Reprint permission from the December 1995/Jaunuary 1996 issue of Crain's Small Business.
Stop! Before filing that lawsuit, consider another approach that can resolve differences and still make you feel like a winner: mediation.
Mediation is an increasingly popular way for people to work out their conflicts privately with the help of an impartial third party.
A trained mediator works to facilitate resolutions through compromise and reason, not by fiat. For that reason, mediation is sometimes unfairly dismissed as a "touchy, feely" forum where disputing parties are cajoled into compliance.
All kinds of hard-edged business disputes can be settled through mediation.
It is frequently and successfully used when parties disagree about leases, property rights, employment agreements, purchase-and-sale agreements and virtually any other kind of commercial arrangement.
How does it work?
A mediator conducts a series of informal "caucuses" -- confidential meetings with each of the parties (and, usually, with their attorneys) to learn the facts, the issues and how far each side is prepared to move toward a compromise.
When the time appears right, the mediator tactically convenes joint sessions designed to open up direct communication between the parties.
Operating in a calm and nurturing environment, the mediator assists each party to better understand the weaknesses of its position and the strengths of its opponent's.
During a typical session, the mediator skillfully probes, tests assumptions and carefully assists each side in developing a negotiation strategy that will encourage the other side toward settlement.
Often, as the fear of legal threats lifts, extreme demands are voluntarily withdrawn, unrealistic offers are voluntarily modified and tempers cool.
In a matter of just a few hours, a settlement is structured that effectively solves the problems that brought the parties to the brink of a court battle.
When it succeeds, mediation is a quick and inexpensive way to let business people meaningfully participate in their own negotiations, without the open hostility of legal action.
It also affords them the invaluable input of an objective mediator, whose job it is to assist them in amicably exploring all the alternatives, including those they may not have even considered.
What's more, mediation outcomes can preserve -- and indeed improve -- the relationship between disputants, who in many cases are longtime business associates.
Small business owners would be well advised to provide for the resolution of any future disputes by adding a "mediation clause" to their written contracts.
Whether or not they have done that, prudence dictates that, before resorting to the courts, they seek the assistance of a trained mediator to help resolve any differences.
Even if a lawsuit has already been filed, it may be well worth the effort to avoid the personal trauma, uncertainties and costs of litigation by pursuing the extraordinary opportunities mediation offers.
Marc J. Lane ([email protected]) is a Chicago lawyer and financial planner and an adjunct professor of law at Northwestern University School of Law.