6 Crucial Tips for Small Business Owners Facing Legal Action

Consideration was given for the editing and publication of this post.

If you’re a small business owner, you probably don’t spend too much time dwelling over “what-if” scenarios. In fact, you’re probably pretty busy getting down to business, right?

That being said, you should take seriously the likelihood of facing a lawsuit somewhere down the line as unpleasant as it may be.

Given that millions of civil cases are filed year after year in the United States alone, there’s no denying that we live in a sue-happy society. Likewise, something as seemingly minor as poor contract language can land you in legal hot water if you aren’t careful.

For this reason alone, crucial that you have your personal assets separate from your business. Whether that means registering your small business as an LLC or an C-corp, don’t put yourself in a position where you could lose your personal wealth at the hands of a lawsuit.

But what should you do if you indeed face legal action?

1. Talk to a Lawyer Before You Talk to Anyone Else

This tip can’t be stressed enough: do not try to handle your legal affairs on your own. Without consulting a lawyer, the situation could quickly escalate. Similarly, you shouldn’t simply trust the advice of a friend or something you read on the Internet: talk to a real lawyer or at least get a consultation, regardless of the cost.

2. Don’t Panic

Hopefully speaking to legal counsel will ease your mind; however, you shouldn’t lose hope or assume the worst because someone’s trying to slap you with a lawsuit. Remember: freaking out will get you nowhere.

After all, millions of business owners face lawsuits at one point or another: although you should certainly take legal action seriously, it doesn’t necessarily spell the demise of your business.

3. Don’t Assume it Will Blow Over

Again, a lawyer can help give an idea of whether or not you’re actually in trouble or if someone is blowing off steam. Until then, don’t assume that the party taking action against you will back off. While we do live in a society where lawsuits have become the norm, you simply can’t take the risk of ignoring a lawsuit because it’s unpleasant.

4. Stay Composed and Professional

Especially when dealing with a client or former employee, it pays to be composed and professional throughout the entire process. Don’t resort to personal attacks or do anything petty (think: attack them via social media or issue personal threats). Instead, you should strive not to make lawsuits public and instead deal with them in private.

5. Don’t Let Your Business Tank

You still have a business to run regardless of what’s going on behind the scenes. Lawsuits are inherently stressful, but that doesn’t mean that you can afford to ignore your bottom line. You may need to let a few people know internally what’s going on to cut you some slack; however, you can’t pump the brakes on your business entirely.

6. Don’t Let It Happen Again

In short, once you go through the headaches of a legal suit it’s crucial that you take the steps to ensure that it never happens again. In most cases, this means having a dedicated lawyer on deck, paying special attention to legal language and contracts in the future and ultimately having good relationships with your clientele.

Remember: most businesses will face lawsuits at some point. By preparing for the worst and keeping a level head, you can take effectively deal with such snafus instead of letting them consume your business.