Make Mediating Your Business: How the Mediation Process Works in Business

Proud to have penned this article (on page 8) along with my colleague Francine Love for The National Conference of CPA Practitioners.

As professional advisors, you often witness your clients handling disputes in their businesses. It can be a disagreement between a customer, a vendor, or–even more troubling and dramatic–a dispute inside your client’s business, particularly a family-owned one. Because you’re trusted with their most sacred data, their finances, you are often asked to assist with a resolution. However, you know that to venture into such territory is fraught with danger to the relationship. What if you do resolve the situation? Or, worse, what if you resolve it in the “wrong way” in the eyes of your client?

Still, you know that litigation is for the most part messy and expensive. That cure is worse than the affliction. You know about arbitration, but you know that often lawyers treat it as a mini-litigation, and while it is private, it can also be very expensive and time-consuming.

There is an alternative that you can recommend to your client: Mediation.

“What is all the hype about mediation anyway?” This line, or some derivative of it, is often heard by mediators across the country. It is heard from many litigation attorneys who say they do not believe mediation works. It is heard from potential participants who say they feel confused as to how the process can work for them. And, at times, it is heard from judges who feel that the process does not afford certain legal protections to the participants.

And yet there are also many positive reactions to mediation–and not just for purely legal issues; it should be a tool you recommend to clients who need help with dispute resolution. Mediation is not just the less formal alternative to litigation, nor is it an unnecessary way station on the path to arbitration. Mediation can effectively and efficiently bring an end to conflict and help the parties come to a better understanding.

Some of the most common reasons that mediation is such a successful and meaningful process are:

• Input and control: In court, there is one decision maker–the judge. He or she casts the final decision related to the matter before them. In contrast, mediation allows the participants to have control over the final settlement outcome, creating great potential for a win-win scenario.

• Cost savings: Taking a matter to court, with each side paying separate legal fees plus court costs, can end up costing tens of thousands of dollars for each party. In mediation, both parties share the costs and there is more control over the budget.

• Time: Court cases are often lengthy and drawn out. There is no control over the timeline once the matter is in court. Mediation can be done according to the schedule of the parties and can move as quickly, or slowly, as they wish.

• Preserving Relationships: Most disputes involve family, friends, employees, and longtime clients. Mediation can help the parties develop solutions based upon mutual interests rather than adversarial positions.

• Confidential: Most courtrooms are open to the public so the information being discussed can be heard by anyone. In the mediation process, the information and exchanges shared stay between the parties and the resolution remains private and confidential.

Mediation works in a multiple of different arenas: from resolving neighborhood disputes or tenant disagreements to high conflict family drama and business disagreements within families of closely held companies. Mediation skills can also be instrumental in drafting agreements about how companies will operate, how decision-making will be handled, or how succession will take place upon different triggering events. In most of these situations, the underlying foundation is the need of the participants to be acknowledged, validated, and heard. Business owners tend to place a high value on building and preserving relationships, and using mediation strategically is the way to do so. By referring your clients to a mediation process, rather than letting disagreements fester, or intervening into a potentially explosive situation, you can serve the needs of your client and protect your own practice. Mediation should be considered another powerful tool at your disposal.

Elizabeth Vaz, a professionally trained attorney and mediator, and Francine Love, a business attorney, have recently launched their Business Mediation practice within Francine’s law firm. Liz can be reached at 844-785-2900 or e.vaz@vazlaw.com and Francine at 516–697-4828 or Francine@lovelawfirmpllc.com

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