8 advantage points to gain in wildfire partnership and LLP disputes

Partnerships (including LLPs) can be very effective organisations - BUT …. when disputes blow up in them, they tend to blow sky-high. Everyone involved suffers as a result.

Partnerships combine a highly combustible mixture of finances, business governance and management, staff management, professional duties, ethics, regulatory pressures, working relationships and personal relationships. It only takes a spark or two.

Sparks can fly from an endless range of operational issues like remuneration, performance issues, sickness absence, complaints, whistleblowing, harassment or discrimination allegations, maternity/parental rights, succession planning/retirement, egos and personality clashes ….

The legal, business and personal costs of dealing with partnership disputes can be eye-watering, both literally and metaphorically. Surely, there must be a better way?

Fortunately, there is: mediation - using a skilled, neutral professional to open up pathways to constructive solutions.

Mediation brings huge advantages to the resolution of partnership disputes:

1. Everyone gets listened to …

In too many partnership disputes, people (or factions of people) stop really listening to each other at an early stage. This makes finding a resolution increasingly difficult. A skilled mediator enables the parties to rediscover their proverbial ears.

2. Safe thinking space

In the hurly-burly of a dispute and in the midst of a busy professional life, with client care and other pressures, it can be difficult to think things through and try things out. A mediator gives parties the space to do that.

3. Confidentiality

Unlike legal proceedings, the mediation process is confidential. This enables solutions to be reached which (within ethical and regulatory limits) protect the reputations and careers of individual partners and the partnership as a whole.

4. “Without prejudice”

If there is an existing legal dispute, proposals made in a mediation are “without prejudice” so that they cannot generally be used against the proposing party in any legal proceedings. This creates a safe environment for discussions between parties.

5. Creativity

A Court or an arbitrator has a limited range of remedies at their disposal, the most common being financial damages and legal costs awards. This creates ever-increasing risks on all sides.

In a mediation, the parties are free to come up with their own solutions. Those solutions can be to the benefit of everyone. Even in exit discussions, solutions can be agreed which help create a brighter future for all concerned. They can also avoid the risks of potentially devasting "all or nothing" results in the Courtroom or arbitration chamber.

6. Speed

Legal proceedings often take several years to grind to a conclusion. During that time, the partnership’s business inevitably suffers and the toll on individual partners can be immense. Mediation can cut through to a resolution very rapidly – often at the end of a single day’s session.

7. Cost-effectiveness

A successful mediation typically saves many thousands of pounds in legal costs for each party, as compared with legal proceedings.

8. Future-focus

Legal proceedings tend to focus on financially compensating a party for past wrongs. Mediation tends to look to the future. The parties in a mediation are encouraged to build solutions which enable them to move on to better and more constructive lives.

The above advantages apply to almost any dispute. Because of the multi-faceted nature of partnership relationships, they are particularly important for the resolution of partnership disputes.

Although no mediator can guarantee a solution, that (in a sense) is the beauty of mediation: the solution is in the hands of the parties themselves. So, next time you come across a partnership or LLP dispute, whether in your own firm or as an adviser, consider agreeing to appoint a mediator at an early stage.

For a confidential discussion at any stage, please contact me at rob.mccreath@mccreathmediation.com