Partnership Dispute

Background

The starting point of the mediator’s involvement was a call from a partner about a board dispute, and the ‘problem behaviour’ of one partner who was on the one hand threatening to leave and take business with him and on the other hand wanting to put his hat in the ring as the next CEO. His behaviour was regarded by the other partners as disruptive and verging on bullying. 

The mediator began by speaking to each partner separately. Each 1:1 gathered the partner’s view on the cause of the conflict, the issues affecting the executive team performance and what change they wanted to see. The mediator then prepared a report on the issues that emerged and presented his findings at a meeting he facilitated with the partnership team. 

The issues were explored in three facilitated sessions of the 12 partners. The difference between this mediation and a team-build event was that the mediator had to initially focus on three critical issues – firstly, creating the conditions for the partners to be able to talk to and work with each other in this crisis period; secondly, facilitating extremely difficult discussions that explored the ‘problem’ partner’s behaviour, his motives, their frustrations about his behaviour, and his frustration about not being rewarded for being the greatest contributor to revenue and profitability; and thirdly, how to define, recognise and reward individual partner contribution.

Outcome

As a result of the facilitated sessions the partners returned to a functioning team, and the discussions progressed to agreeing changes to the firm’s strategy and performance management requirements. The partnership team understood what had been driving the ‘problem’ partner’s behaviour, and as a result the current CEO stepped down and the ‘problem’ partner was appointed as the new CEO. Through an investment of 21 hours of intervention a break-up of the partnership and consequent commercial dispute were avoided. The continuation of the business meant that several hundred jobs were saved.  

Three years on, the incumbent CEO reported back: ‘Without mediation we wouldn’t have survived. We’re now in a position where the firm has strong, decisive leadership and my main “opponent” among the partners at the time of the mediation is now my biggest supporter. Financially, turnover has increased from £10m+ to £12.7m but we’re massively more profitable – indeed this year has been the most profitable year ever for the Equity Partners.’