Mitzi Perdue

Family Quarrels & Mediation– Pull Back from the Brink

I hope you’re not reading this because you’re up against a family quarrel. The pain of a family quarrel can permeate every hour of every day.  The fallout has the potential of threatening everything we all hold dear: family relationships; the family business; our finances and legacy. If it’s a big enough quarrel, it threatens the workers, the lenders, customers and the entire community.

Growing up in the Sheraton family, we were taught to never take our problems to the press or to lawyers. Just as we were taught that murder is wrong, we were also taught that it was morally wrong to allow a family quarrel to escalate to the point where we’d go to the press or outside lawyers.

My parents must have intuited something that Drew Mendoza, Managing Principal of the Family Business Consulting Group observed, “In my 23 years of experience with 2400 clients, I’ve never seen even one family business that started down the road of litigation successfully pull back.”

Since there’s so much to lose when a family quarrel becomes public, is there a way of pulling back?

Hiring a Mediator

Professor David Hoffman from the Harvard Law School says instead of outright litigation, a family would do well to consider solving disputes through mediation.  This can sidestep a major danger for a family business if members are represented by their own lawyers

When family members hire their own lawyers, these lawyers may feel they serve their clients best through adversarial advocacy. The problem with this, according to Hoffman, is, “Adversarial lawyers usually evoke an adversarial response, and this can escalate the conflict.”

Selecting a mediator gives a family business a far better chance at de-escalation.  At its best, mediation can help both sides understand each other better. At it’s very best, mediation can help the participants grow as a family.

Bernard Kliska, Ph.D. is Drew Mendoza’s colleague at the Family Business Consulting Group, and he has strong views on the value of a mediator: “A mediated settlement has a better chance of soothing not just the business problem but also the troubled relationships that exacerbated it.”

The mediator can help the parties communicate and develop a mutually acceptable solution. In Kliska’s view, this kind of resolution has a good chance of being carried out. Having helped craft it, both sides own it and have a vested interest in making it work.

Characteristics of a good Mediator

David Hoffman recommends considering three characteristics when choosing a mediator:

• Does the candidate have experience with family business conflicts, and if so, how much experience? Are there lawyers or mediation participants who can vouch for the mediator’s skill in the family business arena?
• Chemistry. Hiring a mediator for a family business dispute is a bit like hiring a therapist or business adviser. Qualifications are usually not the deciding factor if the interpersonal connection does not feel right.
• Tenacity. In interviewing potential mediators one can ask about their experience in their most difficult cases.

Choosing a Mediator

Hoffman also recommends the following processes for choosing a mediator:

• Have the family members interview all the candidates. Then the family members decide together which lawyers to hire and whom they will represent. By interviewing and hiring lawyers in this unconventional way, family members can feel more confident that the tenor of the negotiations will not sink to the lowest common denominator of adversarial activity, and that all the lawyers support the family’s goal of an amicable settlement.
• Mediators can also be a good resource for lawyer referrals. They have seen numerous lawyers in action and can recommend those who have good track records for resolving conflicts constructively.
• The clients need to decide how involved they want their lawyers to be. In other words, will the lawyers attend every mediation session, or only a few that might involve legal issues. Will the lawyers be involved as consultants and not attending the mediation sessions?
• In some cases, one family member may feel that he/she wants to have his/her lawyer present. Other family members prefer not to have their lawyers present. This difference may be related to cost considerations or concern about levelling the playing field if one party feels less skillful as a negotiator. While there is no rule in mediation requiring all parties to have lawyers with them, if some do, it is essential that all participants in the mediation feel that they have the advice and support that they need to participate.

Go The Extra Mile

The stakes involved in a family business dispute are so enormous that it’s worth going the extra mile to avoid litigation that could rip the family apart for generations.   If you’re approaching the precipice of a public family dispute and litigation, there’s still time to pull back.  Using a mediator could be your last best hope.

Resources

Drew Mendoza and Bernard Kliska can be reached at the Family Business Consulting Group, 1.773.604.5005  or visit the website at: https://www.thefbcg.com . Mendoza’s email is: Mendoza@theFBCG.com, and Kliska’s is bkkliska@aol.com .

David A. Hoffman, Esq. can be reached at:  617-439-4700, ext. 201,  DHoffman@blc.law,    or visit the Boston Law Collaborative at https://blc.law .

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