Conflict Resolution for Small and Family Business: Collaborative Law and Supplier-Customer Disputes

Collaborative LawDisagreements between companies and their suppliers, distributors or customers can often disturb a mutually beneficial arrangement.  Neither party wants a prolonged, expensive legal dispute.  Neither party wants the public to know about the dispute or the terms of the underlying contract.  One alternative for small or family businesses looking for a fast, cost-contained, efficient solution is to use the relatively new discipline of Collaborative Law.

  1. What is Collaborative Law?  Collaborative Law was originally designed as a method for reducing the hostility and expense of divorce.  Practitioners came up with a set of effective steps to encourage squabbling spouses to engage inso-called interest-based negotiation (negotiation based core interests rather than on staking out extreme positions and haggling to reach a middle ground) and cooperative problem-solving.  Some of these techniques translate very well to civil disputes in which parties want to maintain an ongoing relationship yet resolve their disagreement efficiently.
  2. How Does It Work?  It starts with the parties and their attorneys agreeing in writing to seek a resolution of their dispute outside the court system.  They then set the parameters of their discussions, such as the number of initial meetings, the inadmissibility of any of the settlement discussions in court and a joint commitment to exchange relevant information freely rather than playing discovery games.
  3. How is the Lawyer’s Role Different? In litigation or most commercial mediation, the lawyer takes the lead adversarial role as the client’s primary persuasive mouthpiece.  He also utilizes the tools of the system to weaken the opponent’s side and strengthen that of his client.  In the Collaborative process, lawyers advocate for clients by supporting them in a problem-solving mode.  Since this can be a leap for some lawyers, special Collaborative Law training is the best preparation.
  4. Lawyer Disqualification.  To keep the focus on the conference room instead of the courtroom, in a pure Collaborative case the lawyers agree to withdraw in favor of litigation counsel if the case does not settle.  Since this is not always practical, variations are evolving, including some that protect in-house counsel.
  5. The Collaborative Team The negotiating group consists of more than just parties and their lawyers.  In most cases, a specially trained neutral Collaborative coach-facilitator assists in managing the process and party communications.Partiesoften find it useful to seek any neededexpert advice jointly, ranging from industry-specific factual interpretations to accounting guidance to third party legal opinions.
  6. Conduct of Negotiations.  In a non-Collaborative case, lawyers carry much of the load in offline negotiations or, for a few brief moments, in court.  In a Collaborative case, most of the work takes place in joint meetings with agendas carefully crafted to advance the settlement negotiation process and encourage interest-based negotiation.  The parties themselves are actively involved in this creative problem-solving exercise.

If the parties are engaged in the process, they can sometimes resolve a difficult disagreement within a few meetings, which reduces the drag on internal resources, reduces the legal bills and reduces the ongoing build up of conflict between parties that may want to continue to work together.  The whole process stays private, as do the terms of the arrangement from which the dispute arises and even the fact that the parties have done business together.  Although it is not right for every case, the Collaborative approach encourages customers and suppliers to move beyond their initial stances while giving them the flexibility to design a customized settlement that might not be available in court.