Why do people form business partnerships? Some people do because they think that forming a partnership will spur creativity and promote innovation. Others pick a partner who has different strengths and weaknesses. And still others think it's more fun to work with someone else toward a common goal. Aren't two heads better than one? And: maybe partnerships are formed because people think that having a partner will allow greater risk taking.
It is inevitable that disputes will arise between business partners. Perhaps using business assets for personal use is acceptable to one partner but not the other. Is it ok to have your assistant who is paid out of the business account drive the soccer carpool after school? Maybe there is no set chain of command, authority and responsibility for each partner so certain tasks are not getting done and there is no accountabiity. Is there a workload imbalance so that one partner feels overworked meeting deadlines in the office while the other partner networks for business on the tennis court or the golf course? No matter what the cause of the dispute is, here is how a mediator can help to resolve disputes between business partners before and after they escalate:
1. The neutral mediator will sit down with both partners together at a table and explain that mediation is a confidential and voluntary process that empowers the parties to a dispute to resolve the dispute collaboratively. The mediator will also explain how the mediation process works, and the parties will sign an agreement to mediate indicating that they understand the process so that the mediation can begin.
2. One partner will go first and identify what the issues are from his or her perspective. The other partner will listen. The mediator will summarize what the first partner says. The second partner will then talk about what he or she sees as the issues from his or her perspective. The first partner will listen. The mediator will summarize and paraphrase. It is important to note that listening does not mean agreement. In addition, if a partner disagrees, or sees things differently, that does not mean he or she is lying or is wrong.
3. After the core issues are identified by both partners, there will be a thorough discussion of all of the issues, one issue at a time. The mediator will continue to summarize what the parties are saying, to facilitate communication, and to help each partner understand the other's perspective.. The parties will continue to listen to each other and to take turns speaking. The parties will eventually brainstorm and generate creative solutions to identified problems.
4. Often, it is helpful for the mediator to meet separately with each party. Each separate session is confidential unless the partner gives permission for the mediator to share some or all of the information discussed in private session.
5. Once the partners agree on which solution or solutions they would like to utilize to solve the identified problem or problems, the mediator will write up a detailed agreement that describes the mutually agreed upon solutions. Once signed, the agreement is binding.
What are the benefits of mediation over litigation? Mediation works to resolve business disputes! Mediation maintains confidentiality, gives the business partners control over the process and the outcome, is significantly less expensive, and preserves relationships between business partners!
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Ellice Halpern, J.D., is a Virginia Supreme Court certified general and family mediator.