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 before litigation.
Litigation can be costly. With this in mind, 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. 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. Keeping detailed, complete records can help you resolve misunderstandings. They can also prevent those same misunderstandings from escalating into a lawsuit. In the event litigation occurs anyways, detailed records can bolster your case.
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. 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. Maintain data breach insurance. Furthermore, make sure your IT systems are up to date.
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.
More broadly, in some instances it is valuable to seek legal help about structuring your business. This can 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.
At the Patterson Law Firm, we are happy to provide assistance with these and many other strategies to help prevent lawsuits and to defend your rights if you go to court. To speak to one of our lawyers, get in touch with us at (312) 223-1699 or click here.