Everyone knows that litigation can be expensive. While not all business lawsuits can be prevented, many can. The following are just a few examples of practices that can reduce the likelihood you and your business will be sued.
You are less likely to sue someone you enjoy doing business with. The same is true for your clients, employees, and potential business partners. When disputes arise, it pays to communicate, listen, and try to resolve disagreements as effectively as possible beforelitigation. Keep in mind, too, that litigation can be prolonged and costly. Resolving a dispute on less-than-favorable terms can sometimes make much better financial sense than fighting that dispute out in court—even if you ultimately win. It can also preserve sources of business. Finally, it pays to research clients and business partners before committing to an agreement. Some individuals can be truly impossible, but a little bit of research can sometimes save you from entering into an arrangement that will ultimately end up in court.
Keep complete, detailed, and secure business records
Document everything, back those records up, and make sure originals and backups of your business records are secure. While it is obvious that records of contracts, purchase orders, employment agreements and the like should always be kept, it is also a good practice to keep records of other operations, such as communications with clients, too. Keeping detailed, complete records can help parties resolve misunderstandings and can prevent those same misunderstandings from escalating into a lawsuit. In the event litigation occurs anyways, the presence of detailed records can powerfully bolster your case.
It is also important to keep business records protected and secure. The presence of backups can reduce the impact caused by a disaster such as a fire or flood. Where possible, it is a good idea to keep electronic copies of paper records that could otherwise be lost or destroyed. It is also important to keep these electronic records secure both from physical damage (such as the destruction of servers or hard drives), and from unauthorized disclosure of sensitive employee, client, or other business information. Maintaining data breach insurance and up-to-date IT systems are just a couple of ways to protect your business and prevent these types of losses from escalating into litigation.
Get legal help with important contracts
It is much less expensive to have an attorney review and help draft a contract, employment agreement, or other important business document than to pay that attorney to litigate about that document in court. For your own documents, consider having an attorney either draft or review important business contracts or employment agreements for significant hires to protect your business’ liability. For important contracts which you are considering signing, it often pays to have an attorney review the document and advise you about your liability and other legal exposure. More broadly, in some instances it is valuable to seek legal help about structuring your business in such a way as to limit both your personal liability and the liability of other portions of your business. An attorney can help you make decisions about structuring your business as an S-corporation, LLC, or partnership, to name just a few. It might also be valuable, in certain industries, to operate your business enterprise with multiple corporate entities.
We at The Patterson Law Firm, LLC are happy to provide assistance with these and many other strategies to help prevent your business from getting involved in a lawsuit and to defend your rights if you do have to go to court. To speak to one of our lawyers, don’t be afraid to call us at (312) 223-1699 for more advice and information.