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There you are, running your business, working hard, treating people right, making money, and all is well. And now this!?
Someone filed a lawsuit. You’re being sued!
Maybe it’s a disgruntled ex-employee, a vendor who over-invoiced you and you didn’t pay, or a customer who’s acting shady. It doesn’t matter. This one hurts.
You’re being sued!
Your first reaction is likely that you take it personally and you get angry – even indignant. How COULD they? Do they know who they’re messing with? Do they even REALIZE how WRONG they are?!
Then perhaps fear kicks in. What if you’re wrong and they prevail? What if you lose? How much is this going to cost? Will it put you out of business? Will you go to jail? You’re out of your element.
This is natural.
You try to do things right in your business and treat people well. Maybe you’re already annoyed by this situation anyway. Or maybe you didn’t even see it coming! Now you’ve got to spend your time on this fight.
Frustrating and scary!
Well, my friend, step back and take a breath. Don’t take this personally and try to remain calm. It’s a game from here on out and you need to learn how to play.
Here’s what you do:
- Lawyer up. Talk to your business attorney and ask for a referral to a specialist in this particular discipline – contracts, labor – whatever it is.
- Notify your insurance company. You have general liability insurance and this may turn out to be a claim.
- Get your documents together. This can be a real time-suck. Delegate everything you can in terms of document gathering, but take time to look at the documents personally. This will include, at a minimum, contracts, emails, employee files, invoices, project scopes, and so on.
- Inform your team to cease all contact with the person or company suing you, and to NOT delete any information related to them.
Understand, this is not fair or logical. (I’m sure your attorney thinks it is, however). It’s legal. You’re going to want a lot of emotional and character stuff to come out about this person who’s suing you, and likely your attorney will tell you it can’t. They’ve been unreasonable. You’ve tried to please them. They made a mistake and you refused to go along with it. It doesn’t matter.
This is about the rule of law – nothing more, nothing less. Think of your attorney as a rule interpreter – someone who will know the rules better than you.
Here’s what you’ll think:
- You’ll be determined to fight – to win in court. You’ll want to fight this on principal because you are RIGHT. (And it probably won’t go this way.)
- You’ll think of counter-suing and your attorney will likely advise against it – (and likely be right). Counter-suits are rare and they’re hard to prove.
Here’s reality. You have one goal: minimize the damage.
You’ll probably settle (95+% do!) and pay some money. It’s less expensive to settle than to keep spending big dollars on proving you’re right. Try to minimize that. Again, it’s not fair but it becomes about the economics (unless you’re super-wealthy, like Mark Cuban.)
And now a few tips on how to deal with your attorney.
- Your lawyer gets paid, whether you win or lose. Not fair – just fact. So pick the best one you can afford.
- Don’t vent to her. She is charging you for her time, and she’s not your therapist. Stick with the facts.
- Just because you hired an attorney doesn’t mean you get to abdicate to her. She’s not a strategist, she’s a rules interpreter, remember? Keep your head in the game. You have to provide guidance, direction, nuance, and ideas – strategic guidance.
- She really doesn’t have an incentive to end this quickly. The longer this drags out, the more she gets paid, and she likes to get paid.
- Ask her for an estimate / summary. You can start to get your head around how much this is likely to cost, and she’ll be conscious of the number she lays out.
- Don’t let this consume you. It’s only money. It turns out there’s more. So GO MAKE SOME MONEY and let things take their course.
- You will likely end up in a settlement conference, and this is the end game. Your attorney is there to advise you, but the negotiation is yours.
Getting sued stinks, but if you’re building a company it’s likely and probable at some point. Consider it a cost of doing business – like paying insurance premiums when you don’t make any claims – kind of.
It’s not the end of the world and you still have to be the leader for the company. This is why you get paid the big bucks. This too shall end and life will go on. It’s just a part of doing business. Don’t take it personally. Good luck, and carry on!
What did I miss? Comments or questions? Please take a moment to comment or share this with someone you know who might be going through this troubling time.
-Rick
