Point of View (POV): I was wronged by a vendor, customer, business partner, or former employee. I want you to file a lawsuit against them now!
This is a common call that business lawyers receive from their clients. When someone with whom you have a business relationship breaches a contract, doesn’t follow protocol, is saying things to ruin the company’s reputation, or has done something deceptive or sneaky, emotions rise. While there are times when an immediate response is necessary, the key is to strategically respond, not react. Litigation is a tool in the toolbox, but it can be all-consuming for your time, money, and focus. You should evaluate whether it is right for the current situation or whether other cost-effective solutions exist to explore first.
When you are in this situation, it is important to take a step back and ask some hard questions:
- What are your long-term business objectives?
- What is your current strategic plan to achieve those objectives?
- How does this potential lawsuit fit into those goals?
- Is this fight aligned with achieving your business goals? Is it necessary to set a precedent? Or is it based on the principle of winning and proving you are right?
- Is the cost of litigation going to pay off?
- For instance, what are your actual monetary damages? And, even if you win, what are your chances of recovering from those damages?
- Or, if you seek non-monetary damages, will the relief you seek help you regain your reputation, set a precedent, or achieve your business goals?
- If you are pursuing this based on principle, how much will you pay your attorney and diminish your profits to make a statement? How much time are you and your staff willing to put into discovery, depositions, and court appearances in lieu of revenue-generating projects? Is the stress worth it?
- What are the foreseeable counterclaims that might be asserted against you?
While the impulse to immediately pursue litigation is understandable, it’s crucial to approach such decisions with a strategic mindset. Litigation should be considered one of many tools available to resolve disputes, not the default response. By carefully considering your long-term business objectives, the potential costs and benefits, and alternative solutions, you can make a more informed decision that aligns with your overall strategy and goals. Remember, the ultimate aim is to protect and advance your business interests in the most effective and efficient way possible.
