Category: Civil

Mediator Selection – When Marriage and Business are Combined

In recent years I have noticed a developing trend in divorce mediation. Specifically, there are many more marriages where the parties are also business partners. I first noticed this in my mediations involving married parties from other cultures; notably Asian, Hispanic, and Caribbean. Later, I noticed the same trend in those born in the United States. The businesses involved have been varied. Real estate companies, contractors, landscaping companies, restaurants, retail operations, and services, tend to make up the majority of the businesses in the cases I have seen.  A few have been professional practices. Most of the time there are business aspects that fall outside of the general domestic relations mediator’s knowledge or comfort level. The clients who come or have been directed to me know that I have experience in the corporate business world as well as the domestic relations area. In some cases, I have provided useful insight to the attorneys who are not accustomed to handling the business aspects of divorce, as they try to make certain they have been thorough in their representation. This is only one reason an advocate might want to seriously consider mediating in a divorce case where the clients are also in business together.

Business Continuity: Mediation is often beneficial and desirable where marriage and business have been combined because of the need to keep the business functioning as smoothly as possible during the transition, and because of the creativity, flexibility, and efficiency possible in the mediation process. There are some businesses where the parties remain partners or associated even after divorce. Actions and decisions needed in connection with the business operations can happen much more quickly and planning facilitated in the mediation process. On the other hand, when the parties want to terminate the business relationship, there are still decisions that need to be made preferably, with cooperation so as to minimize any negative impact on both parties. In order to get the most out of such mediation, a mediator knowledgeable in business and domestic relations should be selected by the parties. Such a mediator can draw from other similar cases and increase the options the parties can explore. There is another benefit.

Available Business Neutrals: Many times in these cases each of the parties have their own financial advisor in connection with the evaluation of their business interests. Often, if needed, a financial neutral that works with a mediator can provide useful input that enables the parties to get beyond impasse and develop a creative, mutually agreed upon resolution. Such a neutral is often acceptable to the parties since he or she is suggested by the mediator and not by either of the parties or their attorneys. In addition, the neutral financial has no particular allegiance and therefore the freedom to come up with what is likely to be a mutually acceptable resolution.  This route is often much more appealing and less costly than pursuing litigation.

Advocates’ Value: Today’s clients, particularly those engaged in businesses, are much more comfortable with negotiation, and with their lawyers who can assist them to reach their desired goals in this process. The clients retain more control over their fate and often feel more like they are receiving true value for their money, than when they leave everything to their lawyers and judges to resolve. I have seen on several occasions where the clients begin to take more active roles in their cases during the mediation. When this occurs, they are less likely to blame any perceived negative results or impact on their attorneys afterwards.  In addition, the developing sense of partnering with his or her attorney serves to enhance the positive image of the specific attorney, and the legal profession in general.

Minimizing Emotional Impact:  Another benefit is the particular skill of the mediator who is accustomed to handling business and domestic relations cases in the delicate balance of getting the parties to transition and change focus from emotional domestic relations issues to negotiation of business elements, then back to domestic relations issues with less emotional content. This can happen when the mediator is skilled at extending and maintaining the productive business negotiation environment to the generally more emotional domestic relations discussions. It is not that domestic relations mediators are unable to do this, it’s just that mediators who do both and have the experience with handling business and domestic relations issues simultaneously, have much more to draw from due to experience as well as knowledge and training, and can do so easily and efficiently.

So, the next time you have a case where business and marriage dissolution issues are combined, try engaging the services of a mediator experienced in handling both. See for yourself whether there are advantages in doing so.

Civil Cases and the Collaborative Process – Virginia Update – Marshall Yoder and Donita M. King

In the long history of humankind (and animal kind, too) those who learned to collaborate and improvise most effectively have prevailed – Charles Darwin

            Collaborative practice continues to grow in popularity as a dispute resolution model in Virginia, the United States and Internationally.  As of last count, collaborative practice in some form existed in 29 countries as well as in nearly all states domestically.  Collaborative practice has it roots in domestic relations cases but is also beginning to take hold as a model in many other types of disputes; just as mediation developed some years ago. For example, collaborative practice has been used in the following non-family law matters:

  1. A business breakup and reorganization involving two equal owners of a health care services company.
  2. A sexual harassment case involving an employer which was resolved successfully for both parties in four months.
  3. A trust administration dispute among family members arising out of a will contest concerning the treatment of assets contained in the trust.
  4. A homeowner-contractor dispute which was resolved in four months using a combination of collaborative attorneys, a case evaluator and a mediator.
  5. A conflict over a will that arose while a couple was going through a divorce when the husband died unexpectedly, which created a standoff between the deceased’s wife and his mother.
  6. A dispute among family members involving an elderly adult with failing capacity and what to do about the elder’s assets, healthcare issues and long-term treatment.
  7. A construction defects case involving multiple parties, including a commercial general liability insurance company.
  8. A business breakup between a four person ownership group of a bio-tech company.
  9. A dispute between a non-profit organization and an independent service contractor which was resolved in three months.
  10. A performance/disciplinary action/near termination case involving a case between a faculty member and a private

What all of the above cases had in common was that at some level, the dispute involved relational issues. In Virginia, this determination is made through knowledgeable consideration under Rule 1.4 of the Code of Professional Responsibility, so as to inform the client in an appropriate case, where the collaborative process would be the most likely beneficial process under the circumstances.  In businesses with corporate counsel, there is a need to contain the budget on legal expenses as well as a need protect the client’s time, interests, and brand. Collaborative attorneys, as well as all attorneys, should inform such counsel of the viable alternative of the collaborative process to accomplish these objectives. Corporate counsel brings the business knowledge as a client. Where the services of good, knowledgeable and experienced collaborative counsel is utilized, the relationship with litigation counsel can be preserved by corporate counsel and limited to those cases where such counsel is most needed. After an appropriate pilot program to profile  which cases would likely be better suited to the collaborative process, the corporation could conceivably benefit financially and better protect its brand and relationships; certainly something worth exploring. Small businesses can do the same as usually the business leader is very sophisticated and can work with collaborative counsel the same way he or she would work with a traditional attorney with the added benefit of counsel who is focused on not just a purely legal solution. See Comment [2] to Rule 2.1 of the Rules of Professional Conduct (“Advice couched in narrow legal terms may be of little value to a client, especially where practical considerations such as cost of effects on other people, are predominant.”)

So why bother with the collaborative process when the traditional lawyer is a good negotiator? It is axiomatic that people require alignment in their disputes.  We see this when people ask to bring “support persons” with them to mediation sessions.  Indeed, it is the lawyer’s obligation to align with his or her client in a given dispute.  Alignment is no less important in a civil dispute as in a family law matter.  Collaborative practice harnesses the power of the alignment dynamic, while at the same time, redefining the lawyer’s role as creative solution-generator acting in concert with his or her client and the other client and their collaborative counsel.  The traditional lawyer’s ability to act as a creative solution-generator is limited and often hampered by the necessity to protect and advance the positions of their clients in the adversarial process.

At the heart of collaborative practice is a focus on the underlying interests of the parties and helping them extricate themselves from the “muck” of positions in which they are stuck.  The model is especially appropriate for businesses that are focused on their bottom line and wish to avoid the enormous expense associated with full-blown discovery and litigation. The explosion of electronic data in litigation has led to the creation of cottage industries designed to manage, sort and organize sometimes hundreds of thousands of pages (or more) of documents, the vast majority of which are likely not to contain harmful or helpful information.  Imagine if the real dollars paid in simply assembling and reviewing these documents were instead focused on the underlying interests of the parties to the dispute.  In collaborative practice, there is recognition that information is vital to clients making informed choices so there is full disclosure of relevant information without engaging in formal discovery.

At its most practical, the model recognizes that over 90% of all civil cases resolve prior to trial (over 98% in federal court alone).  Rather than focusing on an event that is likely never to occur and engaging in negotiations that are largely driven by a litigation model (affectionately termed “litigotiation” by Professor Marc Galanter), collaborative practice simply allows a focus on the more likely outcome of settlement to take place first.  It is a transparent process in which the parties brainstorm options with their counsel, eventually evaluate those options, and then work together to a durable agreement that satisfies the interests of all parties.  However, attorneys are by no means the only members of the team and financial neutrals, consultants, and coaches are being used as needed by the clients.

Collaborative practice principles are also being used before disputes even break out, particularly in estate planning areas where the parents may need to have difficult conversations with their children regarding the planned disposition of their assets.  In the Atlanta area, collaborative practice is being used in court proceedings involving conservatorships.

The International Academy of Collaborative Professionals now boasts a membership of over 3,400 professionals of which over 150 designate themselves as civil practitioners.  The IACP has an active civil committee as well which is focused on tying civil collaborative practitioners together on an international basis.  In Virginia (which has one of a few statewide collaborative practice organizations), the civil committee of the Virginia Collaborative Professionals is currently developing plans to spread the growth of collaborative practice through public outreach, trainings, appropriate case referrals, and partnering with local ADR organizations such as community mediation centers.

 Often civil cases are referred from family law practitioners who are also using the collaborative model in their domestic work. Many marriages now involve family businesses and business partnerships. Again; the model is well-suited to any dispute which involves potential continued or anticipated relationships.  The civil collaborative attorneys in Virginia are working together to bring this alternative to those clients and professionals who would benefit from its use; not as the only option, but certainly a viable beneficial option where appropriate.