Author Richard Solomon is a conflicts and crisis management lawyer with 50 years of experience in business development, antitrust and franchise law, management counseling and dispute resolution including trials and crisis management.
In every dispute avoidance/resolution article posted by TamerlaneGroup, we urge that those headed for dispute scenarios try to recognize the oncoming problem and call in expert resolution expertise at the earliest possible moment. The earlier that is recognized and dealt with effectively, the less hostility; the less injury to business relationships; the less sheer financial injury to the transactions in question; and certainly the less expense of lawyers to get them resolved one way or another. There simply is no justification for just letting problems grow until otherwise amicable business relationships become adversarial. No one can argue against that position.
Some oncoming disputes cannot be reconciled because they are fundamental to the efficacy of the firm and everyone is intractable right from the beginning. Others cannot be reconciled because executive ego simply cannot be disengaged and becomes the real cassus belli. Most, however, are amenable to conciliation without loss of position should conciliation not produce acceptable results.
What a really effective dispute resolver can bring that is truly valuable is the capacity to self mediate. Even when personalities have already started to become confrontational, that resource has the capability to cool it down and convince the participants that whatever it is can be resolved privately; at great savings; with little or no operational disruption; and with the relationship intact as it was when the first agreement on the project was reached.
All intelligent people want to avoid costly, wasteful disagreements. Therefore, the more intelligent the people are who are involved, the more valuable this approach really is. Without it, ego becomes more of a part of the scene. Ego has no value or negative value in sorting out differences. There is absolutely no confrontation scenario that is as favorable as self mediation. If there is a situation that self mediation simply cannot resolve, the parties will have formally reserved their rights to confront each other. No advantage will have been lost.
There is no other way to resolve differences that is not vastly more costly, and that does not even take attorney fees into consideration. The significance of conciliation techniques is reducible to metrics. There is an amount in controversy. There is a cost of deal loss. There is a value of important company resources being redirected from their function to dealing with the dispute. There is the cost of litigators/arbitration representation. The TamerlaneGroup approach is by far the best mode for keeping contention at a minimum in business life.
If you subtract from the amount in controversy - what you could win if everything goes your way (which it seldom does) - from which you subtract all the other cost elements. That shows what you really win if you do win it all. This metric examination demonstrates the value of resolving any oncoming dispute at the earliest possible moment.
Since you will never under any circumstances get 100% of your 'claim', saving the other expenses enhances the net recovery. Do the math. You simply cannot come out better in any controversy than handling it this way.
Couple that with the absolute fact that you and your opponent know the most about the issues of anyone in the entire world. Working on this in good faith - which is achievable because of the drive of the metrics - it will always be resolved more positively if the principals resolve it themselves rather than submit to some stranger for final determination.
Self mediation is also the most private way in the world to sort out issues. No disclosure requirement in the world requires disclosure of disputes that did not go to enforced resolution. To be sure, any resolution - regardless of method used - may result in some reduction of the value of any deal to one or both of the parties. That may have to be written down in one’s accounting system. However, write downs for business reasons are far more favorable that write downs that must be attributed to full blown disputes.
At every level, self mediation is the product of genius management. The most knowledgeable people, if moderately intelligent, can accomplish this. There is absolutely no downside.
Traditional legal advice is 'win' oriented in the sense of prevailing 'over' an opposite party. Since this is the highest law firm revenue producing alternative, is it any wonder that 'winning' is encouraged whenever a client says that there is a dispute that needs attention. In this instance, it is the path less followed that is the path to best result.
Business 'morality' is far better served by resisting the path leading to conflict whenever practicable.
Inasmuch as the history of business dispute resolution is such that mutual angry hostility is the expected ambience when disputes arise, it may take some time before it becomes ubiquitous practice to make unnecessary hostility vanish from the equation. More intelligent people are coming to recognize the incredibly positive value of this approach. While I might wish that I had some protected position on this way of handling things, I recognize that its extreme positive attributes will cause it to spread widely among the legal and business world. That in itself is justification for this proselytizing effort.
If you are within your own mind pushing back while reading this, consider that to be indicative of your subliminal recognition that it would be very useful to your business prospects. I suggest to you that in open conflict there is no such thing as 'winning'. What people think of as winning is in fact resolution at greatly reduced value from that which you thought you were going to win. Winning is actually far less valuable to any company that avoiding the confrontation through self mediation. When you realize that you can try this without any loss of 'position', vis a vis any potential opponent, there is no logical argument that can be made against what I am trying to convey in this piece.