What Happens When Things Go South? Posted by Lee Kanon Alpert on Jun 14 2016


New partnerships and businesses are formed every day, all in hopes of hitting it big and flourishing in their specific markets. However, an overwhelming number of new entrepreneurs and even seasoned professionals, fail to consider what will happen should the business relationship go south.   In the beginning, people starting new ventures tend to wear rose-colored glasses and think that nothing can go wrong in their partnership. They may have even done business with their partners in this new venture, successfully in the past. And they have the perfect partners who share the same vision for their business, and fully expect everything to move like clockwork as they work towards building their version of a successful and profitable business.


Well, this may be true for a handful of collaborators but the odds of success of new businesses are disturbingly dismal. Most face a jarring wake-up call when problems and issues start cropping up.  Of course any good partnership or business relationship will have executed a written agreement that outlines all eventualities should problems occur, including provisions for how disagreements may be expeditiously settled. You will be surprised at how many of these agreements fail to include fairly simple yet detailed clauses that would help facilitate an efficient, equitable and cost-effective method of resolving differences between parties that would allow their business to move forward, quickly.


Many partnership agreements and other business structures utilize business contracts today that still look to our Courts to resolve business differences. Sometimes this occurs because of the omission of considering owners or operating members will always get along and agree. However, it is common knowledge that our Courts are too overburdened, underfunded and understaffed to address many of the needs of the population in a timely and cost-effective manner (especially non-criminal matters). Depending on the Courts, the delay for a case to be heard may be significant, extending over years. The Court’s dwindling and overstretched resources simply cannot meet the needs of our increasingly litigious society and our constitution that mandated times for criminal matters to be heard or be dismissed. Therefore we must look to other venues to quickly resolve our differences.


Mediation and arbitration services are wonderful alternatives that have been utilized by business professionals for over 30 years. These alternative dispute resolution methods not only allow parties to be proactively involved in crafting and developing their own solutions, but also gives them the flexibility to select mediators or arbitrators with relevant experience and expertise in their specific field of dispute.  Mediation and arbitration services may be used as the sole method of dispute resolution, or as the first attempt at finding a solution to a dispute prior to engaging in full blown and costly litigation.


Be sure to watch out for the next in this series of blogs about mediation and arbitration and the differences between the two, as well as some examples of disputes that are now being heard and addressed in this forum, such as matters involving Accountable Care Organizations and the Affordable Care Act.