Taking a family member to court over a family business issue only serves to inflame conflict and delay a result that gives you resolution and the opportunity to move on with your life. Conflict can develop in just about any business, but that gets more complex when family members are involved.
Family members might not be able to execute the duties of a position with which they have been assigned, some might not be interested in carrying out a plan that was designed specifically for the family business, and still others may not want to be involved at all. This can generate conflict and legal disputes that are costly in terms of both time and money.
Succession is another critical issue in family businesses. If a business owner has not done enough to define this, the individuals empowered to carry the business forward might be confused about intentions or argue about who gets to make decisions. There are big psychological costs to taking a dispute like this into the legal system, because it has the potential to irreparably damage family relations.
That’s why mediation is one model that can be especially effective for family concerns. When a family member files suit against another family member, the ramifications of that decision can reverberate for many years, possibly even across generations. Opting to take that dispute outside the courtroom, however, to a more neutral atmosphere, can help to repair the relationship and address the family business issue at hand.
Mediation is good for family businesses first of all because it is solution-oriented. Litigation, on the other hand, is designed to find problems or weaknesses in the approach of the other party, which only pits them even more against one another. It’s too difficult for family members to simply walk away from one another after a dispute is over, so mediation can allow everyone to air their concerns and arrive at a reasonable solution without much trouble.
It’s essential for most family businesses that the root cause of the problem be discovered and resolved for two reasons: continued business success and family interaction. It’s not really possible in most situations to simply sever ties, and that’s where mediation is especially valuable. The mediator’s objective is to help both parties reach a reasonable solution, decreasing the chance that both parties walk away unhappy. Parties instead focus on compromises that will allow them to get back to work rather than to continue arguing.