Boise State on Business

Susan Park: Want to avoid a lawsuit? Here are some suggestions

SUSAN PARK, assistant professor of business law at Boise State’s College of Business and EconomicsDecember 17, 2013 

Can you make your business lawsuit-proof? Probably not. Indeed, wise businesspeople often conclude that a few lawsuits over the lifetime of the business are simply some of the costs of doing business.

Nonetheless, legal fees are among the more frustrating and annoying business expenses. Therefore, taking steps to minimize the likelihood of a lawsuit is an excellent idea.

Being proactive is a good business strategy. Anticipating and dealing with possible legal issues before they escalate into a lawsuit is almost always less expensive — and less stressful — than being a party to a lawsuit.

Protecting your business from lawsuits will often require hiring a good attorney and developing a solid relationship with that person. (A previous Boise State on Business column included some tips for choosing a lawyer.)

Once you find the right lawyer, be forthcoming! Your attorney has a legal and ethical obligation to keep anything you say to him or her confidential. The attorney will be better able to represent you and your company’s interests with more information about you and your business — both the good and the not-so-good.

Also consider paying attention to three general areas to protect your business from lawsuits.

First, stay on top of employment issues. Employment-related lawsuits are among the most common types of business litigation. They are often complex and can be tough to negotiate alone without a solid understanding of the law. If you face an important employment decision, consult human resources or your attorney before you act.

Second, pay attention to intellectual property issues. These include your choice of business name, any software your company develops, and all photos, logos, and other content your company has developed to market itself. If an employee or outside business created your marketing materials, you will also have ownership matters to consider. Handling any of these issues properly — and legally — likely requires consultation with a good intellectual property attorney.

Third, consider your contracts carefully, including the fine print. Idaho courts hear numerous contract disputes each year. Many of these could have been avoided if the parties had paid closer attention to the terms they negotiated, or if they had a proper understanding of their contractual obligations after the contract became enforceable.

And if you do get sued? Don’t panic. Make an appointment to see your lawyer immediately. And consider these tips as well:

• Take it seriously! The window of time given to respond to a complaint is generally very small. See your attorney immediately.

• If you still do not have an attorney, get one.

• Share all relevant information with your attorney. Communicate your expectations.

• Participate actively in managing your case. Discuss candidly the pros and cons of your issue with your attorney. Be sure you understand best and worst case scenarios.

• In court, be respectful of the judge and the process.

• Don’t take it personally. Most lawsuits are about economics, not personalities. If you have been sued, it is probably because of financial issues or a breakdown in communications, not because you are a bad person. If you can keep this in mind, you may be able to save yourself money and stress by settling your case early.

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spark@boisestate.edu

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