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Thursday, September 4, 2014

There Oughta be a Law

If you are a business owner and have not yet been sued, you may not be able to dodge that bullet forever.  A recent luncheon with other business owners quickly degenerated into lawsuit horror stories.  In that situation, it doesn't matter if you are in the right...you still have to defend your position, and that means attorney fees.  Here are some things we have learned along the way:

  • start keeping good notes now, before you need them.  That means names/dates/situations in every employee file, documentation of all vendor contracts and partnership agreements.  Even when things are loose and you only have an email or hand-written note confirming the arrangement, keep a copy in a file somewhere you'll be able to find it later. Everything looks rosy in the beginning of an employee relationship or a business partnership - things can turn ugly quickly and you want to be the one with the documentation.
  • anyone can request almost any type of information, even if it has nothing to do with the dispute at hand. Keeping good records ensures that you'll be able to provide most anything without too much trouble.
  • just because you have a well-written contract doesn't ensure that the other party will uphold their end of the agreement. When they don't, you may have to sue to enforce the agreement.
  • never ever, ever never agree to use the American Arbitration Association in case of a dispute in a contract. Using AAA is expensive, time-consuming and at the end of it all you may hear the disturbing term "splitting the baby", which means you basically agree to split the amount owed.  (Like you need an arbitrator for that! Chances are you'll be the one in the right - better to sue and tell your story to the judge).
  • anyone can sue you for almost anything, even if it doesn't make any sense at all.  If they can find an attorney to take the case, you will have to hire one to defend your position.
  • all attorneys are not created equal. Get recommendations from people who have been in similar situations, and make sure the attorney is experienced in your particular matter.
  • once you have an attorney, talk with them about ways to minimize your bill.  For example, you may be able to write out your story and provide it to them rather than taking 3 hours of meeting time to tell them the story. If you include complete documentation, they may be able to convert this into legalese, saving future deposition prep time.  The more detail you can provide, with dates, the better.
  • don't overspend on something that you can't win.  (and pretty much the only winners ARE the attorneys).  Get the best attorney you can afford, and then know that there may be a point where settling makes more financial sense than seeing a lawsuit through to it's conclusion.  It help if you can do this in conjunction with the last point:
Last, but most importantly:
  • don't let your emotions get the best of you. You will be ANGRY.  Have your temporary pity party (why are they doing this to me...they're lying...they're requesting materials that have no bearing on this issue...etc.), indulge your fantasies about various ways to kill the source of your anger - and then take emotion out of the equation, start getting your notes together and listen to your attorney.
This hasn't been a very amusing post...why? Because lawsuits aren't funny! If you find yourself in this position, don't be tempted to learn these (and other) lessons the hard way. Talk to as many people as you can to get advice on how to survive a lawsuit with your sanity intact.  Good luck!

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