Tag: barrister

Avoiding the pitfalls when in business with a partner, shareholder or director

Andrew Marsden

Starting a new business venture is an exciting time, yet like any relationship, the journey often presents challenges.

In my work as a specialist barrister dealing with shareholder/director and partnership disputes, I often see problems that, with just a little bit more planning and forethought, could have easily been avoided. 

The benefits of working in a bigger business are many. These benefits include sharing pressures and responsibilities, the opportunity to pool resources, and the chance to combine skills, experience and talent. 

Doing so can really raise the bar beyond that which might be achieved through a solo venture. But going into business with others certainly does come with its own set of challenges.

While many relationships are born quickly from shared passions and enthusiasm for a business idea, far fewer are able to stand the test of time. I specialise in resolving disputes between those in business together who have fallen out for one reason or another. 

Very often, things aren’t helped by the fact that solid foundations have not been set to meet the challenges that working together can entail.

So, before you dive into a new business relationship, first make sure you’ve got the fundamentals in place.  Trade through a limited company or, perhaps, a limited liability partnership. 

Ensure you have suitable articles of association and a sensible shareholders’ or members’ agreement. 

Make sure your understanding of the respective rights of participation in management and conduct of the business is recorded and enshrined. 

Make provision for access to all books, records, accounts and other information that might be required. 

Agree on salary entitlements and dividend policies. Consider the merits of “good/bad leaver” provisions and “put/call” and “follow me” options. 

Formalise an effective and efficient process for dispute resolution. 

Strategise for exits and settle the basis and method of any future valuations of interests.

Moving forward, here are my “Top Practical Tips” which might help avoid disputes or at least enable you to resolve matters before things really start to turn sour.

  • Prepare a business plan, implement it and keep it under review: acting on an impulse may sound attractive; but it is a risky strategy. Plan everything, implement your plan and then keep your plan under review.
  • Agree on goals and expectations: This is key to establishing a strong foundation for your business relationship from day one. Take time to consider your shared goals, aspirations and expectations and make sure you have these set out in writing.
  • Put boundaries and ground rules in place: When bad habits form, precedents are often set. It can be really difficult to re-trace your footsteps and unpick things you’re unhappy with. Set boundaries and ground rules from the start so that everyone is clear on expected conduct and working relationships; disputes often arise when uncertain boundaries are overstepped.
  • Consider and play to each other’s strengths and weaknesses: If you’re forming a business relationship with another person the chances are you are both bringing different things to the table. Consider these strengths and weaknesses and build your business plan around them. A mutual respect for each other’s varied talents allows less chance of friction, competition and resentment.
  • Remain honest and transparent: Most disputes involve one person doing something behind another’s back. It may involve taking money from the business account, the diversion of a business opportunity or simply the making of business decisions without reference to relevant and interested parties. If you remain honest and transparent throughout it will limit the risk of conflict.
  • Keep communication open: As communication breaks down, things are likely to go downhill very quickly. Even if your conflict has already escalated and you are no longer talking, legal professionals can act as advisers or even mediators to help re-open communication channels and enable sensible negotiations to be resumed and resolution to be achieved.
  • Keep personal and business relations separate: This doesn’t mean that you shouldn’t go into business with a friend, family member or partner – many very successful business relationships are forged in this way. But be careful about how you balance your personal and business relationships and keep clear boundaries in place. Your working relationship should be grounded in business and treated as such.

For further advice as to how to structure a business relationship, how to resolve a business dispute or more practical tips, feel free to get in touch with me for an initial, confidential 30-minute chat. It’s entirely free – there’s no obligation and no charge!

Is GPT-4 cleverer than a barrister?

Andrew Marsden

This news just in: GPT-4 wins chatbot lawyer contest!

Perhaps it’s time for barristers to hang up their wigs and let artificial intelligence (AI) take over?

But hold on; GPT-4 may have beaten all other chatbots – it scored 75% in the bar exams and out-performed all other artificial intelligence models at legal reasoning – but read the small print, and you’ll see it’s still no match for real barristers according to ‘New Scientist’.

Let’s face it, if you’re in the middle of a complex dispute with another shareholder, partner or director, would you rather speak to a chatbot or an experienced and specialist barrister?

Having spent over thirty years working with clients that are embroiled in often complex and heated shareholder disputes, I can say with absolute confidence that artificial intelligence is no match for the understanding, sensitivity, knowledge and experience needed to help navigate, mediate and resolve disputes of this nature successfully.

Here are just a few of the reasons why talking to a specialist barrister with decades of experience in this field will give you the best possible chance of resolving your dispute successfully and economically:

Shareholder disputes are complex

Shareholder disputes are often particularly complex. There are often multiple parties involved, years of history to consider and changing responsibilities, roles and relationships that need to be carefully understood. The terms and effects of relevant shareholders’ agreements and articles of association need to be understood, and where there is no shareholders’ agreement in place, things can be even more complicated. Without experienced specialist expertise, shareholders are far less likely to be able to resolve their dispute amicably and walk away with a result that they can feel satisfied with.

Shareholder disputes are often sensitive.

When business relationships turn sour, there are generally a lot of human emotions at play. It is not unusual for shareholders to seek legal advice fuelled by feelings of anger, hurt, betrayal and animosity. Dealing with a real human is invaluable at this stage, particularly one that carries decades of experience in this tricky field; barristers are able to provide reassurance, level-headedness and clarity to clients in a way that artificial intelligence simply can’t. The client/barrister relationship is key.

Effective resolution of shareholder disputes can take time. It’s a process. You are likely to find that you need your barrister’s support during that process, and that support will only be effective if it is built on solid foundations. You will need to establish a relationship with your barrister based on trust, respect and understanding. A chatbot simply can’t provide that support. Nothing beats expert advice. 

Taking specialist and experienced legal advice at as early a stage as possible provides the best route to resolution in as seamless and stress-free way as is possible. Chatbots are simply incomparable to specialist barristers with years of experience in dealing with complex situations such as yours. An experienced, specialist barrister should be able to identify the best steps to take towards resolution. From pre-litigation to mediation and negotiation and right through to court proceedings, a specialist barrister will be able to advise, guide, represent and support you.

If you find yourself in the midst of a shareholder dispute and would like to talk to a specialist barrister with over thirty years of experience, please do get in touch by calling me on 07718 883094 or emailing andrew.marsden@commercialchambers.org. A thirty-minute initial conversation won’t cost you anything -I’d be very happy to offer you some advice and guidance.