You need to consider many factors when deciding if you’re going to settle a lawsuit or fight it.
How many dollars are involved in the lawsuit? Are you being sued or are you thinking about filing a suit? How many lawsuits has your business been involved in?
When figuring out how many dollars are involved in a lawsuit you need to take into consideration many factors. Start with how much of your time will be used up in the process of building or defending the case? How much time will other executives in your company have to devote to preparing for the lawsuit? How much time will your CFO have to spend in preparation for the lawsuit? If you don’t have a CFO yet, will you need to hire a part time CFO to prepare for the lawsuit? Are there people outside your company that will need to be involved in the lawsuit to support your case? How reliable are these people? How much has your law firm estimated this lawsuit will cost? What has the law firm estimated the worst-case costs to be?
Questions to consider….
Has someone threatened to sue you? Are you contemplating suing someone? What is the basis of the complaint? Is this the first time this problem has occurred? Or is this a recurring problem? What needs to happen for you to feel respected? What needs to happen for the other party to feel respected? How will this lawsuit impact your business? In what ways will this lawsuit disrupt your business? How will it disrupt the other party’s business? Do you have strong emotions regarding this lawsuit? Does the other party have strong emotions regarding this lawsuit? Do you believe this lawsuit will create a windfall for your business? Have you sat down with a nonbiased confidant and discussed the lawsuit?
Have you or your company ever been involved in a lawsuit? How many lawsuits have you been involved in? Have you been involved in a lawsuit similar to this lawsuit? How many times have you won a lawsuit and truly felt like you won? Over many years how many TV series involving lawsuits have you watched? Does the other party have a history of being in lawsuits? What is the success rate the other party has at winning lawsuits?
Good corporate governance
I hope you’ve had none or very few lawsuits. Why do I say this? The fewer the lawsuits you have the better your Corporate Governance is. When your business has great corporate governance, you’ll have nearly zero lawsuits. Lawsuits are caused by poorly written contracts or when management modifies a contract and fails to have legal counsel review the contract. Alternatively, emotions are the next biggest reason for lawsuits. You feel disrespected and are angry at another company. Emotions block out common sense and can lead to escalating a problem.
Remember, attorneys sell their services to make revenue. A lawsuit can be very expensive and run up large legal bills. Good Corporate Governance costs money. When used properly, it helps limit and preferably avoids lawsuits. You will pay for Good Corporate Governance. But it will make you a good Corporate Citizen. More companies want to do business with Good Corporate Citizens. This will escalate the growth of your company and make you more successful. We counsel our clients to never consider a lawsuit for an amount of less than $100,000+.
Until next time,
To Your Growth & Profits
William De Temple, CEO Antirion LLc
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