Thinking about using mediation to resolve your employment dispute without going through litigation first?

Recently I got a call from a small business employer. He knew I was an employment lawyer and that I represent small, closely-held or family businesses and that I was also a mediator handling all kinds of business, workplace or community disputes. He had received a letter from a lawyer representing one of his employees alleging sexual harassment in the workplace. He wanted to try to resolve it fairly quickly and asked if he could achieve that using mediation.

He told me that both employees involved were good people and valued employees. He had been through litigation before, and felt that prolonged litigation of this matter would not be good for the company. It would be damaging to the workplace environment and undoubtedly have an adverse impact on all the relationships involved. It was important to him that his company had a healthy workplace. He truly cared about his company and all those working there.

The employer, who owned the company, said that he had contacted an employment litigation firm and discussed the matter with one of their partners. The partner explained that the time for mediation would likely come later, after the case was developed further through the litigation process. But they would have to do some “discovery” first, i.e. that the parties would have to exchange information to know more about the facts in the case. He also said that there would possibly be a need to make some “motions to the court”, which he explained as written requests for the judge to decide and rule on certain matters within the dispute. Then, the litigator continued to explain, after those things were done, they would be in a better position to decide whether mediation or trial would be a better course of action. But most likely, the case would settle.

When the employer asked him how long the litigation would take and what it would cost, the litigator hesitated and was somewhat vague in his response. The lawyer said it would depend on factors beyond their control, but it could take two to three years and the legal fees could easily reach $50,000 – $100,000, and maybe more, depending on if and when it settled.

The employer asked me whether there was a way to mediate and settle the case without going through the litigation process. He was concerned about the negative impact of this process. He also wondered if this litigation process would be able to address the problem and provide solutions like improving the situation in a way that would result in a workplace environment that was better than the one that triggered this complaint.

I acknowledged his valid concerns and his goal. I also confirmed most of what the litigator had told him about costs and time and the need to exchange any relevant information about the dispute. But I suggested that there are other ways to accomplish this information exchange. I suggested that he have a process assessment done, which would provide valuable information so that he could make an informed decision on which process to use for his dispute. That assessment step would also provide a recommendation on whether early mediation was the best approach to his dispute, or whether other ways, including litigation, arbitration, collaborative law or using an ombudsman would be more appropriate for his specific dispute circumstances.

One of the things we would find out very quickly through this assessment was whether both sides were open, willing and able to exchange all relevant information in good faith about the facts in dispute right away. That would tell us whether he really needed the prolonged discovery process of litigation or whether some more streamlined information exchange could be implemented. This was a key factor in whether the options of early mediation or collaborative law were open as good, viable options to him.

I also suggested to him that he as employer and more so the employee in question may not yet be emotionally ready to focus on resolving the matter. There may be a need to engage in the conflict a bit more, and they could use a structured process that accomplished that productively, and then move on to discussions about resolving the matter. I further advised him to ask the employee’s lawyer if they would also be willing to participate in this process assessment. If one or both parties to the dispute did this, then the parties would be able to make an informed decision about which way to go. This assessment and a good decision on process would impact thousands of dollars and much of his time, energy and resources over the next couple of years.

In assessing the situation, several factors that made the dispute a good candidate for early mediation:

  • Both sides wanted to maintain confidentiality and keep the matter and the process of resolving it private;
  • Both employees involved had very strong work ethics and both liked the company and wanted to stay with the company;
  • Both employees involved thought quite highly of each other professionally, wanted to maintain a healthy working relationship and did not want to adversely impact the other professionally;
  • They both wanted to address the harassment issue openly and transparently, not avoid it, and then, once it was addressed productively, get back to work as soon as possible;
  • Neither employee – both young people in their early thirties – could fathom, never mind participate in, a process that would take two or three years to resolve. They both said that their lives and situations would likely be in a totally different place by then;
  • They both were type A entrepreneurial types and wanted to maintain control over the process and the outcome.

Once the employer and the employee assessed and learned more about their situation, they could make a clear choice of a process that was a good fit, one of which was early mediation. The assessment also gave them good insights about what kind of mediator to hire for this case and laid the groundwork for the rules of engagement needed for their specific case. With this “realignment”, both parties were on their way to a good outcome.

Photo Credit: Simon Blackley License

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The Time for Dispute Resolution Alternatives (DRA) has come

There was a time, not long ago, when those who found themselves in a dispute had two basic choices:  They could either file a lawsuit/initiate some formal complaint process or they could just walk away from the conflict and try to move on. This essentially amounted to what professionals refer to as the typical default responses of most people – “fight or flight”.

Businesses began to promote the use of arbitration as an alternative to litigation in business disputes, but that was still a fight or flight option. For many people, the choice was either to let it go and move on or get embroiled in a lawsuit for many years and at a crippling cost.  Just this week, I mediated a relatively basic case – a dispute about a parking space – that had been going on for five years! Fast forward to today.

Over the last month, four annual workshops, forums or symposiums were held by Massachusetts organizations that promote the use of dispute resolution alternatives (DRA) and help educate the public, lawyers, professional experts and neutral facilitators, coaches, mediators and ombudsmen about the value of these approaches. These programs were in addition to several other shorter training and education programs that these organizations offer throughout the year. These groups include the New England Association for Conflict Resolution (NE-ACR), the Massachusetts Collaborative Law Council (MCLC), the Massachusetts Bar Association’s Dispute Resolution Section (MBA DR Section) and the Massachusetts Council on Family Mediation (MCFM).

These events extended beyond the two best-known dispute resolution processes of mediation and arbitration, and included collaborative law, ombuds services, restorative justice, conciliation, structured negotiation and early neutral evaluation.  Speakers provided useful information on how these processes work and when they can be used. They also stressed the vital need to first assess or triage each dispute before choosing a course of action and to have the flexibility and openness to design hybrid processes that are more responsive and tailored to the type of conflicts and the specific situation that each kind of dispute presents.  We sometimes refer to these as dispute resolution alternatives (DRA).

I don’t have all their statistics on membership of these groups, but here are two indications of growth of the field of dispute resolution alternatives.  (1) The newest of these groups – the MBA DR Section – is in its second year and already has over 500 members. The MCLC began in 1999 and has since trained nearly 1000 lawyers, experts and facilitators in the process of Collaborative Law. The growth of these statewide organizations, as well as other national and international groups and the expansion or trainings, workshops and law school courses on these subjects reflect the rising trend in the use of these approaches to resolving disputes.

In the early 1980s, mediation began to be used and discussed more as another option, one that was not only an alternative to lawsuits and litigation but also an alternative to fight or flight. Mediation, and the other non-adversarial approaches referred to above that developed after it, are different in four significant ways:

  1. They are processes in which the parties have more control over both the process and the decision making as to the outcome;
  2. They are non-adversarial in nature and call for more of a collaboration of professionals and clients;
  3. They are flexible, creative and agile processes that are not limited by rigid court or arbitration procedures and can be tailored to the situation, resulting in solution options that are more responsive to the interests and needs of the parties;
  4. They are more time and cost-effective than either litigation or arbitration and avoid much of the collateral damage – draining of resources, emotions and energies.

Today, people in disputes have a third option that is not fight or flight. Stephen Covey refers to this option as the “3rd Alternative” in his book, The Third Alternative. Covey devotes a chapter to using this third way in the law to resolve conflicts. Buddhists might refer to this option as the “Middle Way”.  More and more people, as well as lawyers and conflict resolution advocates and mediators, are seeking and finding dispute resolution options that are better suited for their type of dispute and their circumstances than either suing or walking away.

There is a growing need for DRA today and more clients are seeking them. There is a growing number of lawyers and DRA professionals trained in these processes, expanding the field and ready to help people resolve disputes more efficiently and avoiding a potentially damaging adversarial process. It’s time to connect the need for DRA with those lawyers and professionals who approach resolving disputes this way.

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Why I believe in Dispute Resolution Alternatives

I believe in the value of Dispute Resolution Alternatives (DRA) for clients that are in disputes. I believe in them because I have used them, seen them work well, and because they make so much sense. I believe in them because they are not adversarial by nature. They do not divide, separate and drive people apart; instead they work to bring people together, reconnect and restore a good situation. I believe in them because they are built on the premise that when people – clients, lawyers, neutral facilitators, mediators and experts – intentionally and by design collaborate in good faith toward finding a good solution, they will find a better resolution than when they fight each other until one side loses.

I’d like to share with you how and why I evolved to this view of how to resolve disputes and the value of alternative ways of doing so:

After 11 years of government service litigating for the County Attorney’s Office (Westchester, NY) and the NY Attorney General’s office, I moved home to Massachusetts and into private practice in 2001. I enjoyed government work – trying many cases, strategizing in litigation, writing and arguing motion. I was fortunate to work on all kinds of truly interesting and meaningful matters – child abuse, civil rights, environmental, negligence, employment, labor, consumer protection and discrimination. One cumbersome part of litigation – discovery – was not enjoyable. Discovery was increasingly overused, inefficient and unnecessarily drained our clients’ resources, energies, time and money. I am not a big fan of inefficiency or needlessly draining clients’ resources.

Government service also gave me the chance to work with outstanding public servants at many levels – problem solvers working for the greater good. When I went into private practice, many of our clients were and still are small, closely-held or family businesses, mission-based organizations, families and individuals.

When I started representing our private clients as a litigator, as much as I liked trying cases, I soon realized three things: (1) the opportunities to try cases were far less in private practice than in government work (less than 3% of cases that are filed with courts go to trial); (2) discovery is still overused, inefficient by nature and a largely unnecessary drain of clients’ time, money, resources, energies and emotions; and (3) litigation has a devastating impact on most small business and non-profit clients. It can cripple them, destroy important business and family relationships and drain resources. It also fails to provide clients the flexibility, efficiency and creativity needed to reach the best resolution, one that satisfies most, if not all, of their interests.

These factors motivated me to seek better ways to serve our clients when litigation was not a good fit for their situation. If we lawyers are going to best serve our clients, we need to know about and provide other ways to resolve disputes and advise clients accordingly to ensure that they use the right approach for their specific circumstances. For that reason, I trained in Mediation, Collaborative Law, Ombuds Services and Conciliation, and we incorporated these into the approaches and process options we offer to clients.

These trainings were eye openers on many levels. They uncovered the critical importance of counseling our clients on the dispute resolution alternatives (“DRA”) available so they can make a well-informed choice of which DRA process is right for them. The approach we take with our client from the outset of the dispute must be guided first and foremost by what is in our client’s best interests. It is up to us as lawyers to temper and balance our clients when their emotional desires are driving them toward a course of action that won’t serve them well. There is a time and a place for litigation, for arbitration, for mediation, for collaborative law and for ombuds work. One of our responsibilities is to make sure our clients use the right approach. The late Frank Sander, a professor at Harvard Law School and a luminary in the field of dispute resolution, recently honored by the Massachusetts Bar Association for his incredible body of work, helped coin a phrase for this vital task: “Fitting the forum to the fuss”.

The value of our clients choosing the right DRA for their situation can be measured by the thousands of dollars in legal fees saved, months and years of their time saved, keeping things that need to be confidential private, preventing the draining of their emotions, resources and energies and preserving important business, organizational or family relationships. The right approach also avoids the opportunity costs of choosing the wrong process. Most thoughtful clients wisely choose a lawyer who has expertise in the area of law in which their dispute falls, but they are not equally careful about choosing the right DRA for their situation. By navigating that choice with our clients, lawyers provide them great value.

As a trial lawyer, Abraham Lincoln discouraged litigation and encouraged settlement, pointing out that the nominal winner in litigation is often a real loser in fees, costs and lost opportunities. I believe in DRA because they give lawyers the opportunity to work with our clients to do our best and most creative work and together achieve our highest good. Acting on these beliefs, Dispute Resolution Counsel, LLC does not use adversarial approaches to disputes, and encourages its clients to first go through the vital process assessment step and consider all DRA carefully before choosing a lawyer and deciding on a course of action.

In the series of blog posts that follows this article, I’ll elaborate on the value of some of these DRA – Early Mediation, Collaborative Law, Settlement Counsel and Ombuds work – gives to clients and people that use these approaches. This is not an attempt to evangelize clients or lawyers that any one of these is the best, or better than any other. What determines which process is better and right is the specific dispute situation for which it is being considered.

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It’s our choice: Are we agents of connecting and reuniting or separating and dividing?

In the past few months, a recurring idea has kept surfacing, either in the news or in my life experiences as a mediator and lawyer. It’s the tendency toward division, of focusing and acting more on our differences than on what we have in common. Our lives today are influenced more by partisan and separatist views than the spirit of unity and connectedness. It seems we’ve lost the desire to sit down together and exchange differences of opinion respectfully, with an eye toward understanding another point of view and a willingness to accept a different opinion, maybe even adjust our thinking. Here are some examples:

Recently there was a news story about a shop owner who initiated a policy of not allowing anyone who supported President Trump to come into his store. He even put a sign up in his window stating it. Decades ago, shop owners similarly posted signs not allowing certain races or ethnic groups. We look at those episodes in our past with embarrassment while we are repeating that history.

A state representative in Minnesota was recently upset by an action taken by an actor playing a bachelor on the TV show The Bachelor. It seems the bachelor proposed engagement to a female contestant and then decided he was not going to marry her. The state representative tweeted that if he received enough supportive “retweets”, he would introduce a bill seeking to ban the actor for coming into Minnesota. In a very short time, he received over 10,000 retweets.

President Trump may have some good ideas. One that I strongly agree with are term limits for Congressmen, something that is long overdue and something that reflects the intention of the Founding Fathers. But generally, his statements and written comments may be perceived by some as divisive and intent on dividing people into an “us vs. them” mentality. In this way, his statements can sometimes do more harm than good and result in some of his better ideas going unnoticed. His stated goal of “making America great” is a good goal; making America hate is not.

When a Senate majority leader takes a position of voting against things because of who or which side proposed them – even while admitting that those same things would be good for the nation – he is not only committing treason, he is urging that being partisan and divided is more important than the well-being and interests of those who elected him (too many times) to serve them. BTW, the House minority leader is no different and no better. They both, along with their party partisans, promote this counter-productive mentality of “if they proposed it, we’re against it.”

As mediators and lawyers, we sadly see this same spirit of division in people who come to us to help them resolve disputes. We are agents of restoring order, peace, stability and agreement to a situation. But we are operating in a society that is steadily moving in the opposite direction, sucked in by the temptress that feeds the desire to beat the other side at all costs rather than solve the problem.

Why is dividing into opposing sides and drawing battle lines so attractive and appealing to us in this country? Why is focusing on our differences and acting on them – to the overall detriment of the whole – so prevalent today? Is it just easier, more entertaining, or more appealing to our emotions to focus on the negative, divide and fight with each other? What has happened to the ideal and goal of working together to become our highest and best selves? To the brotherhood of all men (and women)? To the notion that my collaborative lawyer colleagues from Texas promote – that a rising tide helps all the boats.

I don’t know the answer to these questions. But I do know, as we all know in our collective and individual heart of hearts, that our societal movement in the direction of divide and separate is wrong. The longer it goes on, the worse off we all are. The more divided we get, the weaker we all become. If we pursue the goal of fighting to determine who is right and who is wrong, rather than collaborate and seek together what is best, we have already lost.

So what can we do about it? We can vote out politicians who promote division and separation. That is a start, but that only treats a symptom; it doesn’t cure the illness. And to a degree, it’s perpetuating the same spirit – vote against people with whom we disagree. But that doesn’t help to start building bridges between us, connecting people again, finding that which unites us and focusing in on those fundamental changes in our minds and hearts.

Nelson Mandela proposed a path for making connection: “If you want to make peace with your enemy, you have to work with your enemy. Then he becomes your partner.”

Abraham Lincoln, as a trial lawyer, discouraged litigation and urged people to settle their differences, and modeled this approach: “I don’t like that man. I must get to know him.”

I’ll suggest this adjustment in the field of conflict resolution: Let’s start by seeing our disputes and conflicts as opportunities to improve the situation, to turn enemies into partners by getting to know them better, with a goal of achieving solutions that reflect our best and highest good. Si ascensus et descensus simul. We rise and fall together.

Photo credit: photo remixed from photos by miguelsantaeulalia and Robert Young under creative commons license

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What happens when you don’t do what the situation calls for…? (whether resolving disputes or coaching the Patriots in the Super Bowl)

Every year, the Super Bowl provides us with great lessons and a great game. This year was no exception as the Patriots and Eagles played in an exciting shootout that literally came down to the last play.

But the game’s outcome may have been decided by something other than who had the last chance to score. It’s easy to be Monday morning quarterbacks and go through the succession of “if they had done that, then..” or “If this didn’t happen, then …”, and we don’t know and may never find out all the relevant facts behind Coach Belichick’s controversial decision. But Patriots fans were still wondering why the starting cornerback for the past two years, Malcom Butler, did not play. That question arose in the second quarter of the game as Pats’ fans everywhere were texting and trying to will Belichick to “put Butler in the game” as the Eagles continued to shred the Patriots’ pass defense in the second half.

There were several explanations for why Butler didn’t play – missing practices due to illness, having bad practices and missing curfew. We know the highly effective “Patriot Way” calls for strict adherence to rules, and accountability for those who don’t follow the rules. Several great players are no longer on this team for reasons that have nothing to do with their athletic abilities. Patriots’ fans respect the strict discipline as a contributing factor to the team’s incredible success; “In Bill we trust” is a fan mantra.

But what happens when two key principles conflict? In this case, situational football vs. consistent, strict application of team rules.

Coach Belichick frequently talks about playing situational football, i.e. preparing for and effectively responding to what the situation calls for in any game or part of one. Every game situation is different and requires an approach that is right for those unique circumstances. You prepare for the Eagles differently than how you prepared for the Jaguars, and your second half plan may be adjusted based on what you saw in the first half.

It was clear by the end of the second quarter of the Super Bowl that the Patriots’ pass defense, solid in the second half of the season, needed adjustments. The noticeable difference was the absence of cornerback Butler, who stood on the sidelines ready to play but apparently being punished. We found out days later what the problems were and may never know the whole story. Based on what we do know, the situational adjustment would have been to shorten the punishment to one half – message delivered – and get Butler into the game in the second half. That did not happen, the Eagles moved the ball at will – mostly through their passing game, scored an unbelievable 41 points and won.

It is speculation whether Butler playing would have changed the outcome and the Patriots would have won the game. But given Butler’s track record, especially in Super Bowls, it was a reasonable conclusion that Butler playing in the game would have made a difference. We’ll probably never know, and also never stop wondering “what if…” My brother is still wondering why Ellis Hobbs was in single coverage on Plaxico Burress… 10 years later!

This conflict of principles applies to resolving disputes as well. There is often a conflict between what drives those involved in disputes – lawyers and clients alike – to take the actions they take. One of these urges the logical, rational assessment and approach: Given the situation and the factors involved in any particular dispute – and each one is different – choosing the right process to use to achieve the best result is critical. That guiding principle is often at odds with the client’s desire to satisfy his/her emotional needs – the need to win, to beat the other side, to prove them wrong, to grind them into the ground and make them pay, to get one’s “day in court”, to even the score, etc.

Situational dispute resolution and choosing the right approach for the dispute is also often at odds with the lawyer’s desire for financial gain as well as the need to do what he/she does and wants to do. Litigators want to litigate; mediators favor mediation as the best way; Collaborative Lawyers want to use Collaborative Law; businesses that always arbitrate want to go to arbitration. We tend to revert to our default position, what we are comfortable with, rather than be guided by what is best for the situation, especially when the process that is the best fit is not in the lawyers’ financial interests.

If disciplinary rules on sports teams serve the purpose of preparing them to play at their highest level and put the team in a position to win, and winning the Super Bowl is the ultimate goal, then a disciplinary rule must serve that goal but not be followed so dogmatically as to get in the way of it. If a team’s purpose is building character, teamwork and shaping quality human beings, and the games – including the Super Bowl – are vehicles for helping players reach that end, then enforcing the rule strictly may override the need to win the game. If that is that is the ultimate purpose, it is noble; just let the fans know that up front!

The driving and guiding force in dispute resolution is that which will best satisfy the clients’ interests and needs and help them reach their desired goal. Reaching that goal calls on us as lawyers and dispute resolution professionals to be situational, make adjustments, get out of our comfort zones or abandon the “this is the way we do it” thinking.  When we are faced with that conflict of what to do, it’s important to remind ourselves which of these conflicting principles serves the other.

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Is an adversarial process our best and highest good? The case for early mediation

Disputes are a part of life.  On all levels, in most relationships, we disagree about things. Disputes come up between spouses, siblings, parents & children, business partners, political parties/views, employers & employees, economic classes, races, genders, age groups, ethnic groups, religious denominations, and on and on.  Unless we are mindless clones or in a controlled society, conflict is normal and natural.

The question is not whether we’ll have disputes, but how we handle them when they arise.

We often respond ineffectively. We let it get personal, let it stress us, hurt us, anger us.  We draw up partisan battle lines and then others who were not even part of the original dispute jump in and pick a side.  We act before we give the matter a second thought. Rational, reasonable logical thoughts seem to abandon us, or maybe we just ignore those thoughts because they are not emotionally-charged enough.

The fight is on, and we all seem to want to be a part of it. We allow ourselves to get polarized, pigeon-holed, labeled as part of one side or the other.  The dispute escalates.  But we are civilized now, so we no longer decide things with duels, fist fights or gunfights. We take comfort in the notion that we have evolved, so we believe.  We have set up a judicial system with lawyers, judges and juries to resolve disputes.

This issue is not what we now use to fight or how or where we fight.  It’s that we are still fighting.  We now fight by using an adversarial system in courts instead of guns in the street (though not always).  We have replaced guns and fists with lawyers (whom we often refer to as “hired guns”), who are taught this adversarial system in law school.  We use a staged battle to reach a good resolution.  Does that make sense?

In the words of the memorable Mona Lisa Vito (My Cousin Vinnie):

“No. It doesn’t. Good bye.”

Here’s how the adversarial legal system eventually gets around to using mediation.  One party begins the dispute by publicly stating (filing a lawsuit) that the other side is bad, wrong, unlawful, liable, negligent, etc.  The other side then defends itself and answers the claims, presents a defense and maybe makes some counter-claims back at the first party. And the fight is on, utilizing a judicial system designed to manage the adversarial process, and a set of rules the court gives them to do so, for the next two or more years.

In theory, the parties are spending this time strategically preparing for a trial that will determine who was right, wrong or neither.  I say “in theory” because the data shows that 97% of these disputes filed in courts end up settling and do not go to trial.  So all those people involved in all these filed cases spent two years (and sometimes more) fighting and getting ready for something that will only happen 3% of the times.

One reason that many of these cases never go to trial is because in many cases, after a couple of years of fighting in the arena called litigation, the parties agree to discuss settling their cases using mediators in a process called mediation.  Here’s how.  After they have finished preparing for this trial, but before this trial begins, the lawyers will discuss with their clients the idea of mediating the case and trying to reach a settlement (not a resolution), rather than run the risk and incur the expense and extra time of going to trial and putting their fate in the hands of an unpredictable jury.  They will urge their clients to now avoid something they spent the past two years or more and thousands of dollars preparing to do.

You’re starting to think what I am thinking, aren’t you?

Now, I’d like you to think about how eager the parties in this dispute are to work with a mediator to resolve their dispute at this point, when their friends, relatives, colleagues, society’s litigious mindset and the media has been urging them to keep fighting, when everyone they know has lined up behind one side or the other, and no one likes each other anymore?

How likely is it that these parties can come up with a good resolution when they, with the assistance of their lawyers who are trained in the adversarial process and not in dispute resolution, have been fighting for two years?

When they have spent thousands, sometimes millions, on this legal process called civil procedure, along with an immeasurable amount of energy, emotion and resources?

When opportunities that may have been there two years ago, along with the time, energy, resources, expertise and money they could have used, are no longer available?

Think of the situation as a whole pie at the outset of this dispute.  Along this adversarial journey of a couple of years, many of the pieces have been eaten, gotten stale or fell off the pie plate. Now there is only one piece left – a shrinking pool of money (maybe). And now, the pie owners come to a mediator to help them divide up the pie in some fair or meaningful way that will satisfy their needs.  When the mediator asks the parties and lawyers to show him the pie so he can help them work with that pie to resolve this case, there is only one piece left.  Ask yourself what the mediator can now do with this one piece, and what he might have been able to do two years ago, with the whole pie?

If you were the mediator, what would you be thinking?  “If you had called me and gotten me involved two years ago, I would have had a lot more to work with.  There would have been a lot less sunken cost bias, a lot less opportunity costs expended, and a lot less hostile atmosphere.  All I can do now is try to figure out a way that the parities get something out of this one, lonely, stale piece of pie.”

What do you think?  The next time you find yourself in a dispute, how soon would you want to get to mediation?  Early or later?  How much of your pie do you want to bring to the mediator to work with?

Photo by Stu_splvack

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Family Business Succession: The Joys and Challenges

Family business succession can be joyous when there is a succession plan. But when there’s no plan in place, it can be anything but joyous.

It is a familiar scenario for a family.  Husband and wife build a family business, take pride in its growth and achievements while it provides for the family and then some. The goal is to then pass it on as a legacy to the children, so they don’t have to start from scratch.  And then, when we are ready to scale back or retire, our children will carry on the family business tradition and build it bigger for their children…

The quintessential American dream, and so many baby boomers, like some of their parents before them, achieved family business success.  Now, their prized possession, in many ways like a child they raised and nurtured, is ready with pride for its next phase of growth.  And Mom and Dad, successful business owners, ready to relax some, sit down with their children at the end of the year over a holiday family meal.  The time has come, Dad opens, to pass the golden goose on to their four adult children, three of whom have started their families. So the conversation begins the anticipated celebration of the passing of the business on to the kids.

And then the dream unravels – gradually at first, and then steadily – into a nightmare.  John, the oldest child and a chip off his Dad’s block, has always assumed he is the heir apparent to take over, run the business and keep it on its steady and successful course.  He is ready to become the new patriarch of the family, as well as the business.

Karen, the CFO for the last 15 years, went right into the business after getting her MBA.  It’s the only job she’s had and it has allowed her to balance work with raising three kids.  But now that they are older, Karen thinks about seeing what it would be like to work for another company other than the family business.  For the past three years, she has been in the uncomfortable position of being the buffer between two fighting siblings who have decidedly different views of where to take the business moving forward.

Samantha is a workaholic business and social media whiz kid who loves to challenge all norms and business frontiers.  Tech savvy, always exploring new markets, she is always at odds with John, whom she calls “Old School” or “mom’s favorite”.  Her latest idea is to double down on a division that she personally turned around over the last two years.  She also wants to buy a plant in Galway, Ireland, moving there herself, and expand the company’s overseas markets.

And then there’s Meghan, the family’s free spirit, her husband Zach, who works in the company as a manager and their young children.  They have often talked about moving west to a more progressive place like Boulder, Colorado to raise their family. For them, this means cashing out and getting paid handsomely for her share of the business and his sweat equity.

Needless to say, the dinner conversation doesn’t end well.  Tension rises between the siblings and Mom and Dad. Two weeks later, Samantha and John are looking to hire lawyers and fight it out.

Without a family business succession plan, there are too many untested assumptions and nothing to manage the conflicting individual agendas.  If this family business had developed a business succession plan, there might have been clear guidelines for making decisions and settling impasses.  Decisions could have been made more objectively, rather than reactively and with raw emotion, heightened by the family dynamic.  The family’s relationships – both personal and professionally – are now at risk.

This scenario is fairly common.  About 98% of family businesses do not have a business succession plan in place.  In fact, many never had an operating agreement or by-laws addressing how to run the business entity, make decisions and manage succession.  Having not ever done a business valuation done, it’s anyone’s best guess what the business is worth.

If this scenario sounds like your family business, there are alternatives to the scenario of hiring litigation firms and fighting it out in court, and most likely ruining the family business and your family relationships in the process.   A good first step would be to consult with a dispute resolution specialist to consider what options are available, how they would work to solve these problems and restore family harmony and business stability.  A trained dispute resolution lawyer should be hired at a flat rate fee to do a situational process assessment, and carefully review all the factors presented by this family business dispute.

That’s what Karen and Dad do in this case. The assessment includes educating Dad and Karen on the various dispute resolution processes available – mediation, arbitration litigation, collaborative law, circle process – how each one works and what are the factors that determine which process they should use.  Then, the assessment provides them with a blueprint, a recommendation on which process to use and why.

This first step by Dad and Karen will save the company, save thousands of dollars in legal fees, avoid the collateral damage of a dragged out multi-party litigation, maintain family relationships and put the family on a path toward restoring harmony in the business and at home.

Photo by: Michael Gwuther-Jones

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MBA Member Spotlight features Michael Zeytoonian

The Massachusetts Bar Association Dispute Resolution Section featured the following “Member Spotlight” on lawyer and mediator Michael Zeytoonian in November, 2017. Click here to read the article.

 

Photo credit: tian2992 

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How will the way we resolve our workplace and family business disputes impact our Thanksgiving meal?

I think a lot about my chosen areas of the law – both my areas of practices – employment and business law and the disputes that arise in the workplace – as well as the ways in which we resolve these disputes.

In workplace disputes, I represent both employers and employees, largely to be able to see the issues from the perspectives of both sides and have a more objective, balanced view of disputes. I also want to be free to be an advocate for either employees or employers. My role in these kinds of disputes is not that of a hired gun for one side or the other and to see the other side as the bad guy, but rather to either to provide proactive counsel and/or defend an employer that has acted properly or represent an employee who has been wronged.

The opposition in these disputes is not “the other side”, because I don’t see a workplace in terms of having two sides – employees vs. employers. Dividing and polarizing a workplace is never good. The real opposition is whatever it is that is causing a problem in the workplace, whatever or whoever it is adversely impacting the workplace environment. Ironically, the other side is that element that causes employees and employers to see the workplace as having two sides instead of a workplace where everyone works together toward shared and common goals. The goal for me is solving the problem(s) in a workplace that negatively impacts my client. The best result is a solution that creates a better environment than the situation that led to the dispute.

This approach begs the question: Are we fighting the wrong battles? Are we drawing the wrong lines of demarcation? Are we trying to resolve a dispute by using an adversarial contest when that doesn’t make sense? Disputes arise in all facets of life. They are natural. But does a dispute – which can also be an opportunity – have to set up the fight approach to resolve it?

Let’s think about this for a minute (or more). We as lawyers are called upon to help parties resolve a dispute and restore order in the workplace. But the approach we usually use to reach that result – often at the insistence of our clients – is to escalate the dispute by drawing lines between the employer and the employee and using an adversarial process, i.e. setting up a fight, to try to restore harmony and correct a problem. I’m missing the logic of that approach.

Let’s go a step further. Let’s use an analogy and see how this looks.

Imagine you are a father and your two sons are having a dispute and they come to you to help them resolve it. To make it more specific, your two sons are in the family business, they have a good relationship with each other and with the rest of the family, both as to business/workplace matters as well as in their personal and family lives. This dispute arises out of the business. So you give them titles that imply that they are on opposite sides of a fight – something like “attacker” and “defender” – and you also put the word “versus” between their names and titles. And then you tell each of them to retain a good hired gun lawyer and fight it out for the next couple of years.

You also give them a framework designed to culminate in some ultimate event, in which some third party – someone or some group who doesn’t know them or care about them – will determine which of them is the winner is and which of them is the loser. You also give them some rules of engagement for a procedure that requires them to do certain things a certain way and file a lot of information and documents related to the business and the dispute in a public records place. Later, that third party will review all this and lots of other information to help that third party decide who wins and who loses.

OK. Thanks dad.

Now, let’s reimagine that same fact scenario. You don’t give them titles this time and you don’t use the word “versus” anywhere. You encourage each of them to hire a lawyer who is trained in advising people legally and trained in different ways to help people resolve their disputes. You also recognize that your sons may need some expert advice from some expert in an area that is pertinent to what their dispute is about, so you encourage them to hire someone for that purpose and share the cost equally, and you do give that person a title – a neutral, independent expert.

You also give them some rules of engagement, but these rules of engagement are different from the ones above that are focused on forms, an order of steps that must take place, time deadlines to get those steps done and how and where to file lots of papers and information in a public repository where some third parties will review them. Instead, the rules of engagement you give them consist of basic principles and elements relating to the way they will go about resolving their dispute. You also give them a basic structure and some tools for doing this, with enough flexibility built into it so that your sons and their lawyers can adapt the structure to the situation the dispute presents.

Your sons are both pretty intelligent guys and like to have control over things like process and outcomes. They also wisely and for the good of the business and the family want to keep this dispute confidential. You also tell them that they will design the culminating event, the creative result of their collaboration with their lawyers and expert(s). They ask you how long this process is going to take because they really don’t want to tie up the next few years of their lives in a process that drains their energies, resources and emotions. You tell them that how long it takes is totally up to them and their lawyers working together, and will most probably be determined by what their goals are and what it is they are trying to achieve as a final outcome. But you tell them that they are looking at months, not years.

Your sons like this approach. And since you started this company with the goal and hope that they would someday take it over and build it further, so do you.

Your sons thank you. So do their wives and families and so does your wife. Happy Thanksgiving.

Photo Credit: Mark Levisay

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Now More Than Ever – The Growing Need For Dispute Resolution

Last week (October 16-20), lawyers and dispute resolution professionals around the country celebrated Conflict Resolution Week. In Massachusetts, the Massachusetts Bar Association, through its Dispute Resolution Section, presented five different events, one each day, each in a different part of the state and each with a different focus. Over 400 people attended these state-wide events, including judges, lawyers, mediators, arbitrators, college, high school, middle school and law school students, parents, teachers, coaches, special masters and interested members of the public. Governor Baker issued a proclamation recognizing October 19 as Dispute Resolution Day in the Commonwealth.

The types of dispute resolution (DR) processes that were focused upon included court-connected mediation, private mediation, collaborative law, youth (middle school and high school) peer mediation, direct conflict negotiations between nations and ethnic groups, designed claims programs like the Victim Compensation (9-11) Fund or the Boston One (Marathon Bombing) Fund and restorative justice.

There were some common threads and take-aways in these presentations and programs about ways to resolve disputes of all sizes and types:

  • The use of a wide and growing variety of DR processes is growing and people are inquiring about what their options are more than ever before. The days of defaulting to litigation right away are steadily in decline.
  • More and more, the programs noted, people are seeking ways to re-connect, rather than adversarial approaches that divide and separate people further.
  • There are many different ways to resolve conflicts, offered by courts, private DR professionals, community mediation programs and other internal programs for resolving disputes built into companies and organizations.
  • Many people, including judges, lawyers and business leaders, are now actively seeking more education and information about the different types and uses of DR that are available.
  • It was refreshing and inspiring to hear young people stand up in a public event at a law school and clearly and articulately describe how mediation works.
  • It was inspiring and energizing to hear that young people today are being trained in and embracing the use of peer mediation and restorative justice to productively address and resolve their conflicts.
  • It was an eye opener to see and hear that people from some of the most troubled and historical conflict zones – from Israel, Ireland, Kosovo and other places – are willing to travel to other cities in conflict and share some of the efforts they have made with others to resolve conflicts and restore relationships.

In the early 1980s, mediation was just being introduced as a new way of resolving disputes, in a way that kept the decision-making about the final solutions in the hands of the people in the dispute. Mediation is a voluntary, non-adversarial process in which a trained neutral mediator assists parties an in reaching a settlement agreement. It was hardly embraced back then and most people rejected it as something that would never work. Today, 40 years later, mediation is the most frequently used type of DR, far surpassing trials and arbitration.

In 1990, one lawyer in Minnesota walked away from litigation because of what he saw as how negatively it impacted clients, families and lawyers alike. He introduced a process called collaborative law and suggested it to a small group of judges and lawyers. Collaborative Law is a process in which layers and clients agree not to litigate. Instead, they replace the adversarial approach with a structured negotiation process in which parties and lawyers collaborate together by design to reach a good resolution of the dispute. Today, 25 years later, the use of collaborative law is growing steadily and is practiced in 24 nations around the world. Its international membership organization, the International Academy of Collaborative Professionals, has over 5000 members.

97% of the cases that are filed in courts today end up settling; less than 3% of these cases ever go to trial. The trial courts in Massachusetts welcome the use of DR at all levels. There are court-connected mediation programs in most state district courts. The federal courts in Massachusetts require the good faith consideration of dispute resolution alternatives at the outset of the litigation process, as an alternative to continuing litigation and/or going to trial for those cases for which DR would be appropriate, and provide mediators for that purpose.

In a society that is increasingly becoming more polarized, partisan and divided, Dispute Resolution is needed more than ever before. DR works efficiently and creatively to solve legal problems and maintain or restore healthy business, organizations and civic and family relationships. The trend toward more DR is refreshing and transformative, connecting and bringing people together rather than dividing and driving people apart. It is working to empower people, starting with our teenagers, to work together to resolve our own disputes, and restore normalcy and peace of mind where there was conflict.

Photo Credit Bill Damon

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