Family Business Mediation

Family business concerns are often ripe for mediation. Why? In many instances, there is no clear delineation between the family and the business. Individuals in the business are individuals in the family. The family is the business; the business is the family. Family members take with them to the workplace many of the issues that are the issues in the family: “Dad likes you best.” “You always teased me growing up.” “I never got the opportunities you did because I was first born and you were last.” The list goes on. Likewise, family members bring home all the concerns that business operations generate.

A mediator can help family members who work together to overcome business issues and disputes. Mediation helps parties to work together to flesh out actual problems, and to distinguish resolvable issues from the positional beliefs or feelings that can intrude on decision making. Mediation can help with respect to long term planning or the resolution of discrete one-off issues.

Here’s an example. Company A, a seller of widgets, was a long time family business owned by the matriarch. Indeed, it was started by the matriarch’s mother! Matriarch’s children joined the business and the business continued as Matriarch reached retirement age. Tom wanted the business to go in one direction, Vera in another (to sell wodgets, or perhaps to sell the Company itself). The decisions were never fully vetted or resolved, but business continued, and it was great. At family gatherings, Company A was the omni-present, unmentioned and enormous guest. While widgets sold and business was good, no one minded that the guest was quiet over there in the corner. Indeed, she paid for the gatherings.

Then business soured. And soured. People didn’t want widgets any more. Matriarch and daughters poured money into the business to keep it afloat. It wasn’t enough. The business failed and along with it the family’s finances. The family gatherings would continue, however. Company A (or perhaps now the ghost of Company A) remained the omni-present guest, though now not so quiet. In fact, Company A’s presence ultimately drowned out other concerns and conversations. So much so that family gatherings stopped.

Mediation potentially could have helped the family and business. A mediator could have sat down with family members and helped them to make plans about the business, about what who makes what decisions, about what form those decisions might take, about what to do when the business succeeds or fails. A mediated plan from the outset could have helped the family members/business operators to determine rights and responsibilities of each throughout the business’ life cycle.

Mediation could have helped family members to identify and understand each other’s expectations and to contend with outcomes, possibly even unforseen ones. On the far end of the equation, after the business failed, mediation still may have been (or may be) useful to help the family contend with the moribund business and communicate as a family. Such a result may produce family gatherings where the ghost of Company A remains just that: a ghost.

Contact Attorney/Mediator Clifford Rohde for a free initial consultation regarding whether mediation may help your family business now or in the future. 518-641-1005 or cliff@rohdelawfirm.com