Lessons from my toxic business partners & legal conflicts

The best way to avenge yourself is to not be like that - Marcus Aurelius, Meditations 6.6.

If you’re in a legal business conflict it’s easy to enter a “war” mindset once litigation and legal threats commence. This is especially true once there is a total breakdown of communication and messages start only going through attorneys. In these states, the war mindset usually takes you from looking for win-win outcomes to win-lose scenarios. Instead, you seek outcomes where you can maximize your party’s gain and advantage. However, even if you are able to attain a winner takes all outcome it is still sometimes worthwhile not to choose that. Instead, when you know you hold the winning cards it can still be worth deescalating the situation and choosing to find a fair win-win deal. I’ve done and experienced both… taking a win-all deal because I could, and in another situation electing to lower my advantage despite having a win-all possibility.

In my first legal battle I had a clear “win” option. So, I took it...

In this case, this was for an early-stage company that was quickly growing. From what in retrospect was a simple misunderstanding and miscommunication, one of our co-founders had suddenly escalated a small disagreement to a legal battle. Upon doing this they closed off all normal conversations and made the decision to only communicate through attorneys. This was in my early 20s with an intimidating successful partner. So, I was of course terrified. This battle was costing me money and preventing me access to the money the business was generating. With the financial, and legal pressures, I found ways to guarantee a legal win for my partners and me. Not considering the option to instead de-escalate the situation, we took the winner takes all option very swiftly. This was a great decision short-term. To this day, financially, I would say it was the correct decision. However, ethically I hold some guilt for not keeping cool and trying to de-escalate the situation to instead propose a fair deal. Had I done that we all would have realized the issues stemmed from simple misunderstandings that could have been resolved calmly and with everyone winning. We could have also benefitted more from the synergy of each other's efforts. Instead, we all entered “war mode” as a result of being reactionary to scary, costly legal threats.

My next big conflict was with a partner that was straight-up malicious. This one was no case of misunderstanding.

This partner had gone to lengths to misuse our trust and their privileges to commit fraud against me and my other partners. Discovering this, I was enraged - as anyone would be. We quickly went into legal threats and everyone used their best lawyers to get started. At this time we were finding an abundance of evidence for plans to steal from the company. So, we were entering “war mode” again. However, having had cognitive dissonance since my last legal battle where I entered war mode and took the winner-takes-all situation, I instead decided to try to de-escalate this one. This led to me texting the rogue partner (who had stone-walled us behind their attorney) a genuine, heartfelt message about how we all felt about the situation. Whereas before we would have continued attorney-attorney communication and snowballed the situation.

So, what happened after the de-escalation text?

The rogue partner stopped their “war mode” too and actually sent a heartfelt apology.

More than that, this triggered the other partners to suddenly flip from being ready to “destroy them in court”, to be open to all sorts of negotiations. Sending that text had reset our relationship. In that text, I simply told the partner about how we all started together, why we chose to work together, what our expectations were of each other, and how none of us could figure out when and what changed for that partner to flip on us. We then all got on a call and talked through things, human to human. As before this we were talking attorney-attorney this was very refreshing. We understood better what the other party's perspective was, and they in turn empathized more with us. This led to the rogue partner giving genuine apologies to all of us, and accepting the repercussions of their actions from what we collectively agreed as the next, fairest steps.

How do I feel now about everything now?

While I have strong negative feelings toward my partner who betrayed our trust, I also have massive respect and love for them for being able to apologize and open up communications. I have no negativity or cognitive dissonance about how it ended, I actually feel great about it. We all walked away with a middle-ground resolution for an unfortunate situation. Yes did something reprehensible, but instead of allowing negative emotion to take charge and ruling our lives with months worth of litigation, we came to a fair, quick resolution.

All in all, I’m very happy that we learned from our previous disputes and decided to choose the less aggressive win scenario. I know I am mentally better off for it, as are my partners and the rogue party too. To anyone else out there that's about to enter, or is already in litigation, consider taking the Human approach. Open up normal conversations, communicate calmly and see if you can come to some sort of understanding.

How much better to heal than seek revenge from injury. Vengeance wastes a lot of time and exposes you to many more injuries than the first that sparked it. Anger always outlasts hurt. Best to take the opposite course. Would anyone think it normal to return a kick to a mule or bite to a dog? - Seneca, On Anger 3.27.2

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