Managers and company owners fear a few items more than litigation. Legal actions against a corporation can potentially damage an otherwise sterling reputation, create disputes, and of course result in the loss of large sums of money and staff talent. It has been said and could be argued that we live in a litigious society. Fortunately, with every new legal issue that can arise, there are just as many ways savvy business owners can protect their company, assets, and interests. Ideally even the most negative situation can be spun into a win-win situation where owners, staff, and customers are given a positive outcome when a potential violation or lawsuit could arise.
Avoiding the Courts and Protecting Yourself
Did you know that corporations pay out more than 20 billion dollars a year to litigation attorneys? This alarming figure does not account for lost money due to settlements, or perhaps more importantly lost business-related relationships that were once mutually beneficial. There are countless potential risks and legal issues that can arise. We want to highlight some common situations and potential strategies that can be implemented to avoid the court system should a misunderstanding or disagreement come forth.
Disputes between Partners
Every company starts out a little differently. Some begin as a simple sole proprietorship, other times successful business owners combine their resources and make a corporation. Regardless of how a company starts, it is important to make necessary changes along the way you grow, add new resources, and bring on new employees. One of the most efficient ways for partners to reconcile differences is to draft a partnership agreement that outlines certain protocols. Primarily a dispute resolution clause is guidelines that can be agreed to beforehand to help avoid courts and possible legal ramifications.
Keep Terms in Writing
Contracts are essential for any business to outlines terms between employees, contractors, vendors, and customers. It is a sound investment to have any contract drafted, reviewed, and altered by a business consultation law firm. This will help ensure that terms are properly outlined, risks are assessed and most importantly, the contract is legally binding in your jurisdiction. Valid contracts can act as an important reference point, clarify misunderstandings, and provide legal protection should a disagreement arise.
Take Action Before Things Escalate
As a general rule of thumb, ignoring an issue won’t make it go away, and it could lead to the issue becoming worse. By taking swift action you can help alleviate negativities and prevent issues before they get out of hand. As time goes on people tend to become entrenched in certain ways of thinking and small issues can grow into bitter situations. Ensure that management and staff members are trained to see potential risks as they arise and know what company policies should take place to alleviate the issue. It is a good idea to make certain that employees understand what actions to take and feel comfortable bringing an issue, glitch, or mistake up to management so it can be dealt with. Please consult with a business-risk assessment attorney to learn more about how you can protect your company and assets.