Litigation has a widespread ripple effect that can negatively impact all aspects of your business – especially if you’re a small business. Even if you secure a favorable outcome, you’re bound to experience some losses. Although the cost accounting used by many publicly traded businesses makes it difficult to attribute a specific value to the impact of litigation, one Depaul Law Review analysis estimates litigation eats into a significant portion of profits, with some of the largest Fortune 200 companies spending nine figures annually on legal fees and related expenses.
Because you can lose even if you win litigation, enacting effective preventative measures to avoid litigation can be essential to protecting your business.
The extensive costs involved in litigation can have a harmful impact on your business’s bottom line. Even if you have a litigation fund, delays in court can easily cause one case to overrun your budget, bleeding into your other resources. Litigation may also trigger increased insurance premiums for small businesses, especially if you’re found liable in the liability claim.
Litigation can jeopardize your company’s reputation. Because court proceedings are usually a matter of public record, sensitive information about your company – including your finances – can become available to anyone interested in looking. There’s also a potential for negative press and sensationalized social media backlash, which can harm your brand image and negatively impact your relationships with customers and business partners.
Going to court involves diverting time and resources away from your business’s day-to-day operations. Employees may be pulled away from their duties to participate in prolonged legal proceedings, which may not only cost you money but hinder productivity, setting back progress and delaying production timelines.
There are numerous measures businesses can take to lower their risk of litigation, including regular audits, thorough employee training programs and having contracts reviewed by skilled business litigation attorneys. You can learn more about preventative measures companies can take to avoid litigation in our blog here[1] .
That said, there may be situations in which pursuing litigation is still your best (or only) course of action, whether you’re the claimant or the defendant. For instance, in a breach of contract claim, a favorable outcome in court could mean the offending contractor could be ordered to fulfill their contractual obligations in addition to paying you compensation for losses resulting from the delay. In this scenario, litigation or an alternative form of dispute resolution that leads to a settlement may be the only remedies.
Whether you’re negotiating, litigating or exploring alternative avenues for dispute resolution, we’re here to help.
The attorneys at the Law Office of Cameron Hawkins have a record of success representing businesses in a variety of legal settings and will work hard to increase your chances of a favorable outcome. Our team will fight tirelessly for your business, strengthening your case with straightforward evidence and advocating for your interests in negotiations and in court.
Schedule a complimentary case consultation with one of our skilled attorneys today by calling (678) 921-4225 or exploring our practice page.
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