For happier endings, mediate - Family Business

Nation's Business, July, 1994 by Sharon Nelton

Earlier this year, a court in Washington, D.C., appointed an independent mediator to help resolve bitter conflicts among members of the litigious Haft family, whose business empire includes Crown Books, Trak Auto, and Shoppers Food Warehouse.

For the Hafts, mediation, which resulted in a settlement, was a last-ditch approach that was imposed upon them. But professionals increasingly are urging business families to seek mediation voluntarily, long before litigation, when they cannot resolve disputes themselves.

"Mediation is the wave of the future," says Joseph S. Hellman, senior partner and chair of the alternative dispute resolution department at the New York City law firm of Kronish, Lieb, Weiner & Hellman.

In mediation, a neutral, outside person "joins the discussions to help the parties determine their own solution," according to John S. Powell, a certified mediator and director of the North Carolina Family Business Forum. Mediation, he says, "focuses on the future and tries to protect the relationships between the parties after the dispute has been settled."

Mediation is cooperative rather than adversarial, say its proponents. It is much cheaper than litigation, and, because mediation brings the parties themselves together (and not just their lawyers), quicker settlements often result.

Mediation helps the parties get at the real problems, says Powell. In one case, he says, the stated issue was the failure of a family business to pay adequate dividends. But the real, hidden issue was the anger one man felt toward the perceived failure of his brother, the company's president, to help look after their aging mother. "The argument could only be settled after the real issue was identified and dealt with," says Powell.

"A lot of psychic needs get filled in a mediation," says Hellman. These include needs to be heard, to have some respect, and to have your position weighed and considered, whether it's ultimately accepted or not, he says.

And finally, mediation is strictly confidential-unlike lawsuits and court proceedings, which are public. The Hafts quietly reached a settlement just a week before the dispute was to go to trial--one that was expected to be a media circus.

A number of professionals, including lawyers, psychologists, and family-business consultants, provide mediation services. Look under Mediation Services in your Yellow Pages, or call the Family Firm Institute at (617) 738-1591 for its 1994 Directory of Consultants and Speakers,

One of the 35 regional chapters of the American Arbitration Association can assist you with referrals, or you can call the national office at (212) 484-4000. Look for someone who is trained in mediation and who understands both family dynamics and business.

For a detailed discussion of the mediation process, you can obtain a free copy of "Using Mediation To Settle Family Disputes," an article by John S. Powell. Write or call Powell at the North Carolina Family Business Forum, P.O. Box 2888, Burlington, N.C. 27216; (910) 226-1380.

The "most wonderful" thing about mediation, says Hellman, is that at the end, people are happy. "Whatever happens in a mediation, it's something they've agreed to. It's theirs." With a lawsuit, he says, "you've turned control over to somebody else."