Factors to Consider When Choosing a Business Partner Dispute Attorney
A business partner can be a great asset and can supplement entrepreneurs with skills and acumen to run the business. It is always a good idea to consult your partner in major decisions. This builds trust and provides synergy to your business. However, the situation is not always amicable, and you may run into disagreements that may harm your business. In such cases, when a business dispute arises, it is always better to hire an attorney who can ideally settle disputes through mediation and negotiation rather than escalating them to litigation.
This article provides a comprehensive guide to choosing the right business partner dispute attorney and explains complex legal terms related to the disputes.
What is a Partnership Dispute Attorney?
A business partnership dispute can be any disagreement related to the running of a business, ranging from the vision to profit sharing to role descriptions. For instance when business partners disagree over profit sharing ,any one of them hires a business partner dispute attorney to resolve the conflict and protect the rights.
While it’s never a good idea to go all guns blazing at your partner over disputes, consulting an attorney early can save you considerable legal costs. An attorney will help you navigate the dispute with mediation, arbitration, and negotiation before taking up litigation.
Precise legal advice can ensure a strong legal foundation for your partnership, and it helps to overcome any storm. Working with a good business litigation attorney can work wonders and, in the worst-case scenario, can save your business from falling apart.
Note: A partnership dispute attorney is a legal practitioner specializing in resolving legal disputes related to partnership agreements.
How do I choose the right Business Partner Dispute attorney?
Choosing the right business litigation attorney is no less important than choosing your business partner. A good dispute lawyer will nip the issue in the bud before even moving to negotiation or worse. They will guide the partner in resolving the issue without disrupting the operations and preventing a strained relationship. Some of the important factors to consider include:
- Experience and Specialization – The more experience, the better, unless the attorney is not updated on recent partnership laws. Since partnership disputes are fairly common, one can easily find attorneys specializing in them. Before hiring, asking questions about recent similar cases would be a good idea. If a specialized attorney is hard to come by, go with the one who specializes in corporate cases.
- Legal Strategy and Approach – No one size fits all for a business dispute, as they can be very unique. An attorney needs to provide a different approach for each dispute and, therefore, should be highly skilled in making a strategy as per the requirements of each case. While this is difficult to assess, past cases of the attorney can throw light on this. An attorney should have good critical thinking, analytical reasoning, and research skills, as they help make a good strategy.
- Reputation and References – A Business litigation attorney’s reputation matters. It is important to hire attorneys who provide advice in good faith. Asking for references can be a good idea to assess how well the attorney was able to resolve disputes in the past. It also provides an idea of the professionalism of a particular attorney.
- Communication Skills – Strong communication skills are an important asset for an attorney to represent a client, negotiate a settlement, and convince judges/juries. It helps the attorney to explain complex legal terms and situations to the clients. Furthermore, it helps manage expectations in partnership disputes.
- Conflict Resolution Skills – Avoiding conflict in a dispute is winning half the battle. Sometimes, partners may make emotional decisions and inflate the conflict. An attorney with good conflict resolution skills can avoid this. Moreover, since an attorney will act professionally in such situations, they will provide a better resolution. Another reason to hire an attorney is to avoid making any emotional decisions.
- Fee Structure and Transparency – Attorneys can be pretty expensive to come by, but the cost of the attorney should not be a major consideration because partnership disputes, if unresolved, can be much more expensive. Transparency in the fee structure and how the attorney manages expectations without promising to work wonders can provide a fair idea of professionalism.
Common Types of Partner Disputes an Attorney Handles
Attorneys are generally versatile and can handle a variety of tasks required in disputes and legal matters. However, some of the most important disputes that an attorney needs to address in a partnership dispute are:
- Breach of fiduciary duty claims: This is one of the common claims when partners may act at the detriment of others. For example, engaging in a business transaction for one’s personal gain or pursuing a sale as an individual rather than as a partnership.
- Misappropriation of business funds or opportunities: Using business funds for personal gains, for example, billing fuel to the business when it was mostly used for personal travel. Another common example is using business funds for personal use or using those funds to make a profit outside the partnership.
- Disagreements over profit distributions or compensation: Partners should make sure that profit distribution is carried out as per agreement. Any deviations need to be addressed early on to avoid souring relationships. Another good reason to consult an attorney.
- Decision-making deadlocks: Sometimes partners may have different views on, say, expanding to new markets. One would like to move forward to increase revenue, while the other may not want to do so due to the risks involved. A deadlock does not bode well, and a third party, such as a market research analyst, can be consulted.
- Operational conflicts and management disputes: These disputes can include disagreements related to resource allocation, budgeting for different departments, or even working styles. This can affect operations and jeopardize the operations affecting all partners.
- Ownership percentage disagreements :This can happen when the partnership agreement is not clear, has ambiguous terms, or ownership percentages are not mentioned. While this may not be worrisome when it starts off but disagreements are common later on when a business expands. A good attorney will help to draft a clear agreement to avoid any conflict that may affect the business.
- Intellectual property ownership conflicts: It is common now, more so in the tech sector, that partnerships are made out of intellectual property, as was the case with Facebook. This could create an issue if one of the founders claims sole ownership or ownership percentages not agreed upon earlier.
- Non-compete violations: A partner may choose to start a similar business that shares the same market, potentially decreasing the customer base. Such disagreements are common, and the other partner(s) may enforce non-compete clauses.
- Partnership dissolution and business valuation disputes: Business valuations are highly subjective, and assumptions can create partnership disputes. This usually happens when one wants to exit and sell off. One of the best practices is to onboard an independent attorney agreed upon by all stakeholders.
Smart Decisions With Eqvista to Safeguard Your Partnership!
One of the best approaches to disputes is to sort them out before they create a wedge between partners. Hiring an attorney early on can save significant costs, time, and effort that can be well spent on managing and expanding the business. Choosing the right attorney is equally important. An expert business partner dispute attorney knows how to navigate the dispute before it reaches court. One of the ways it can be done is to include a mandatory alternative dispute resolution (ADR), which will avoid or at least postpone any litigation.
Eqvista offers litigation support that can provide some of the best business attorneys for your business. The litigation support is comprehensive, with certified valuation analysts who provide appropriate valuation based on best industry practices. The analyst can also serve as an expert witness in a case of litigation.
