There are nearly 31 million small and midsized businesses in the United States. In any given year, 50 percent or more of them are sued or threatened with a lawsuit. Owning and operating a business is for many a dream come true. But the dream can become a nightmare if you’re hit with a lawsuit.
Cobb Cole’s business law attorneys understand that every dollar your company spends defending a lawsuit is money that can’t be spent on hiring, expanding, or developing new products and services. Some lawsuit costs can be so high that they threaten a business’s solvency. Our specialized knowledge in business legal matters, including litigation, can help you face potential lawsuits head-on. We’ll also guide you on how to anticipate common legal issues so you can get ahead of them before they get the best of you.
Legal Issues Most Businesses Experience
Somewhere around 90% of businesses experience a lawsuit at some point in their lifespan. No matter what their size or sector, five of the most common legal challenges they face include:
- Employment law issues. Employee agreements, collective bargaining, and wage and hours issues are just a few employer-related matters a business law attorney assists with. Workplace safety, discrimination, and hiring and firing are others. Missteps or mistakes in any of these areas could violate labor laws and other workplace regulations.
- Contract law. The lifeblood of any business – contracts – set out rights and obligations for involved parties. Breach of contract issues are a primary reason businesses wind up in litigation. All it can take to trigger a contract dispute is one omitted word or provision that renders it unenforceable.
- Intellectual property rights. Protecting your business’s intellectual property, including trademarks, copyrights, patents, and trade secrets, is critical. Infringing on someone else’s IP can lead to costly legal battles. Intellectual property law can be highly complex, presenting unique challenges when claiming your rights.
- Regulatory and compliance issues. Nearly every business today must comply with various local, state, and federal regulations, including health and safety standards, environmental laws, and industry-specific laws that, if not adhered to, can lead to legal actions, penalties, and reputational damage.
- Taxes. Unfortunately, US federal and state tax laws are among the most complicated regulations businesses must deal with. Different tax structures affect businesses in different ways, affecting everything from how much you owe to which deductions you qualify for. Tax reporting and compliance are essential to avoid penalties, and tax law changes can make it challenging to remain compliant.
Additionally, internal business disputes such as with partners or shareholders, and external conflicts with other companies, customers, or regulatory bodies can lead to litigation. Working with a business law attorney specializing in Alternate Dispute Resolution (ADR) methods like mediation, arbitration, and collaborative law can help you resolve conflicts and avoid costly litigation.
Understanding how to navigate these and other business law-related challenges is crucial for your business’s successful operation and future growth.
Business Lawsuit Protections
The US has the costliest legal system in the world. A business lawsuit, deserved or not, can literally cost your business everything. Here’s how to protect it from the ever-present threat of legal action:
- Select the proper business structure. Incorporating your business as a C corp, S corp, or LLC, even if you’re a sole proprietor, protects you and your personal assets.
- Invest in business insurance. General liability insurance is good for injury claims like slip-and-fall accidents, but you need greater protection for breach of contract claims or claims of wrongful termination, discrimination, and harassment. Your insurance portfolio should accurately reflect the lawsuit risks your business might face.
- Use written contracts. Smaller businesses in particular often operate on handshake deals. While they can be legally binding, they don’t always provide dispute solutions. All business and customer contracts should be written, legally binding, and prepared or vetted by a business law attorney.
- Secure your data. Employee and customer data is essential to running and growing your business. However, you could find yourself in deep legal trouble if it gets into the wrong hands. Establish strong policies and procedures that define who has access to sensitive data and how the data is collected, stored, and destroyed. Employee awareness training on data security best practices ensures they understand how to handle sensitive data and recognize various cyber threats.
- Foster open communication. Injured parties often feel a lawsuit is the only way to get their grievance heard and addressed. Creating an environment where people can talk candidly can help resolve issues before they escalate to litigation.
Cobb Cole Business Law Attorneys: Helping You Avoid Litigation
There are many things a business owner can’t control, including the economy, market trends, and changes in consumer behavior. However, with careful planning, you can minimize the risk of lawsuits and avoid most legal threats.
The business law attorneys at Cobb Cole provide legal services that minimize legal risks and maximize protection from the threat of lawsuits. We’ve spent over a century crafting strategic and practical solutions tailored to our business clients’ unique needs. Contact us today to learn how we can help your business do the same.
