Litigation is an Essential Tool for Business Owners

By Jim Shields

Every single business in this country faces the potential for litigation. Yet, over the past few decades, many executives have looked at litigation like it’s a bad thing. A practice to be avoided. However, looking at litigation through a different lens can help put you and your business a step ahead. Litigation should be viewed as a civil, reasonable way to resolve business disputes.

The harsh truth - If you shy away from litigation, you have no business being in business.

When faced with a business challenge, it’s critical to reframe the conversation. Think of litigation as a conflict management tool. At some point, every business will grow to the point where they will be faced with the decision of litigating a contract or business dispute. Litigation can be a necessary, normal part of doing business with others.

While commercial clients are sometimes fearful that litigation will increase the level of conflict and cost to all parties involved, that’s not always true. Clients still have plenty of autonomy and choice, even in litigation.

When is it appropriate and advisable to pursue litigation?

A lawsuit can save your business from financial ruin. There are many situations where it’s appropriate and advisable to pursue litigation. When a company appears to be in the right, when revenues are at stake, and when market share or unfair competition are in play, then litigation is the right choice. When a vendor, client, supplier, or purchaser does something that you believe is a breach of a contract or does something that creates a significant challenge for your business, an astute business person should be prepared to take decisive action to address and stop the problem.

Litigation can be an effective tool for meeting critical challenges facing a business. As an example, one of our clients was doing business with a long-standing customer who was suddenly put under new management. The new management team decided rather abruptly that they didn’t want to do business anymore-- and they stopped paying their bills. The problem was that they only stopped paying their bills after our client had provided a million dollars in services. Our client had two choices 1) they could incur the loss and write it off, or 2) file a lawsuit to pursue recovery of the payment that was legitimately and rightfully owed to them.

The difference between success and failure in conflict resolution can lie in the level of commitment to solving the problem. Companies that give litigation top priority often have better results. Litigation doesn’t always have to mean a contest or a high-conflict event. Whether litigation is a client’s first choice or a last resort, it’s still important to connect with your attorney to discuss litigation to solve complex business disputes.

Litigation doesn’t have to be scary. Our goal is to educate business owners and executives on how to use litigation effectively and efficiently to achieve business objectives and outcomes that serve our client’s best interests.