Murray Beith Murray Private Client Partner, Peter Shand, writes in The Scotsman today. Read the full article below, republished by kind permission of The Scotsman:

It’s Valentine’s Day, a traditional celebration of romance and you may well have given or received a box of chocolates this morning to mark the occasion.

It could well be that those chocolates were manufactured by Thorntons, a much-loved upmarket UK brand, but one with a salutary backstory for family businesses.

Given what today stands for, it is indeed a pity that love and understanding were in such short supply in the Thorntons sorry tale. You need look no further than that company itself for a classic case study into what can happen when sibling rivalry kicks in and the resulting devastating outcome and impact that can have on all concerned.

The Thorntons story, reportedly, includes everything to make a professional adviser shudder, from role rivalry and squabbles between brothers – throw in a cousin for good measure too – and inter-generational conflicts. Inevitably, this sorry saga ended up in that all too familiar ‘boardroom coup’ and a bitter departure for one brother, a scenario where quite frankly nobody wins.

I suppose the key question is whether or not all family businesses are fated to go the same way and I wish I could give a more reassuring answer to that. The default position for a family business dispute is invariably an adversarial approach between the protaganists – in a sporting analogy, everybody heads to their own end of the ground.

It can often be sparked by sibling competitiveness with age, perceived parental favouritism and poorly thought out and executed succession the root causes. Scenarios can be further complicated if spouses enter the fray adding to the head-scratchingly difficult spider’s web effect of issues. Governance problems caused by the founder’s unwillingness to let go or to address their offsprings’ failings make matters harder to resolve.

Legal training is all about providing answers and solutions and as a profession we, as lawyers, tend to be prescriptive in our problem solving and our dealings with clients. Over time it has also become entirely what they expect of us. Communication between all parties, including lawyers, is of paramount importance and it is extremely frustrating for advisers to find out at a later date what the actual issues and causes of a dispute involved. Better all round communication means those often complex issues could be more effectively handled and resolved at the time of the dispute, if they were openly discussed and aired. Easy to say and easy to do, if mindsets change.

Perhaps a more consultative approach might lead to better results and you just need to think of medical professionals who nowadays often ask their patients what treatment route they would like to follow. So, if they can do it, why can’t lawyers? Rudyard Kipling’s six honest serving men spring to mind, the questions ‘what, why, when, how, where and who’ were, he says, all designed to ensure better understanding. You won’t find many correct solutions if a myriad of problems are misunderstood at the outset.

Mediation in family disputes is a much better solution as arguments rage and positions inevitably become ever more entrenched if grievances aren’t aired. Sitting in the middle, the unfortunate professional adviser needs to channel their inner Kipling and do more asking and less telling to avoid dictating the conclusion for clients, often based on experiences gained in other unrelated cases. It is indeed much better if warring boardroom factions reach their own settlements nudged along and encouraged by appropriate facilitation and guidance.

This is a different professional approach for lawyers whose training has probably been all about presenting solutions. However, this is not a new idea as Abraham Lincoln once said: “As a peacemaker the lawyer has superior opportunity of being a good man.” Some might argue against that, but we need to listen to and act on such sage advice.

As an accredited mediator, as well as a lawyer, I have adapted my approach to ask key questions in an effort to shift the dynamics in any family dispute. Those include questions to establish what each party wants out of the dispute and also what happens if both sides cannot come to a settlement. Negotiated agreements will always provide better short and long-term benefits for a business.

Family Business Lawyers, Edinburgh

Peter Shand is an experienced family business lawyer and authoritative voice on delivering bespoke and integrated advice to business families.

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