Lawsuits can happen, even in a small business. The impact of litigation on a small business is different, however, than on a major company. It can feel much more personal and cause more stress. It may strain your more limited resources more, but it can also be a powerful tool to enforce your rights when necessary. Balancing when litigation is necessary and its possible drawbacks in best made with legal advice from your attorney.
At the Saxton Law Firm, our small business litigators understand the impact litigation has on your small business. We help you preplan to avoid most issues, including risk management and contract reviews. We are powerful negotiators, but also skilled litigators when it becomes necessary. Let us help you navigate this challenging part of small business ownership.
Impacts of Litigation on Small Businesses
Litigation means filing a lawsuit in court. It is a combative and stressful process for any company, but it is sometimes necessary to protect your legal rights. As small business litigation attorneys, we understand the unique effects litigation has on your company.
Disruptions to Daily Operations
Small businesses typically have just a few employees, often those in an ownership position as well. Lawsuits may require significant time and resources to be diverted to that litigation. This could include time away from the business for meetings, interviews, and depositions. It could also mean time away in court if the case goes to trial.
The Financial Impact
Litigation puts more of a strain on a small business than a large one. Large companies have greater resources to handle legal disputes, or even have in-house counsel to help deal with their issues. Small businesses have more limited resources that more keenly feel the burden of litigation.
Reputational Impact
Small businesses rely greatly on their brand image and reputation for their success. A lawsuit can affect that reputation, especially if it gets a lot of media attention. This will depend on the nature of the legal dispute and who is involved. Unfounded allegations can harm your reputation, but litigation may actually help resolve much of this damage in the end.
Slowing Business Growth
As your small business continues to grow, litigation can disrupt your progress. Time spent prosecuting or defending a lawsuit is less time you can spend on the business, which could have a significant impact on it. Investors may shy away from perceived legal trouble, but may also be encouraged to see you fight for your rights when appropriate.
How To Mitigate the Risks of Small Business Litigation
There are several ways you can help limit the impact litigation has on your small business. This includes:
- Having your attorney review business contracts before you sign them
- Creating a strong business plan that accounts for the possibility of litigation
- Using business insurance to protect against unanticipated losses
- Performing regular compliance checks to ensure you comply with applicable laws and regulations
- Training supervisors and employees on how to work well with one another and with customers
- Having a strong small business litigator at your side to help with any legal challenges
These and other strategies unique to your company could help limit the impacts litigation can have on your small business.
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At Saxton Law Firm, our Missouri business litigation lawyers are ready to help. We assist you in planning for the future to avoid litigation risks. Our team is also ready to go to court on your behalf when it becomes necessary.