The law is really a problem-solving tool. You have a conflict with someone that you can’t resolve so you turn the whole matter over to the judge, who makes the final decision. Litigation is just one of the tools to solve problems, though. And, honestly, it’s not the most effective one for small business owners or solopreneurs.
Why Litigation doesn’t work for you
I hear it on the forums, someone has a problem and someone else says, “sue ‘em”. Litigation is a daunting process, people. Even as a lawyer I find it scary. There are rules, procedures, customs that aren’t familiar to you.
Litigation requires the expensive assistance to make your decisions for you. Once the litigation process starts you have very little say in what happens, like almost none. You will have to live with someone else’s judgement. That’s tough,especially when you consider that attorneys know the law, but they can’t be as knowledgeable as you about your business or what a workable solution looks like.
Also, litigation is a time suck. Most small business matters end up in small claims court. It’s expensive in terms of time and money. First, there’s the time lost in researching going to small claims, decided to go pro-bono or get a lawyer, finding documents and preparing your argument, finding a lawyer or filing the court papers yourself–all before you actually go to court. And, I didn’t include all the time spent worrying. Total up those hours. Now figure out how much lost income that would be for you. If the amount you’d lose is less than the amount you could possibly gain in court, than small claims might be a good option. Might. You never know if the magistrate got cut off on the way to the courthouse that morning.
Second, t’s expensive in terms of money, although there are ways around that. Clients often ask me, “should I go to a lawyer?” My best advice is go if you think you need to go, but remember what a lawyer is for–to offer counsel, not make decisions. Very often, your state bar association will have a reduced fee panel of attorneys who offer a lower rate for the first meeting. Be well prepared and you can get a lot of suggestions and answers.
By the way, did I mention that very often, the defendant doesn’t show up to court, prompting the judge to reschedule the date? Another day lost from your schedule. How do I know all this?
I had the pleasure of teaching in one of the first and leading conflict management programs at the University of Massachusetts. My grad students spent every Friday mediating at the Quincy District Court while I evaluated their performance and sometimes sat in. Students appreciated my unorthodox teaching style and gave me the nickname of ‘the iron fist in a velvet glove’, their way of saying that I have a talent for conveying hard messages with a soft touch. I’m proud to say one of my students, Colin Rule, went on to become the director of dispute resolution for Ebay. I’ve mediated and seen others mediate probably a thousand small claims cases and I just don’t think it’s good for you.
Mediation is better for you
Mediation works. Mediation is a process where you sit down with a neutral third party who facilitattes your conversation with the goal of finding a workable solution for all. Unlike the judge, mediators do not make the final decision- you do. For about a hot minute there was actually a TV show based on mediation. Well, sorta, more on the main characters love life than her cases. But still…
Mediated agreements are durable. It’s a much more successful process (85% reach agreement and it sticks!) because nobody is coerced into action. Self-determination is one of the important tenants of mediation along with confidentiality. Something you don’t get at small claims court. Anybody who wants to invest the time can find out your private business matter is the subject of litigation.
Mediation is also better if you want to preserve or rebuild your working relationship. A mediator can help air those negative feelings and misunderstandings that a judge is not interested in nor equipped to handle. To me that’s where the magic is. In mediation, you can clear up misunderstandings, share those hard feelings knowing that there’s a communication expert right there to help you. Best part is that the problems are more easily solved when there’s more understanding.
A quick story
This story is one of my favorites. A dentist – let’s call him Bob-reluctantly brings his client to small claims court to recover the payment for a root canal performed. The client, James, was almost a year behind on payment and avoiding all attempts from the dentist to talk. He felt he had no other choice but to sue. The client arrived to court with his wife, Linda, who joined in as support for her husband.
Each side told their story of what happened. Through facilitated conversation it was revealed that James was throughly embarrassed about not paying. He’d lost his job, didn’t have the funds, and wasn’t having much success with his search. He intended to pay eventually but each invoice was a reminder of what a mess he was dealing with so he put it aside. Bob shared how hurt then angry he was that James would treat him in such a dishonest way. He considered his clients as part of his family almost and couldn’t understand why James wouldn’t talk to him.
Long story short, Bob worked with James on a payment plan. In fact while working out the details James mentioned he had a twinge in a tooth. In a flash, Bob had James’ mouth open and saying, “come back to the office after this”. Mediation helped Bob recover the income but also re-establish a client relationship that had potential for more income and was personally satisfying. All from talking.
Best thing is, mediation is so affordable. Where attorney retainer fees can start at $2500, mediation is much less expensive. Your nearest community mediation group is a non-profit organization that probably offers business services along with divorce and community mediation services on a sliding scale. Having sat of 3 different mediation boards, I can tell you that the volunteer mediators are well trained and more than capable of assisting you to develop a range of options and solutions. You are the boss in mediation unlike litigation and you’re free to leave the process whenever you want. But you won’t want to.
t’s easier to find a mediator than you might think, if you want to give it a try. Google your city or state + community mediation center. For instance, there’s a community group near me in Berkeley called SEEDS that offers a court mediation program.
Have you tried mediation in your small business? What did you discover?