Before a client makes a decision to file a lawsuit, it is critical to consider the costs associated with the litigation process and avoid letting your emotions get the best of you. Here are a few tips to guide you through the trenches:
- It’s Business not Personal – This is critical in decision making. You would not be visiting with an attorney unless someone got you hot under the collar and let’s face it – it is evil in the world. Your enemy has breached a contract, converted cash, stole your clients, stole your prized employee – fill in the blanks. Regardless of the severity of the bad act, emotions MUST NOT drive your decision-making. Put all emotions on the back burner (easy for me to say!) and consider whether a lawsuit is in the best interest of your company.
- Do you have a claim? – Just because someone did ya wrong doesn’t mean it rises to a legal claim. For example, if someone calls you a thief or tax cheat to your face, that does not rise to the level of an action for defamation which requires that the bad statement be heard by a third party. Same deal with regard to contracts which may appear to be violated but not so upon a lawyer’s review of the fine print.
- What is the Cost-Benefit – Critical! If it costs 50K to recover on a 30K claim, forget it! Costs of litigation for attorney fees and other expenses like depositions can be HUGE. Always ask the attorney for a projected budget before committing to the process. If the attorney refuses to do this or tries to explain why she can’t come up with an estimate – go for the nearest EXIT door.
- Don’t Count on Attorney’s Fees – Not all claims are entitled to recovery of attorney’s fees even if you win. An example is winning on a fraud case in Texas. The law provides that you pay your own way – believe it or not. Find out before you commit dollars. Also – even if you can recover you still have to win the case and convince the judge that your attorney’s fees are reasonable. Never assume you will EVER get your attorney’s fees back.
- Standing on Principle – Absolutely. Go for it. But be prepared to pay and pay and pay. If that prospect doesn’t give you indigestion – go for it.
- Don’t take it personally – This may be the most difficult! The process of litigation is emotional because it is about you or your business. Emotions are volatile and can upset you and also interfere with serenity and profitability if you are easily distracted.
- Be prepared for lost time – Even the best attorney needs the client to be on the team. This necessarily takes time away from work. Be aware of this tradeoff.
Once you have honestly answered the above questions, you can make the right choice as to file a lawsuit or not. With a sober eye on the details, you will vastly improve your chance for success.