An ounce of prevention is worth a year of legal disputes, to paraphrase an old saying. When you run a small business, you don’t always anticipate facing a lawsuit in your future. As a result, many areas of risk can arise. This is especially true among startups, but even established businesses should go over their policies and bylaws.
Here are some tips to help you minimize the risks and associated costs to your business.
Read the fine print
Be thorough when dealing with contractors, even those you’ve worked with in the past, set a clear scope of duties and obligations in the written contract. Your company or corporate lawyer should be involved in all negotiations and agreements to eliminate any possible risks of litigation.
Keep your documents organized
A well-organized system of business records, transactions, contracts, and other documents is good for general efficiency, and provide considerable cost savings should you face the threat of litigation. Law firms can quote more accurate and fair charges if you’re able to present a clear picture of the case and will assign people with the right expertise to assist in dispute resolution.
Expand your insurance coverage
Business insurance comes in many forms, and while small businesses choose to run with the minimum necessary coverage, increasing your cover can be a significant investment. Find important aspects of your business that will need protection. For example, commercial auto insurance is important if your employees frequently use your company cars, or general liability insurance would protect you and your employees in case of accidental damage to a property or an injury.
Choose your counsel
When you’re facing an actual lawsuit, resist the instinct to panic. Make careful and thoughtful decisions, and that includes choosing your counsel. The most cost-effective solution isn’t necessarily the lawyer with the lowest fees. A case could drag on for months or years, and so you’ll need an experienced attorney by your side. Someone who will stay on your case and work until a fair resolution is reached.
Your legal team may be the experts when it comes to handling the case, but just like any partner, they work best when you remain engaged. Discuss the plan of action, read their reports, and maintain clear and open communication with your lawyers so that you can achieve the desired outcome and keep your business intact.
You may have all your bases covered, but sometimes unexpected issues come up that could endanger your brand and good reputation. Be prepared for any possibility of a lawsuit. Having a lawyer on retention is a wise step. Don’t think of it as an added expense, but rather an insurance for your future.