When entrepreneurs come together to start a new business, they often want to launch quickly. In the excitement of getting up and running, they might not consider what happens if a disagreement arises among the owners.

The default means of resolving a business dispute is filing a lawsuit with the court. Civil lawsuits, particularly if they go through jury trial, have a reputation for being expensive, drawn-out battles of attrition. Courts’ dockets are overwhelmed with filings, and as a result, civil lawsuits can take years to resolve. According to a U.S. Justice Department study, about 97 percent of civil cases are settled or dismissed before even reaching trial.

Lawsuits have another disadvantage in that the records, hearings and trials generally are open to the public. That means the parties’ dirty laundry may be aired for anyone interested.

However, the court system has its advantages. Other than filing fees and other comparatively small costs, the court system itself is free and remains the only way to get a jury trial. In addition, parties usually have the right to appeal a decision to a higher court.

While it is unpleasant to think about the breakup of a business partnership before making the first dollar, determining how disputes among owners will be resolved should be considered upfront. In general, the fastest, most private and least expensive option should be discussed.

Alternative dispute resolution (ADR) generally refers to some means of resolving a dispute outside of filing a lawsuit in the court system. Two commonplace forms of ADR are mediation and arbitration.

Mediation refers to the use of a third party to negotiate a settlement agreement of a dispute. Usually, the mediator does not have the ability to make any rulings on the dispute, but rather pushes the parties to reach an agreement. The mediator’s skill at convincing the parties to reach a compromise is usually the key to success. Accordingly, it is important to choose the right mediator so that time and money are not wasted in a fruitless endeavor. With the right mediator, a dispute may be resolved without the hassle and risks of litigation or arbitration.

Arbitration is the use of a third party to stand in for both judge and jury and decide the dispute. Arbitration has some good advantages.

First, the parties usually choose their arbitrator. Selecting someone with specialized knowledge or experience to decide a dispute is an enormous advantage over the court system. Second, arbitration shares with mediation the advantage of being a private proceeding. Both forms of ADR generally take place behind closed doors, which allows much greater confidentiality. Finally, because it is not subject to an overburdened docket, there is usually more flexibility and control over the scheduling and timing of the arbitration proceeding.

However, arbitration also has disadvantages. Arbitration can be expensive — particularly when accounting for the cost of paying the arbitrator for services. Also, generally there is no right of appeal in arbitration. Once the arbitrator issues a decision, the parties are stuck with it.

Ultimately, those forming a new business entity should consider their own concerns and interests and work with counsel to formulate a dispute resolution process that makes sense for them and their new business.

Bill Harstad is a partner in the litigation and alternative dispute resolution practice group at Carlsmith Ball LP. He can be reached at wharstad@carlsmith.com.