Written by: Scott D. Calhoun
In my more than thirty years of practicing law, I have acquired many skills that were not taught in law school. Perhaps among the most important of these is the ability to find the path that brings the difficult transaction to a close.
In my experience, however, there are times when despite the desire of the business folks to get the deal done, a single issue or personal attitude can get in the way and prevent both sides from accomplishing their goals. Sometimes, we could use a little help. One possible source for that help is mediation.
Understanding the True Definition of Mediation
Perhaps the term is new to you, or maybe you have only heard it used in connection with a lawsuit or other dispute.
So, what is mediation? It is a process in which a third party (the mediator) is brought in to help the parties work out their disagreements or work through nearly intractable issues to find a solution. Either they resolve a dispute or find the path to move forward.
Mediation can be used to get a transaction through a difficult spot or to reach an agreement to end a dispute.
What Meditation is Not
Let’s look at it another way. Mediation is not:
• A way to lose control. A mediator does not decide anything or impose anything (unlike an arbitrator). Each party decides whether to reach an agreement or not.
• A sign of weakness. Mediation is simply a tool to help people get past a business or personal issue to find an agreement.
• Only useful to resolve lawsuits. Mediation can be used very effectively to get a business transaction past a final hurdle that has stumped the parties.
When can Mediation be Helpful to Advisors?
For independent financial advisors, mediation might be useful in a couple of different scenarios.
One is in the context of implementing a succession plan. Suppose, for example, that the owner of the advising business has done the planning and selected a process for the next generation to take over the business.
But when the time comes to implement the plan, either the owner or the next generation raises an issue that was not contemplated, and in the course of negotiations, the two sides become entrenched in their positions, jeopardizing the entire transaction. Mediation can help save the succession plan, and therefore, maybe the entire business.
Another to consider: suppose the advisor is working with a family to manage the family’s assets and maximize their investments. One family member (not the advisor’s primary contact) objects to the overall plan design and creates turmoil, which threatens the long-term health of the entire portfolio. Mediation could be used to help the family members work through their issues and ultimately benefit everyone.
The Last Word on Mediation
The point is that sometimes we could all use a little help. Having now been fully trained as a mediator, I have become more aware of different opportunities to use this particular skill.
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