Don’t Let Lawsuit Avoidance Cause Other Legal and Business Issues
A podcast of How I Built This featured a recent interview with Michael Dubin, one of the founders of the Dollar Shave Club. During the interview, Mr. Dubin mentioned one fact he had to learn not to take take personally is that, no matter how honestly and professionally a company conducts business, that company will be sued.
If you drew up a list of all the most famous success stories in the business world in the last twenty years, you’d be hard-pressed to find a name on that list that hasn’t been associated with at least one (and more likely several) major lawsuits over the years. Corporate successes often become targets for other entities who seek reparations for real, imagined, or even outright fictitious damages. Sometimes, a company will be sued by a competitor in a not-so-veiled attempt to obtain a business advantage. Of course, a company doesn’t want to get sued for any reason, so often a business owner’s first response to this possibility might be to avoid any actions that might provoke any kind of lawsuit at all. But this strategy won’t do your business any favors; in fact, it’s more likely to sabotage a business’s success as opposed to preserving its prosperity.
Any type or size of business can get sued for any number of reasons. If a business maintains a public space used by visitors or customers, for instance, a slip-and-fall accident could produce injuries that trigger a personal injury lawsuit. Medical practices are at risk of lawsuits for alleged malpractice or (intentional or unintentional) exposure of patient data. Employees sue employers for harassment, discrimination, or contract breaches—whether the allegations may be legitimate or not. Companies are regularly sued for alleged intellectual property violations. With U.S. courts receiving over 100 million lawsuit flings each year, an owner or investor can fairly assume that many of those filings are against businesses not too dissimilar from theirs. The prospect is understandably stress-inducing, , especially for smaller businesses with limited financial resources. Since the median cost for a business lawsuit currently ranges from $54,000 to $91,000, even a small lawsuit can negatively impact a small or medium-sized company.
How do companies react to such risks? Unfortunately, some businesses will overreact by severely constricting their range of operations. They may decide not to proceed with a product that bears a passing resemblance to a major brand’s version of the same product. For instance, a company may stick to an online-only presence in order to avoid personal injury lawsuits in brick-and-mortar stores. Another company might limit its number of suppliers or business partners to reduce their risk of breach-of-contract lawsuits. In other words, the company puts the brakes on its own growth and development in the hopes of offending as few individuals and businesses entities as possible.
This practice might limit exposure to lawsuits – but it can also impose significant limitations on the company’s ability to succeed and grow. There’s no getting around the fact that companies need workers, vendor partners, suppliers, contractors, customers, and of course products and services. A company also needs to brand itself and lay claim to various other intellectual properties. Many of them need to maintain branch offices, retail units, and other public environments. All of these needs open the door to potential lawsuits. But without fulfilling these needs and taking the risk, the business might well stagnate or even sink into oblivion.
If total lawsuit avoidance isn’t the answer, then what is? Proper legal guidance from an experienced business attorney can help you and your company avoid many of the common legal pitfalls of conducting business. A business law firm can help create the necessary contracts, agreements, and policies to clarify relationships with employees and other businesses from the beginning. A firm can help pursue the proper copyright, trademark, or other intellectual property steps to brand with confidence. When a lawsuit inevitably comes, a business attorney can advise on whether a quick settlement can save the company a great deal of resources or whether it is worth letting the case proceed through litigation. After all, some of the lawsuits a company may encounter could be completely frivolous in nature, and skilled legal counsel can help businesses and their owners recognize them for what they are.
Don’t let your business strategies revolve around an obsessive fear of lawsuits. Instead, arm yourself with the right legal tools and expertise to prevent and/or minimize these threats to your success.
© 2019 Matthew W. Harrison and Harrison Law, PLLC All Rights Reserved
This website and article have been prepared by Harrison Law, PLLC for informational purposes only and does not, and is not intended to, constitute legal or financial advice. The information is not provided in the course of an attorney-client relationship and is not intended to substitute for legal advice from an attorney licensed in your jurisdiction.
