Litigation Procedures And How They Affect A Business

Litigation Procedures And How They Affect A Business

Introduction

Litigation is an inevitable part of any business’s life. Indeed, even the most efficiently run businesses out there often find themselves involved with one form of lawsuit or another. These lawsuits can emanate from within the business itself such as those filed by employees in protest against certain cases of infringement on their rights. Or they can come from external parties such as customers, suppliers, creditors, business partners, the general public, or any other number of external stakeholders. No matter the nature of the lawsuit filed, one thing is for sure; it will never be business as usual for for a period of time into the future. Litigation has a way of affecting the operations of a business in nearly all facets and in this article, we shall discuss some of its major impacts to your firm.

How Litigation Affects Your Business

Costs

It is a generally-accepted fact that when a lawsuit is filed against your business, you will need an attorney to help you navigate through the case. And of course, attorneys come at a fee and the fee is usually anything but cheap. According to payscale.com, attorneys in New York earn about $97,436 per year, earnings that are 16 percent higher than the $81,818 annual national average for attorneys. From this statistic alone, it is evident that any New York-based likely will spend more on attorneys than what businesses in other cities do. Aside from the fee paid to an attorney, there are other hidden costs associated with business litigation such as transport to and from the court precincts, court fees, and more. All of which weigh negatively on the business’s revenue.

Strained Relationships

Another major impact of litigation is that they often can strain a relationship. This normally happens when a business is sued by another firm, its customers or even the state. Depending on the extent of mutual benefits the two entities were drawing from each other prior to the lawsuit, the damages incurred (both financially as well as in terms of public relations) might be very difficult for your business to repair. In the worst case scenario, your business may be forced to sever ties with the other party to the lawsuit, and in cases where the relationship was a financially beneficial one to your business,, might be a bad blow to the business.

Loss Of Public Confidence

We were recently treated to perhaps one of the biggest news in recent times, of possible lawsuits against FaceBook for alleged infringement on privacy rights. And we all know the extent that the company went to try and do some damage control. This is one of the challenges of lawsuits –that it doesn’t matter whether the accusations against your firm are factual or fictitious, many people will never see you in the same positive light as they did before. In the wake of any litigation, businesses usually go through a public relations nightmare. From endless press briefings trying to “set the record straight,’’ to transfers of personnel whose departments were adversely mentioned, and much more. It is always an endless journey towards regaining public confidence. Some businesses might go a step further and re-brand themselves, while some litigation cases have been known to cause some businesses to go bust. And as we all are aware, all these undertakings consume time and money.

Loss Of Time

The same way litigation procedures eat into your company’s revenue is the very same way it eats into your most important resource –time. The time spent on endless trips to the courtrooms, in having strategy sessions with your attorney, doing research into the case and how to win, could all have been otherwise been spent on aspects of your business that would serve the interests of your business better. At times, an investigation in a situation could take an eternity and during this time, your company might be mandated to cooperate. You will find you are indeed spending more time trying to help the law enforcement agencies, if it is such a case, with their work and as a result, losing out on potential business revenue.

Avoiding the Effects of Litigation.

Business litigation is inevitable and while nobody wants them to happen, it pays to be prepared. The only way to confront such litigation and be in a better position to deal with it is by hiring a litigation attorney as soon as possible. Such attorneys will use the requisite training and expertise to ensure they do all that can possibly be done to save your business from the possible loss of time, money reputation and more. When hiring them, it is important to keep certain things in mind. First, always insist on one who is trained in business law, and preferably has some experience operating in the the specific industry your business operates in. The legal profession is a diverse one and not anyone who goes by the title “attorney’’ is ideal for business-related litigation.

Of course, you also need to ensure they have certification from accredited institutions and have experience in handling such cases in the past. Most importantly, they should preferably be active members of local associations.

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