handles art disputes, he shares his experiences in dealing with disputes on an international level. Also, learn how you can keep yourself connected to the wonders and value that art brings to the world.
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The Art of Negotiation – When Passion Meets Commerce with Filippo Petteni
Part of “The Relationship between Business and Art”
I am delighted to welcome my friend Filippo Petteni. He is an art lawyer but he’s a lot more than that. He’s an advisor. He’s originally an Italian based in London, working internationally. The official bio is that his main focus and background is dealing with high value commercial and multiparty litigation matters and art law, which is an area that he’s practiced for many years. He covers contentious and non-contentious work where he advises galleries, artists, collectors, auction houses, and other professionals within the art market. That means that you deal with them when they’re happy to talk to you and you would deal with them when they’re fighting. He also regularly deals with art-based litigation and has handled a number of high-profile disputes concerning authenticity both in and out of the court. He is a nexus between the legal world, the business world, and the art world connecting and bridging the gap and the divide. Filippo, I’m happy to have you here.
It’s great to be here.
Before we get into high-stakes negotiation and so forth, the question I ask all my guests is, if you were to have a dream interview with someone who’s no longer with us, who would you interview? What would you ask them and who should be listening?
It would be within the arts fair. It would be one of the twentieth century’s foremost art historians, Ernst Gombrich. He was Austrian-born and immigrated to the UK with The Warburg Institute in the 1930s. He was immensely influential at that time in shaping this transition between a connoisseurship type approach to arts that what we’d recognize as more modern approach to the history of arts. He wrote specifically about perception in the context of art, how we view art, how we perceive it, and the progress of art. He is probably better known, this is why I chose him, for having written a book called The Story Of Art, which has the great credit of popularizing and rendering accessible subject mass of it. For many, it was considered elitist or non-accessible.
That’s how I encountered him as a teenager at thirteen. It was the first time I read the book. It altered the way I related to art and the way I saw it. Probably, a better way of now we’d probably look at that book and instead of calling it The Story Of Art, we might rename it A Story Of Art because it’s certainly Eurocentric in its approach. It was written by a white male for a predominantly white male audience. Women don’t have a huge scope in this book. Asian art or African art, which has its own multitude of histories that are as rich as a Western tradition, aren’t included in it. He was a fascinating individual, immensely erudite and learned. The question I’d ask him would be, “Why is art important for us all?” I would hope that politicians and children would be listening because now more than ever, having a creative outlet and an understanding of a creative process is something that’s critical for us. I would love to interview him.
I grew up in a family where my grandmother was an artist and very interested in art. We are totally Eurocentric though. That was important. I learned about art from her and from my family, somewhat in school, but not so much. When you’re growing up in Italy, how much do they teach you about the famous art that the rest of us traveled to Italy to go and see?Now more than ever, having a creative outlet and understanding the creative process is something that's critical for us. Click To Tweet
When I was in Italy, I was in British schools because I grew up between Italy, UK and France to a certain degree. The Italian system historically, there was a great focus on art but taught in a particular way. I wouldn’t say it’s a contemporary view of how art history should be approached. It’s also something that’s easily relatable. You walk out of school as a teenager, perhaps your teacher has spoken to you about Renaissance architecture on that particular day, and you might notice it as you’re walking past a building. In my case, I was fortunate enough to grow up in a family that appreciated art. My grandfather was a collector and I was brought in and educated by him to a certain degree.
I always tell this story that when I lived in London in my teens, he would have me go and pick up auction catalogs from Sotheby’s or Christie’s. When I visit him in Italy, I would come armed with these catalogs and we talk about certain works of art. I’d say, “You should buy this,” not knowing anything about the prices or what his interests were. I found out years later that he would receive all of those catalogs by post in any case. It was definitely a rather sneaky way of wanting me to be exposed to that world.
As we’re talking about auction houses and catalogs, there’s always been a business aspect to it. About Michaelangelo needing to get money from the Pope in order to paint the Sistine Chapel. It was Michaelangelo who was committed to painting that. It could have been somebody else. He would have had to fight to get that commission and then lived off of it.
It was an interesting relationship at that time and there’s always been business in art. The art business is a more recent phenomenon. The art business as we know it, as would recognize it. Looking about relationship of patronage that would have existed with workshops at the time of Michelangelo, that’s very different from the development, the key steps which have led to the business of art as we see it now, which essentially the creation of academies for the study of art, museums, and then the establishment of dealers. That process took a couple of hundreds of years to come to fruition and leads to the fledgling market that we would almost recognize. We’re looking at 40 to 50 years for something that is high stakes and big numbers. Since the ‘70s, it’s something that’s more akin to what we’re seeing now and who knows what it will be post-COVID.
The theme of this series is the relationship between business and art. I was thinking that negotiating the sale of a Picasso would be similar to a merger and acquisition between two companies. How do you approach high stakes negotiation like that? Some of it has to do clearly with how you establish value. That’s where the dealers come in.
There’s a complex way of establishing value on one hand. On the other words, it’s simple. The value is what someone’s prepared to pay for a particular piece. It is idiosyncratic. There is business within the art world and there are very high figures involved. There’s a big sale at Christie’s where there were paintings that were sold in excess of $40 million. The numbers are where the similarity stops because you’re looking at an industry that is relatively unregulated compared to business, compared to the universe within which merges and acquisitions would take place. There’s almost a standardized procedure that’s followed when the merger takes place, there are data rooms, there’s information gathering and sharing, and all of that is largely missing from an outworld transaction. What’s at the forefront of that reality is an individual who wants a piece. Aside from the numeric value, that’s where the similarities stalled, but there are lessons to be learned from an art.
For someone who’s not dealing with a $40 million painting, what could we learn from the negotiation and the sales that you help facilitate or you help put together?
The fundamental aspect is information gathering, and that is common with the process that you would go through in a merger or an acquisition. If you’re buying anything that has a value to it, you should do your homework. You should do your research. You should ask questions about the provenance and the condition. You should see where it’s been exhibited if we’re talking about art there. Does it form part of the catalogue raisonné of the particular artist or the Bible that encapsulates all of the work of a given artist? Secondly, know your limits. Set in advance of the negotiation the conditions which you’re not prepared to deviate from.
While flexibility is fundamental in negotiations, there has to be a point particularly in something that is a passion asset where logic, business sense, and reason often are far away from the negotiations themselves. Set limits and criteria, “Beyond this price I’m not prepared to go,” understand how and why that price was set. That’s easier in gallery sales or when looking at auction sales. There’s little data that’s publicly available aside from auction sales. Ask a dealer why has it come to that price. As an adjunct to do your research, understand the triggers, the needs and wants of those involved in the negotiations. It is key for negotiations where individuals are concerned rather than a commercial.
How would we apply these lessons to a personal negotiation such as negotiating a raise or your incoming salary if you’re coming into a new company? I was going to ask this as a separate question but I think this is all part of it is emotion. You called it a passion project or passion asset. How do we keep the emotion play a part? How do we think about that? What can we learn about that from selling a Picasso?
There’s a famous adage that art sales occur when death, divorce or taxes are involved. That’s clearly not the only set of circumstances, but sales often occur in contexts that are charged with a whole series of other things. Some of what I said certainly applies. Remove some of that emotion or give a context to that emotion. Do the research, the knowing, and understanding the pricing and some of the drivers that help understand or inform the framework within which the negotiation takes place.
The whole perception of value must play a huge part.Do your research, have a clear idea of what your objective is, and have flexibility within that process. Click To Tweet
It does. For some people, a particular Picasso has a huge value. For others, it has zero value. A particular Picasso is different from another Picasso. Picasso is an interesting artist in that respect. He was immensely prolific and went through a whole series of different periods. Some of which are the art markets has decided it has particular value. The academic community and the art historic community has assigned different value to different periods. That often happens. They’re not always directly correlated and those values change but entering those negotiations which is asymmetrical from an informational standpoint.
You don’t often know why a person is selling. You often don’t know unless you’re buying directly from an individual who is selling a work, which almost never happens. There are vacuums within which these negotiations take place. A lot of those aspects do apply to negotiation in respect to the salary or something that is more day-to-day in the world that we all encounter. Do your research, have a clear idea of what your objective is, have flexibility within that process, but know your worth. Know the value of what it is that you are transacting for yourself. That’s the most important thing.
Most of the time, when I’m doing a presentation, I’m often presenting to get someone to hire me. That is an enrollment conversation if not a specific sales conversation. I’m selling myself. You get into the whole mental images and all those voices in the back of your head that are going. That would be a place where emotion comes in. I always think that if you focus on the other person and what they’re looking for and why they want it, that must also play a part.
The greatest barrier to negotiations is the barriers we create for ourselves. That’s a general consideration in life that I’ve found as I’ve gotten older. We’re afraid of how we’re perceived and how people will react. If we dig deeper, that fear is a fear of the emotions that we have in respect of those events. We’re afraid to feel embarrassed and vulnerable in a particular condition. A significant amount of introspection needs to occur before those negotiations and that’s part of what’s important. It can take the form of journaling or a pep talk or practice and rehearsal in front of the mirror tied to, “Why am I so fearful of asking for more or for what my worth is? Why do I feel not at ease of letting other people know my value and my worth?” All of those things are self-imposed rather than from an external source.
That makes me think about what happens when you’re working with living artists and they’re selling their baby, or the living artist is involved in someone else’s sale of their child. I’m thinking about how this compares to founders who created a company and inventors who’ve invented a product, and then you have to deal with the negotiations of getting investors or selling it.
It varies hugely from artist to artist. For some artists, they’ve produced the work. They don’t want to see it again. They don’t want to think about it. They’ve moved on in the moment. They see it as a creative journey and a stepping stone process. It has an importance to them for a particular moment as that creativity was developing in a particular way. For others, they’ll never let a painting go or a business. That step is quite a challenging one. A degree of understanding empathy and sensibility of that process is critical on our part. That generally doesn’t happen. This is a generalization, but they also approach things with a higher comfort level in respect to creativity. They used to be creative. In a way, they might not feel incredibly comfortable with it, but certainly I would say more than the majority of management.
They’re accustomed to being creative.
The artists put themselves out there. They pour their thoughts, hearts, emotions, music on canvas with an ultimate view of it being seen by others and perhaps appreciates it. That’s an interesting process and it’s quite a vulnerable process in a way. That’s not a process of the business world or the legal world. It’s used to appreciate in particularly.
The startup world does though.
The rest of the world has a lot to learn from both the artistic world and the startup world. Creativity certainly does have a place in business. It does have a place in the world, and most successful lawyers or individuals in business are open to that and appreciate the creative process. It’s important to bridge that gap or that divide.
This makes me think as you have an international life and international career, and this is an international show, when you’re approaching a deal or negotiation or something, how much do you take the national origin and mindsets of the participants into account. Working with the Italians has got to be different from working with the Germans or the Japanese.
It’s fundamental. That cultural specificity or relativism is what informs greatly how negotiations are carried out. In the UK when approaching a lawyer, the lawyer will constantly seek instructions from the clients. They will revert to the client saying, “These are the choices. These are the pros and cons of each option. We advise you to follow this path or take this decision,” but the decision is in the clients. In Italy, a client will approach a law firm with a problem, and then perhaps not speak to the law firm for some considerable time. As a law firm, it goes about in its business and the expectation is that the law firm will resolve the issues.The rest of the world has a lot to learn, from both the artistic world and the startup world. Click To Tweet
It’s a rather high expectation in a sense, but the law firm will resolve the issue for the client. British lawyers will often revert to the client when dealing with Italian clients. They also have an obligation to take instructions from the client. That’s very difficult for an Italian client to understand and appreciate. They could see that as, “You are the lawyer, why are you asking me?” Without understanding the cultural and practical differences that exist in these different realities, negotiations, discussions, or confidence within these relationships can come to a grinding halt. It’s immensely important. The presumption of understanding or awareness of different cultural contexts is something that we need to remove from the equation. If we’re working with people in Japan, then it’s important for us to have and leverage the resources of someone that has an understanding of that context.
A commonality can be found in approach. Often there’s a negotiation about how the negotiation takes place, which is more important than the negotiation itself or just as important parts of the negotiation. It’s intrinsically tied and it can’t be ignored. Things stop very quickly unless a significant amount of focus is placed on understanding the position of the other individual. It’s no different from measuring and evaluating the negotiating position, needs and wants of the counterparty in a negotiation. It’s a part of the picture.
It’s always you’re making it about them. It’s what I’ve been saying over and over again. You were talking about the work you’re doing as an advisor and how you’re helping people who’ve maybe been the victims of the so-called experts. When somebody says, “You have to buy this because it’s so and so. I’m the expert and I’m telling you that,” what’s the fun part for you? What makes you light up?
I love art. I love being surrounded by art. I love looking at art. That’s not unique. All of us live in houses, apartments, rooms that have something on our walls. We’ve had images on walls for thousands of years before we were writing. We find ourselves in this skewed context where for those that are fortunate enough to have a roof over their heads. They aren’t dealing with food insecurity or who have employments. There are lots of people who aren’t in those conditions. We have art all around us. We have images all around us. Now more than ever, it’s a visual reality that we inhabit. We’re bombarded by a sense of the importance of the image and yet on one hand, something that’s all pervasive but also gives us great joy and pleasure in any context.
There is a reason why we all put up a poster or a painting in our living room. We like to look into this. We also want people to see it and it has through history been a fundamental piece of “This is what I am and who I am” aspect of communication. The language and the market that surrounds the purchasing of art is something that is in many cases quite intimidating for a lot of people. First, helping people understand what it is that they like and that it’s okay for them to like all different things. We shouldn’t just like what one of the top five mega galleries are telling us we should like. They’re not telling all of us. They’re informing a particular clientele that can afford those works and that can work with those artists in a particular way.
That leads to how an artist is seen by many. It’s not a purchase that’s carried out every day. Often art is for those that are fortunate enough that had art given to them or passed down within families. That’s how they acquire art. There’s something unnerving or unsettling for many about stepping through the doors of a gallery and asking questions. The majority of the gallery owners don’t necessarily want that. They want people to be involved. Now more than ever, they desperately want people to visit their galleries, to ask them questions, to speak to them, and to engage in that process. Many are inhibited or feel uncomfortable. The work that I’m able to do with either fledgling collectors or purchases at a
If I’m able to help someone understand that they like Pacific Northwest landscapes. The reason why they like those works is because they remember growing up in a house. There was a particular experience where one of these works was involved and they like the feeling that these works give them. I am able to enhance the comfort level that they have with that understanding. My greatest wish is to them having an interest or a passion that will stay with them and that they will develop over time. I find that more rewarding than some of the big tickets work that I’ve been involved in.
There’s an old saying that, “The more you work in the bowels of something and in the nitty-gritty of something, the less you appreciate the actual product.” Is there a time you can think of where you walked into a room or someone’s home, or saw something and you were taken away by the beauty of it? You’re absolutely jolted out of your every day and transport it.
It does happen. We have to be open to that experience and to that mindset. It hasn’t always been that way for me. There have been plenty of times where I’ve been working on a particular dispute maybe that involved a number of works or a collection in the past. There have been circumstances where some of those pieces have never even looked at. It was a painting that was in dispute rather than a painting by X or Y which had these particular characteristics. Fortunately, I’ve evolved and I find that important from the point of view of what I need.
How do we keep ourselves connected to the wonder of it all?
Making a conscious effort and a point of seeking that wonder. It’s difficult for it to occur if we’re not open to it or not thinking about it. I make it a point of whatever city I’m in, often the diary is busy, I will always carve out time to walk for a certain time through the city and go to a museum or a gallery at least one. I was in Chicago and I went to the Art Institute there. It was a beautiful sunny day. I went looking for something and I found so much more. There were paintings that I’d forgotten were even there. I was turning into a room, seeing and being surprised both by the presence of a particular work, but then feeling the impact of that work, seeing and appreciating its technique or it’s something that can be moving, but we have to go and look for it.
Reminding ourselves to look for the marvels around what we do. Filippo Petteni, thank you for being part of the show. It’s been a delight to get to know you and hear your thoughts about a world that I’m not part of. I’ve enjoyed it.
It’s my pleasure.
- The Story Of Art
About Filippo Petteni
Filippo’s main focus and background is in dealing with high value commercial and multiparty litigation matters and art law, an area in which he has practiced for over 15 years.
Filippo covers both contentious and non-contentious work where he advises galleries, artists, collectors, auction houses and other professionals within the art market.
He regularly deals with art-based litigation and has handled a number of high-profile disputes concerning authenticity both in and out of court.