Contact Us

How Mediation Can Save Your Succession Plan

  • By  Scott D. Calhoun
  • |
  • April 24, 2018

Imagine the following scenario. As a business owner contemplating a succession plan, you sat down with your advisors, put together a plan, and began to implement the succession of your business.

Your plan focused on locating an experienced advisor looking to expand her business, bringing her on board so that she has the opportunity to meet your clients and learn your systems and procedures. You located the perfect candidate, brought her in, and began to integrate her into the firm. Things were looking good.

Then small problems started to develop. Your designated successor has not connected well with your clients. She has been spending a lot of time trying to learn your systems, which is admirable, but ultimately is less important to the long-term success of the business than client relationships.

When you have tried to offer constructive criticism, she has become defensive. From her perspective, you have not provided enough help in the transition with clients, and she is concerned that she will not be compensated at the level she expected when she made the major career move to join your firm.

What happens now?

You have invested a lot of time and effort in making this succession plan work. You are convinced that your chosen successor can be the right person. She wants to succeed and she believes that ultimately the business will thrive. But tensions are increasing by the day, and the situation will deteriorate into failure unless things change.

When to Embrace Mediation

Mediation can be remarkably helpful in achieving a positive outcome in circumstances like these. A good mediator can work with both sides, help them understand the concerns of the other, and allow them to find solutions that will work for them. After all, both sides sincerely want the plan to succeed. They just need some assistance to get there, and mediation can provide just the boost that is necessary.

Choosing a Mediator

You should use care selecting the mediator. You want someone who is experienced with business issues, and someone who is skilled at helping to keep emotions in check and finding creative solutions.

The right mediator will work with both sides to determine what issues are most important and help find alternatives that address those issues in ways that are designed to achieve goals for both sides.

Succession planning is crucially important and involves a lot of hard work and commitment. But most succession plans involve personalities, transitions, and emotions. These factors can lead to conflict – but conflict does not have to lead to failure.

In the right circumstances, mediation can save your succession plan. If you need help navigating any challenges within your firm, let’s chat.

Are you just getting by or are you getting better? Get started today!

Author Bio

Scott serves as Ironstone’s legal counsel and has more than 25 years’ experience in corporate law. He has a broad base of experience in the formation and structuring of all types of business entities and non-profit organizations as well as in mergers and acquisitions. Scott advises clients on a full range of business matters, including business entity formation, securities offerings, trademark registration and related agreements, lease negotiations, stock or asset acquisitions, employment agreements, partnership agreements, franchise agreements and related issues, secured lending or other financial transactions, shareholder agreements, and LLC operating agreements. Mr. Calhoun also has significant experience with estate planning, wills and trust drafting, and estate administration. Mr. Calhoun has served as general corporate counsel for a large number of small and medium size businesses. As corporate counsel, he advises clients on the full range of business legal matters described above, and he also consults on general business issues faced by those clients. His counsel also includes planning and implementation advice concerning asset protection and business succession issues, which often entails proper use of trusts and other planning vehicles. In the broader area of estate planning, Scott has significant experience with estate tax matters, drafting of wills, life insurance trusts, and other estate planning documents, and estate administration.