“Discourage litigation. Persuade your neighbors to compromise whenever you can. Point out to them how the nominal winner is often a real loser — in fees, expenses, and waste of time.” – Abraham Lincoln (1850)
Abraham Lincoln’s advice to his fellow lawyers in 1850 is just as vital for business owners today as it was nearly two centuries ago. The hard truth of the legal system is simple: litigation is expensive.
Taking a case all the way to trial can cost hundreds of thousands of dollars and consume years of your life. Even if you “win,” you may face an appeal that adds even more time and expense. By the time the dust settles, you might find that your victory feels a lot like a loss.
Before racing to the courthouse, it is important to understand the financial reality of a claim. In many cases, you may only be entitled to recover a small fraction of your actual legal fees and expenses.
Furthermore, there is the practical matter of collecting your money. Every dollar your opponent spends fighting you in court is a dollar they no longer have available to pay your settlement. In the end, you could spend a fortune to win a judgment against a company that has been drained dry by the process itself.
How do you minimize these risks so you can focus on what matters – running your business? The best defense is a proactive one.
Long before a dispute arises, you should ensure your company is built on a solid foundation.
- Is your business entity set up correctly?
- Were your contracts drafted by an attorney who understands your industry, or were they pulled off the internet?
While you can’t predict every problem, having a legal professional in your corner to prepare for common pitfalls will save you significant time and money if a disagreement occurs.
When a dispute rears its ugly head, your first instinct might be to sue immediately. However, the smartest move is to take a step back and consult with a trusted legal professional to determine what is actually important to your bottom line and your sanity.
A seasoned attorney understands that a judge’s powers are limited. A judge can order someone to pay, but they often cannot do the things that actually save a business relationship, such as:
- Renegotiating a contract
- Adjusting a payment plan
- Repairing a professional partnership
These strategic conversations need to happen at the very beginning of a dispute. If you wait until you are in the heat of a legal battle, the battle lines have already been drawn. By that point, both sides have likely spent tens of thousands of dollars, making a peaceful resolution much harder to reach.
It might feel good to hear an attorney say, “We’ll sue them for everything they’ve got!” When you’ve been wronged, you want vindication. But remember: before the other side pays you a dime, you must pay your legal team. It could be years before you see any return on that investment – if you see it at all.
Full-scale litigation is sometimes unavoidable. But as Lincoln warned, the “winner” on paper is often the loser in reality. If your attorney isn’t looking for ways to resolve your dispute efficiently and protect your resources, it might be time to consult with someone who will.
At Birch Horton Bittner & Cherot, we pride ourselves on being strategic partners for Alaska businesses. We help you weigh the costs of litigation against the value of a smart compromise. Contact us today to discuss how we can protect your business and your bottom line.