If you're looking for an easy way to minimize your effort in balancing reputation and want to play the game more like one of the prior X titles, go to the section titled "Foelist Part 0: Explanation" and read the short version there for how to choose your enemies, no need to really understand the mechanics further. Otherwise, read on!

NOTE: THIS APPLIES TO VERSION 1.2 OF FARNHAM'S LEGACY, AND THINGS MAY WELL CHANGE IN FUTURE PATCHES.
Note it is possible there may be errors; if you come across a discrepancy between what's described here and what happens ingame, please post with a screenshot so as to help others ^.^

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DR = Dynamic Reputation
NR = Notoriety, used here as the linear measure of how much a faction likes the player. Notoriety is given as a reward for missions and various actions, and the actual number is not visible to the player. This is not to be confused with-
Rank = Rank is what the factions use to determine how to treat you, on a scale from -5 up to +10; higher ranks unlock the ability to purchase better ships and goods, low ranks will get you shot on sight.
The number of your rank is not quite the same as the number of 'pips' you have with that faction, displayed on the pilot status and diplomacy pages, because Rank 0 displays as one white pip. For example:

Here, Yaki and Duke's are at the maximally negative relation of Rank of -5 and 0% of the way to Rank -4, which is displayed as 4 red pips and 2 white pips; 6 negative pips correspond with Rank -5. The most positive relationship is with Paranid, which is tied with Split / Teladi / Strong Arms at Rank +8, but Paranid is the greatest among them at 79% of the way to Rank +9. Notice that Rank 8 has 6 green pips and 3 white pips; 9 positive pips corresponding to Rank +8.
Rep/Reputation = A general measure of how well a faction likes or dislikes you. Using this means I'm not specifically referring to either NR or Rank, so read something like "gain rep" as "gain notoriety" or "do missions for", etc.

It is important to note that while NR and Rank are related, they do not obey a linear scale. Instead, Rank is determined from player NR with a given faction by the following (approximate) table:


Note how there is a comparably small amount of NR change between ranks -2 and +4 (-1,000 to 1,000 NR) as compared to between ranks +4 and +5 (1,000 to 3,333 NR). The percentage displayed with each rank is how far you are from progressing to the next higher rank. For example, Rank 3/10% means you have 100 NR from Rank 3, as well as (333-100) * 0.10 = 23 NR from being 10% of the way to Rank 4, for a total of (about) 123 NR. Note you never really need to do this calculation, it's just given for understanding. Negatives work similarly; Rank -4/99% means the player needs only gain a small amount of NR to increase to Rank -3, while Rank -4/1% means the player is close to dropping to Rank -5 if they lose a small amount more.

In the game, Rank is required to unlock the ability to purchase higher quality ships, move into core sectors, etc. However, it is NR that is given by actions ingame, not ranks directly (with the exception of some plot stories that will set your rank to be a certain value, ignoring what it was before). The precise amount of NR is also difficult to predict, and not generally that important for the purposes of this guide/analysis. As a rule of thumb, more NR is gained by harder missions, when your rank is higher with that faction, and by doing more challenging things for that faction (trading larger quantities of goods, destroying larger ships that are intruding in that factions sectors, etc).

In this guide there will be places where there is something like "Consider gaining 100 NR with faction A, then 100 with faction B", etc. It's not actually feasible to gain a precise amount of NR with a given faction, but the idea is of an approximately equivalent amount; the statement is akin to "do one easy mission for faction A, then for B" when you have same ranks for both factions. The math is easier to explain and understand if you think of it in NR terms, essentially.

One important thing to note here: Agents are powerful when used to turn Influence directly into Notoriety for factions at higher Ranks, and the UI only shows how much is gained with a faction, not the corresponding loss with others. Same goes when doing a Hard or Very Hard mission for a high-ranked faction; you will gain much more NR for that faction, which means there will be a much larger shift for factions you have less total positive NR with due to the Dynamic Reputation implementation, described in the next section. Many complaints about the system ("they suddenly hate me!") are from doing a challenging mission or sending an Agent to a faction you are already higher Rank with than others. 20,000 NR isn't even a full rank up at Rank 7, however, 30% of that (6,000 points) is also enough in some cases to drop a faction from Rank 6 down to -3!

As opposed to earlier X3 titles, whenever reputation is gained with a given faction in FL, the reputation you have with other factions are modified as well based on their relationship to the faction you gain rep with. For instance, if you help deliver some Argon military personnel to the front lines of the Argon - Paranid conflict to gain reputation with the Argon faction, the Paranid won't like this and you'll lose some rep with them. However, you will also gain some rep with the Borons for helping out their ally!

Note that this applies regardless of the type of the mission: There is no difference between Station Construction missions and Personnel Transport or Taxi missions, with the exception of extra rep gained or lost in the course of a mission that involves combat. In this manner, it is highly important to pay attention to the assigning faction when missions are offered, as well as potential targets.

This is a mission being offered in Boron space, but the circled text indicates that the reward is for the Argon faction. Further, the target is Pirates, which means that altogether, there are three effects are in play:

1. The faction listed is Argon, which means primary notoriety increase for mission completion is given to Argon, with knock-on effects for other races according to basic DR rules.
   
2. Target is Pirates, which means there will be a larger than normal decrease in relation with that faction. Remember that losing NR with a faction (in this case Pirates) does not have a knock-on effect to gain NR with factions that dislike Pirates; the DR rules only apply to NR gained, not lost.
   
3. Because the mission is in Boron space (unless the target moves to a non-Boron sector), and there very well may be combat with Pirates, any pirates destroyed in Boron space (during the course of this mission or otherwise) will increase rep with Boron as well by a small amount because of the Boron-Pirate antagonism, with further knock on effects according to DR rules.

These DR interactions are more precisely given in the following table:
Each cell is the result of 1 unit of NR gained for the faction in the column. For example if you look at the column with Pirates, it shows that 100 Notoriety gained for Pirates causes the player to lose 30 NR with Argon and Boron, none with Goner or Split, gain 15 with Duke's, etc., in addition to the 100 gained for Pirates. The reason for explicitly labeled 0.00 in the Goner row is the asymmetry unique to that faction; the Goner don't care if you do missions for Pirates/Yaki/Duke's/Strong Arms, but those factions care if you do a mission for Goner.

This information can be found in a more general form in the ingame Encyclopedia. Factions can have Allies (+15% of NR gained also applied to these factions), Friends (+5% unless Argon-Goner, which is 10%), Hostiles (-15%), or Enemies (-30%). Of course, if there's no entry, they're neutral and don't care what happens.

This gets a section to its own, because it's less obvious: Alongside the other DR rules, dynamic upper limits have been added to faction relations. Being too friendly (at rank +8) with any faction will prevent you from gaining +8 with any other factions opposing it; you'll appear to be stuck at +7/98%.

For example, if you decide to snuggle up to, say, the Split and work your way up to +8 (or higher) relation with them, you will be unable to reach +8 with the Argon, Boron, OTAS, etc. This leads itself to a short list of which factions you can simultaneously become max rank with, shown below:
Using the same image from earlier:

The player here is Rank +8 with Paranid, Split, Teladi, and Strong Arms. Note the Boron at +7/98%; this is a cap beyond which Boron cannot be raised in the current situation. This player can only gain +8 or higher with the NMMC as well in the current set (item 5 in the above list), but can swap out Strong Arms for Goner without much difficulty (item 3).

Note it is relatively easy to switch between similar sets; one can lose ranks down from even +10/100% to +7/99% by, ahem, appropriating some large ships, followed by increasing your Rank from +7/98% to +10/1% via agents or whatever means with the desired factions.

Reading the Encyclopedia or just examining the earlier table for DR rules is not by itself sufficient to say which particular sets of factions can be all happily allied with the player or not. Consider the following simplified example:

Pretend there exists only 5 factions that are all foes with each other, such that 30% of NR gained by any one is applied as a malus to the other four. For example, if the only factions in this universe are Argon, Paranid, Pirates, Yaki, and Terran - all of these are enemies of each other. In such a scenario, consider a player attempting to befriend all of them by doing actions for one at a time such that 100 NR is gained to each faction, when they initially start at 0 NR with each.
First, 100 NR is given to Argon, which results in:
This is obviously no good though, so they move onto Paranid next, giving them 100 as well. This results in:
Argon and Paranid both have +70 due to the sum of +100 and -30, while the others have -60. Moving onto Pirates, giving them 100 as well results in:
The player is determined to press onward however, so they continue and provide 100 to Yaki:
However... the problem should now be visible. If they continue and give 100 to Terrans as well, look what the end result is, after investing 500 NR across these factions:
It's actually sum negative! This set of factions they've chosen to ally with is literally not possible; if you try to befriend too many factions they'll all hate you for trying. In this case, if they chose to ally with any set of 4 from those 5 however, it would have been possible; after investing 400 NR for instance, they've gained a net +40 among the four they invested, for a 10% return on investment. If they selected only 3 factions, investing 300 NR results in +120 net among targeted allies, for a 40% return on investment.

In this simple example, it's fairly easy to determine what set of allies are stable (any four or fewer) and what set are unstable (attempting to ally all five), but for the full set of all factions in the game, it's really not clear at all! Luckily, that's what this guide is for, to do the math for you.

Well, technically, I used an algorithm to walk through each of the 32,768 combinations (that hadn't been superseded) and test if they're sum positive or negative for all given factions by successively boosting the lowest one; if anyone knows how to do the linear algebra to solve for this type of problem analytically, by all means please share, but that's more math than I recall learning at college!

Edit: There's a good swing a a linear algebra solution here[forum.egosoft.com] by v_make!

- Short version:

1. Look through parts 1-4 of the Foelist below (only split into parts due to character count limitation of steam guides lol). Each line is a possible set of ENEMIES to have; choose one line from any section, go to your Global Commands and set those factions (plus Xenon) to "Enemy" as a reminder and have the rest as "Friend". The percentage is an "easiness" rating; low percentages are hard, high percentages are easier. Consider comparing vs the list of ALLIES that're uncapped in the DR Caps section above.
   
2. You can always add another faction as a foe to any entry in this list to make the process easier, but do NOT substitute one for another without looking for the entry in this list first.
   
3. Do missions and/or send agents to increase reputation with your friend you have the lowest reputation with. Do NOT do missions for a faction you are "Enemies" with, even if offered, and similarly avoid missions that "Target" one of your allied factions.
   
4. The first handful of missions may have you flipping back and forth between hostile/welcoming with some factions (especially if you start off as deep enemies with one faction or near neutral), but before long all of your friends should be fairly solidly positive. How long this takes depends on the percentage rating, again, lower will take much longer than higher, so beware.
   
5. Once you're high enough (recommend rank 4+ with lowest-ranked friend) play however you want amongst your allies, but remember to check your standing with your friends periodically, and repeat step 3 if you hear "Lost Recognition" for one of your allied factions, or just generally dip too low with any of your friends. Additionally, try to avoid sending a max-influence Agent for rep increase to factions you've the highest relative reputation with among your allies; Agents are can easily unbalance your relationships (though so long as it's with one of your friends, it will still be net positive, you just run the risk of tossing one or more friends into the negative ranks and/or making more work for yourself fixing it later).
   
6. Enjoy!

- Longer explanation:
In the simplified example from the previous section, it's clear that if you wish to ally with the most factions as possible, one must select one of Argon, Paranid, Pirate, Yaki, or Terran to be a foe. The following lists of foes are analogous to that, but for the full selection of 15 factions that are possible to interact with. As in the prior example, these are just those that are 'maximally efficient' for attaining as many allies as possible: For instance, the set of "Pirates - Terran - Yaki - TerraCorp" is not listed, because while it is a mathematically possible of foes to have such that the remainders can all be allied with, the set of foes including "Pirates - Terran - Yaki" is also possible, and has strictly fewer enemy factions than when TerraCorp is included (in fact, this set is the smallest number of foes one can have in a stable manner; read onto the Advanced section if you want to see how to be friendly with everyone, albeit in an unstable manner).

Similar to the previous example of the 5-faction universe, an efficiency percentage is included, which ranges from 30% to 0.4%. This rating is a measure of how much NR spent goes to actually raising your rank with each faction out of the total NR spent (as some will go toward offsetting the negative impact from raising NR with other factions). If a set you wish to use has a particularly low rating and you don't want to farm quite that much, there are two ways of making it easier. First, you can always have fewer factions as allies; even dropping a single Corporation will significantly increase the ease with which reputation raises for the other factions. Second, and related, is to take advantage of an effective 'negative cap' in DR. For more details see the advanced section at the end, but suffice to say if you temporarily treat one faction as a foe until you've maxed out the others before raising that one faction (or multiple factions), the first factions you ally with will raise considerably faster, at the tradeoff of causing you more headache from having more enemy factions for longer.

In any case, the actual Foelist has been broken up into several parts (only due to guide character limits, lol) and sorted by whether or not you want Argon and Boron as allies or not. Parts 1 and 2 (corresponding to an Allied Argon/Boron in Pt 1 which is recommended for newer players, and enemy Argon/Boron in Pt 2) are generally more effective than parts 3 and 4 in which one is allied and the other not. Why someone would want those... I'm not entirely sure, but they're included for completion's sake. Similarly Split and Paranid are recommended to take in pairs as they tend to be more effective together (not directly sorted by this though), but not by any means necessary.

To use this list, basically just scroll through and choose a set of enemies that you'd be fine plundering for loot opposing in the name of Peace or Patriarchy or Authoritarianism or what have you. You can then set that faction to "Foe" in the global commands across all your ships, and set the rest as "Friend" (except Xenon, unless you know something I don't). Of course, to actually raise reputation with these factions, there are still going to be internal conflicts, particularly if you have chosen a low-efficiency set. Toward that end, it's pretty strongly recommended to do missions or send Agents to your "Friend" faction that you have the lowest ranking with, or near to. This should prevent any friend factions from dipping into the negative after the first handful of missions; once the lowest-rank friend faction is around +4, you can let up and play more freeform, but remember to keep an eye out for rep losses; it can take a while to build back up if you let one slide too far away from the others, so it's definitely worth checking your pilot status page from time to time.

You definitely also want to stay away from needlessly losing reputation with your friend factions if you can help it, especially if you choose a particularly low-efficiency set or are still low in rank. This does lend itself occasionally to some useful outcomes; "Return abandoned ship" missions from factions you're opposing are basically nearly free money, for instance.

On the actual list itself, a handful of notable selections are highlighted for emphasis; these are just ones that work nicely or thematically. Other than that, scroll through and take your pick, then have fun!

#20 from this set plus Duke's and maybe OTAS or Strong Arms is recommended for new players, or those who want a simple time.

There are a few more things not yet touched upon:

- Lower DR Caps:
Somewhat analogous to the +8 upper cap of DR, there is a hidden 'lower cap'. When your NR is lower than -10,000 with a faction (Rank -4), any rep gains for that faction do not count toward the DR system. As a result, it's actually possible to be simultaneously friendly with all interactable factions.

Consider someone who gets to rank +8 with all factions aside from Pirates, Terran, and Yaki, then raises Pirates to -10,000 from wherever it was before (probably -1,000,000). Because of the lower cap, raising the rep from -1,000,000 to -10,000 should not reduce NR of any of the friendly factions. So, their rep should look something like like:
Now, they go and give 50,000 NR to Pirates. This results in:
Next, Terran is raised to -10,000 without repercussion, then given an additional 40,000:
Similar for Yaki, raised to -10,000 then given 30,000:
As a result, all factions are comfortably in the Rank 7 or 8 range. What's more, if some of the allies started at maxed rank 10 (1,000,000), then they'd only have lost 36,000 of 1,000,000, leaving them still well in Rank 10, if no longer at 100%.

However, it turns out there's a slightly more efficient method of doing this (as of 1.1). Presumably because the NR gain from Agents is calculated as one singular bump, using one to increase a faction's relation from the -10,000 value or lower causes no corresponding loss of NR with the other factions. Given how strong Agents are when the player has a negative rank with a faction, it is actually easier to first lower reputation with a faction down to Rank -4/99%, then send an agent to convert 1,000 influence into NR with the faction rather than increase reputation through missions or using agents when slightly positive; this applies regardless of the number of factions one is trying to ally. Really, it basically sidesteps the entire DR system. I would consider this an exploit and it will probably get fixed at some point, but should work in 1.1.

Regardless of the method chosen to exceed one of the above-listed sets of allies, once done so, the situation is not quite stable. As the player continues to Trade and Fight, reputation will change and some will begin to fall. Each time the lowest rep faction is bumped up, overall, reputation will be lost until - eventually - the factions will be closer to neutral, and the process must be repeated. How long this will take in practice however... well, it will probably be quite some time. If anyone actually goes through and does this, please report back how it goes; this is just theory, here!

- Goner Asymmetry
Unlike other factions, the Goner dislike others, yet are not disliked in turn. This means it's possible that, depending on how the upper cap is implemented, it may be possible to be rank 10 with the Goners and one of their enemies at the same time, IF one is raised before the other (which implies that no matter which set you select in the DR Cap section, Goner is actually always an option). It may be the case that raising Goner to rank 10 first will not disallow Pirates (say) from raising to rank 10, but raising Pirates to 10 first will disallow Goner moving past 8. This requires testing!

Many thanks the Developers of this game, in particular Cycrow who took the time to clarify a number of the internal[forum.egosoft.com] mechanics[forum.egosoft.com] on Egosoft Forums.

Additional thanks to users HathKull[forum.egosoft.com], chip56[forum.egosoft.com], Wou[forum.egosoft.com], and Drone_101[forum.egosoft.com] for info and discussion.