Arizona Business Laws

Mindset in Deals versus Litigation

Hello, I’m Michelle Lombino, a partner at Jaburg & Wilk, and a business lawyer and certified understanding-based mediator. Are There Differences in Clients’ Mindsets in Deals Vs. Litigation?Frequently when people are entering into deals, the positive mindset dominates. They’re very eager, they’re very excited to get the deal done. They’re willing to compromise with the other party. But at the same time– oftentimes that is, they will rush through things they don’t want to confront or address issues that they fear might derail their deal.

Drawbacks to Positive Thinking in Legal Transaction

It is fashionable to tap the virtues of the positive mind; and the positive mind is beneficial. It focuses on what works, on results, it’s action oriented. But if the positive mind dominates, parties may be easily fooled. They may not consider the risks or the potential pitfalls of a problem. Over the years I’ve been involved in many a litigation involving Ponzi schemes, and I’ve though that those Ponzi schemes might be the result of the positive mind dominating.

Benefits to Negative Mind

Yes, at its best, the negative mind sees the risks and potential downfall of a situation. However, taken to its extreme, the negative mind can lead to anger, intolerance, and a sense of frustration. Many a settlement negotiation has fallen apart because the negative mind has predominated.

Clients Help Themselves by changing their mindset

Yes, first by recognizing the benefit of using both the positive mind and the negative mind, and using both approaches. And second, by cultivating a neutral mind that can consider both what could go right and what could go wrong, and from that place deciding the best approach.

 By: Michelle Lombino

My name is Neal Bookspan. I’m a partner at Jaburg and Wilk. I help my clients manage their legal risks in the area of litigation, transactional work, and creditor’s rights.

What is an Alternative Dispute Resolution?

Here in Arizona, our superior state court has an alternative dispute resolution department. And what that is, it’s about trying to get cases resolved in some manner.   When it comes to state court it involves settlement conferences but it also can mean mediation, arbitration, and then there’s a whole bunch of different variances of these type of situations. And what it is, is it’s a method for parties to try to take control of their disputes and get them resolved in a manner that is hopefully more efficient, less expensive, and lets them move on in their business.

What are mediation and arbitration?

A lot of people get mediation and arbitration confused. Mediation is where you use a neutral third party to help resolve or settle a dispute. It would also be referred to as shuttle diplomacy. Usually parties are put into separate conference rooms and the mediator shuttles between these room trying to help people resolve their disputes.   Arbitration is where you use a third party to serve as a judge. These people usually are retired judges or a very experienced practicing attorney. And what they do is they actually serve as the judge. It is a much more informal proceeding. It is usually held in a conference room and – while it has all the seriousness of a real trial in front of a judge, and the same results – it usually can be done in a manner that will make it happen faster than you can get to trial in court, hopefully, less expensively. And they’re also other possibilities including making it a binding arbitration so that no one can appeal and there’s finality. Which even when parties aren’t happy with the decision, it at least allows them to move on and move forward from the dispute.

By: Neal Bookspan

My name is Neal Bookspan. I’m a partner at Jaburg and Wilk. I help my clients manage their legal risks in the area of litigation, transactional work, and creditors’ rights.

Is it possible to diffuse the tension and emotional nature of a dispute between business partners?

It is possible to diffuse the tension between a partnership or what we’d call a almost corporate divorce situation. In these situations you’ve got shareholders or members at odds and entities. It can affect the day to day running of a business. It can affect employees, customers. And one of the things that you have to look at is when you get a lawyer involved it helps take the tension and emotion out of the situation because you’ve got a third party who is removed form the dispute itself who can look at things with a clear eye and business judgement to help advise the client in a manner in which will healthfully help put things on a business level and not a personal level.

Is it really possible for a client to avoid expensive and extended litigation?

It is possible for a client to avoid extended and expensive litigation sometimes. Any litigation is very lengthy and expensive no matter how you look at it. But there are ways to try and resolve disputes early on and try and avoid the situations that result in endless amounts of cash being spent and fees being incurred. A lot of times what I utilize with clients at this point is pre-litigation mediation, either formal or informal settlement and mediation talks, anything to try and resolve the situation. Or come to some type of partial settlement that will help streamline the litigation, make it shorter, and hopefully reduce expenses for not only our clients but all the parties which always helps matters get resolved.

By: Neal Bookspan