Published: December 8, 2011
See How Mediation Saved This Business $150,000
For some reason people have the mistaken belief that mediation is only for dissolution of marriages and child custody issues. I suppose there are several reasons why this seems to be true. First, most courts force dissolution of marriages 
and child custody issues to go to a mediator before the parties can go to trial, which is a good thing. Second, dissolution of marriages and child custody issues are extremely expensive and since both the husband and wife are normally each paying an attorney exorbitant fees, all of which depletes their marital assets, mediation is a far less expensive and time sensitive alternative, which also is a good thing. Third, it does seem like dissolution of marriages and child custody issues are the most mediated cases, because many times an independent third party, usually a Marriage and Family Counselor or Psychologist has a relationship with a mediator and will send his or her failed cases to that mediator, again a good thing.
However, there are so many other cases for which mediation is a far better alternative to litigation or even arbitration. Let me give you one example of just such a case. My partner and I recently mediated a matter involving a California LLC. The three members, each of whom were also Managing Members, and who were the closest of friends when they started their business, realized after two years, they were just not happy with one another. This in spite of the fact their two year old business was bringing in $2MM in annual revenue. I was contacted and provided with the facts and I asked about the LLC Operating Agreement (OA). I was told the OA was one page long. Now as a practicing transactional lawyer my OA(s) are between 20-40 pages long, so I knew one page was going to cause a problem. Sure enough there was a one line buy-out provision for five years from inception and an ambiguous sentence dealing with LLC issues, including salaries, which was the most contentious issue between these, one time, three great friends. One of them had decided to double his salary over the other two.
The members decided to mediate the issue of their salaries, but rather do it in the traditional way, have an agreement between them that the mediators would make recommendations and they would agree to follow those recommendations. What a novel idea! We completed the mediation and I ended up writing a six page recommendation the partners stood by. Subsequently, the three members asked me and my partner to mediate a proper OA, the one that they should have had from day one.
So, instead of hiring three attorneys to represent them in a contentious lawsuit which under all their circumstances would have cost each of them in excess of $50K, they were able to get what they wanted through what turned out to be three mediation sessions for $13K.
The moral to this story is simple. First, when starting an LLC, no matter who it is with, make sure everything is in proper written form and done by an attorney. Second, if you have issues, don't jump immediately into litigation or arbitration, but instead try to agree on mediation. It will save you money, time, possibly relationships and the best part is, you will be the decision maker, not a stranger wearing a black robe, or a stranger who knows nothing about you and the other party(s).
Mr. Eichberg is an Attorney practicing law in the greater Los Angeles area since 1978. He has practiced business law with an emphasis on representation of large and small corporations Limited Liability Companies, General Partnerships, Limited Partnerships and sole proprietorships. Mr. Eichberg has extensive knowledge of, and has worked on, almost every type of transactional matter, from simple contracts to complex real estate transactions and intellectual property matters. He has developed his own commercial leases as well as negotiated over one thousand (1000) leases for large and small businesses. For more information about Mr. Eichberg's practice, please visit:
[http://www.scmp-mediation.com]
Article Source: https://EzineArticles.com/expert/Steven_J_Eichberg/1158020
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