People are usually not aware of how incredibly expensive litigation can be until they are unfortunate enough to experience it for themselves. It's ironic, I know, but as a litigator, I can attest to what an incredible waste of money litigation can often become.
Lawsuits, especially business cases, can often cost hundreds of thousands of dollars, or more, and all too often the result, even if it's a victory, can be hollow in the context of the cost and distraction of the battle. Also, lawsuits often take on a life of their own, and mutual resolution can become hindered by the litigation process. For example, a case we handled recently that settled for about $250,000.00, likely would have cost my party as much to prosecute - so that $250,000.00 settlement would have become less attractive if not offensive at the end of the case as opposed to the beginning. Also, in litigation, the conflict-oriented process with depositions, accusations, and motion practice, can harden the animosity of the parties.
With all the potential costs and pitfalls, here are some tips about how to avoid destructive litigation:
1. Listen, be respectful and seek to avoid conflict.
It never ceases to amaze me how the most trivial slights can become the impetus for a lawsuit. Employers, yes it's an at-will relationship so you can terminate your employees for most any reason, but think carefully before slamming the door on them as they leave or parading them through the office with their box of personal items. Same goes the other way. Employees, I know losing your job may be humiliating or painful, but taking your frustration out on the employer is a bad idea. Same goes for shareholder relationships or even marriages. Listen, be respectful and seek out compromise both before and after conflict ensues. Oh, and by the way, lawyers can sometimes be part of the problem. If your lawyer is part of the problem, get a new one.
2. Get a level-headed outside opinion before it's too late.
Talk to someone who is level-headed and can be balanced. Often this is a lawyer but it can be a trusted business advisor, too. Don't go to your “yes” person. It is often incredibly helpful to hear from someone who is willing to play devil's advocate or help you see the other side's perspective. Also, we often under appreciate the costs/benefits analysis when we are angry or emotional about a situation. Talk to someone who has been there.
3. Swallow your pride.
The concept of principle has from time to time in history been the impetus for major positive world events - like the American Revolution for instance. But be aware that nothing gets a lawyer's attention more than a client who is committed to a cause on principle, particularly if the client has deep pockets. The question you need to ask yourself is how much it's worth. Sometimes, it's worth risking everything and if so, so be it, but more often than not, even though you are motivated right now, that motivation goes away after a couple of lawyer bills and a deposition. So you're right? So what? Consider whether you can swallow your pride and move on before it's too late.
4. Focus on what you're good at.
Are you a business person? What is your business and why are you successful? If litigation takes away from the time you have to focus on your core business, it costs money. If litigation distracts you from your core business, it costs you money. Think about this before you give your lawyer a large retainer and state your commitment to fighting to the end.
We are always amazed at how some of our biggest and most successful clients manage to avoid litigation. We do not think this is a coincidence. Those clients are good at avoiding litigation and it makes them more successful.