by dr Andrzej Jakubiec - adwokat, mediatorEscalation of Conflict Between Business Partners – a real Scenario
How does a dispute between partners escalate? There are many possibilities of conflict escalation. Today, I want to present one potential scenario. Why? Because I am a lawyer and mediator advising business partners in high-conflict situations. This illustrates the consequences of acting in anger and persistence. I do not want to scare anyone. I want to help you avoid what I have often seen. Why does this matter to me? I believe we must care for Polish business. It is the engine of our economy and our prosperity. In this article, you will learn how the “point of no return” is crossed. You will also learn how to save the company when emotions take over.
Conflict escalation. What are the causes of disputes between partners?
A conflict can escalate regardless of its original cause. Money is rarely the main reason for disputes and conflict escalation. More often, it is about respect or agency. It is about realizing a vision or different risk tolerance. Sometimes it concerns nepotism or financing methods, such as debt aversion. Often, there is no single cause. Partners notice the dispute only when many interests collide.
In my work as a lawyer and mediator, I have seen how conflicts between business partners escalate from minor disagreements into destructive disputes that threaten the entire company. This article is based on those real-life observations.
I discussed the causes of partner disputes in this podcast episode: https://open.spotify.com/episode/4p20ALoBzNcmzQ0W2otf0e?si=TlCfbdvUQ0mCwCCmEtai2A
How does a conflict begin?
Initial differences are often viewed through the lens of the fundamental attribution error. I wrote more about it here: https://jakubieciwspolnicy.pl/podstawowy-blad-atrybucji-w-pracy-adwokata/ and here https://jakubieciwspolnicy.pl/podstawowy-blad-atrybucji-w-sporach-rodzinnych/
In short, people tend to blame negative internal traits for someone’s behavior. We call others “fools” or “greedy” instead of looking at external causes. This is simply easier. It also makes us feel like the “good” and “wise” partner.
This attitude has a dangerous effect. A substantive dispute turns into a conflict of values. One must not yield to “evil” or “greed.” This would be a betrayal of ideals. We trap ourselves in a corner. We lose the flexibility needed for an agreement. The escalation then becomes faster and more violent. Both partners often sit on a powder keg for years.
This is the Moore’s Circle of Conflict. I asked ChatGPT to create this graphic.
How does a dispute explode?
A “proxy” dispute may erupt first. One partner may contest the work of the other partner’s wife. They might complain about her salary or performance to other employees. This creates a heavy atmosphere immediately.
Such news spreads through the company like wildfire. Eventually, the partner and his wife find out. How will they react? She might resign. The partner might defend her publicly or remain silent. It is unlikely they will seek a mediator or business psychologist yet. They usually try to handle it alone.
The partner considers his move…
The partner will think about how to retaliate. Perhaps he will block dividend payments. He might ask ChatGPT for advice on this. The AI might suggest seeing a lawyer.
The other partner is building a house and needs the money. Blocking the funds is framed as “caring for the firm.” In reality, the house construction stopped. The money is needed for a child’s cancer treatment. The partners have not spoken for a long time.
This problem was not the AI tool. The partner only sought confirmation of his own idea. He did not analyze the consequences or alternatives.
Manifestation and escalation of conflict
Eventually, an explosion occurs. Partners shout and trade heavy accusations. It is not a constructive talk. They bring up past incompetence, malice, or dishonesty.
Each partner seeks advice from lawyers. These lawyers often suggest escalatory solutions. They believe in their clients’ rightness. They want what is best for them.
This leads to blocking payments and firing relatives. They dispute the use of trademarks or company cars. The first case goes to court regarding the dividend. A hearing is set for 12 months later.
No one wants to wait that long. A court verdict will not solve the core issue. It will only trigger a desire for revenge. Partners then start pulling employees to their side. They probe key clients about a potential split. Most energy is spent on harming the other side.
The role of advisors in conflict
I compare misused AI models to lawyers who follow client goals without reflection. It is like a patient demanding a heart transplant without an exam. A good advisor should examine the situation first.
Many people seek legal advice only to confirm their assumptions. They do not want an analysis of alternative paths.
What are the effects of conflict escalation?
Escalation brings destruction. Decision paralysis consumes the company. Soon, the first employees leave. They do not give a reason. Partners do not realize that loyalty conflicts destroy morale.
Efficiency and quality drop. Key clients leave for the competition. The bank cancels loans due to lost liquidity. Within a year, the company faces bankruptcy. It collapses like a house of cards. Additionally, tax authorities begin an audit of management contracts.
Could the escalation have been avoided?
Disputes are natural in every relationship. However, you can prevent a dispute from becoming a destructive conflict. This happens when we stop blaming the person and look at the circumstances.
This scenario lacked a dialogue and an understanding of needs. Partners should seek a mediator early. In this example, they should have acted right after the first big fight. Instead, they went to lawyers and demanded war.
We cannot blame the lawyers entirely. Many see professionalism as merely following client orders. I have a different approach. I discuss whether the chosen direction is truly good. This is the moment to save millions of zlotys and years of work.
Recommended Reading
For those interested in conflict structure, I recommend “The Strategy of Conflict” by Thomas Schelling. For dispute resolution, read “The Mediation Process” by Christopher Moore. These books show how hard it is to stop escalation.
If your business relationships are failing, contact us. We help clients avoid the scenarios described above. Many companies end this way. We treat court cases as a last resort. We prioritize dialogue, negotiation, and mediation.
Contact us: 📩 kancelaria@jakubieciwspolnicy.pl 📞 +48 536 270 935
by dr Andrzej Jakubiec - adwokat, mediatorNegotiations Between Partners: How to Resolve Internal Disputes?
Why Partner Negotiations Matter?
Negotiations between partners matter. Partners do not always agree on how to run a business. It is natural that there are differences of opinion regarding strategic decisions, profit sharing, or the role of individual partners. The key is not whether there will be friction, but how we deal with it. Whether we handle it skillfully or allow it to escalate into a conflict that can weaken, destroy the common business, or permanently harm one of the partners.
Risks of Court Disputes in Internal Business Conflicts
Courts as a Last Resort
What to do when a dispute arises? Of course, the “hard” solutions in the Code are a last resort. Involving the court in resolving an internal conflict is often ineffective. It takes time, energy, and costs — and the result is distant and uncertain. Most importantly, a court dispute frequently escalates tension because a court’s role is not to find a solution satisfactory to the parties. But to decide who is right, often in a zero-one way. This can also lead to significant image losses and further tension within the company. Especially in family businesses and closely-held partnerships.
The Power of Negotiation
Why Talk Instead of Litigate
The answer to resolving partner disputes is deceptively simple and often rejected automatically: we have to talk. Conversation and negotiation are not signs of weakness but of courage, maturity, and responsibility. Negotiations show openness to the other party’s interests, potentially generating reciprocity. They allow parties to attempt a joint solutioninstead of adopting a confrontational stance.
Negotiations can be tough and effective at the same time, but they always allow parties to express themselves and present their actual interests, which are usually much deeper than initial positions.
Benefits of Negotiated Agreements
Through negotiation, an agreement worked out jointly by the parties can be reached. Unlike an imposed court verdict — which inherently involves one party feeling “wronged” — negotiations solve the problem collaboratively. This gives each party a sense of ownership and responsibility for implementation, and it avoids revenge attitudes that often occur after court proceedings.
Effective Negotiations: Professional Support and Strategy
Role of Lawyers and Advisors
Negotiations are an art and — contrary to popular belief — do not rely on simple haggling. To negotiate effectively, it is valuable to use the help of a professional — such as a lawyer — who can help prepare for the meeting, support the talks, or even conduct them directly.
Professional advisors can help clarify legal issues, identify strengths and weaknesses in positions, and shape negotiation strategy. Their role is not to impose their views, but to help the parties achieve their goals.
For more detailed methods of avoiding and resolving disputes among partners, see this practical guide on negotiations and conflict management in Polish: https://www.inforlex.pl/dok/tresc,I02.2022.046.183000502,Raport-o-sporach-wspolnikow-Wnioski-z-analizy-tysiaca-orzeczen-sadow-powszechnych.html
Step-by-Step Negotiations between partners framework
Step 1: Prepare Thoroughly for Negotiations
Preparation is critical. It is estimated that at least half of professional negotiation time is spent on preparation. Identify the goals to be achieved, gather information about the other party, and define a strategy that takes into account both interests and possible scenarios.
This may include understanding concepts such as Zone of Possible Agreement (ZOPA) — the range where rational agreement is feasible — and knowing your BATNA (Best Alternative to a Negotiated Agreement). Wikip
Step 2: Find Common Ground
During negotiations, focus on common points and solutions that can satisfy both sides. Use arguments based on facts and figures to support your position and build credibility.
Step 3: Seek a Meaningful Compromise
If negotiations do not go as planned, seek a compromise. Do not concede on all issues, but avoid rigid insistence on every point. Remember that negotiation is a process of exchange, seeking asymmetries where possible and valuable.
Smart concessions — exchanges designed to further your goals while showing flexibility — can build trust and move discussions forward without compromising key interests. MAcceler
Step 4: Communicate Effectively
Communication is key. Listen carefully and ensure you clearly understand your partners’ positions. Clarify anything that is unclear. Pay attention not only to words but also to tone of voice and body language, which affect how messages are received.
Effective communication is essential to disagree without destroying professional relationships, as highlighted by experts in Forbes.
Step 5: Utilize Legal Support During Negotiations
A lawyer can play a crucial role during negotiations. He can help to clarify legal aspects, suggest issues to raise, and propose compromise solutions. A law firm’s support can range from advisory to active facilitation.
Alternatives and Complementary Strategies
When Negotiations Need Extra Help
Sometimes negotiations benefit from neutral third-party involvement — such as mediation or an impartial facilitator — especially if emotions are strong or direct talks stall. Third parties can offer fresh perspectives and help find common ground. Partnership for Transparency
For more on alternative dispute resolution techniques, including mediation vs negotiation, see this comprehensive external resource: 👉 Conflict Resolution Best Practices for Business Partnerships (English) Partnership for
You want to read more? You’re welcome here: https://www.pon.harvard.edu/daily/dispute-resolution/managing-conflict-in-house/
Summary: Negotiations between partners as Conflict Management
Effective negotiations between partners are challenging but essential for reaching compromise and avoiding conflict. Preparation, communication, finding common ground, seeking compromise, and appropriate professional support are the pillars of successful negotiation.
Involving the court should always remain the last resort. A court case is expensive, time-consuming, and uncertain. It decides who is right but rarely deals with the deep-seated causes of conflict. The true motivations and interests that underlie disputes are often inaccessible to a court, but negotiable at the table.
Negotiations between partners: Internal Links to my articles in polish
- Co robić, gdy druga strona nie chce rozmawiać? https://jakubieciwspolnicy.pl/narzucenie-rozwiazania/
- Jakie są przyczyny konfliktów w firmach rodzinnych? https://jakubieciwspolnicy.pl/spory-w-firmach-rodzinnych-jakie-sa-ich-przyczyny/
Talk Before the Conflict Escalates
If you are facing a dispute between partners, early negotiation support can significantly reduce risks and costs. Professional preparation and structured negotiations often allow partners to protect the business, their relationships, and their reputation.
Contact us to discuss your situation confidentially:
📩 Email: kancelaria@jakubieciwspolnicy.pl
📞 Phone: +48 536 270 935
Our law firm supports partners at every stage of negotiations. We prepare the strategy to active participation in talks or leading negotiations on behalf of clients.