How To Plan for Business Legal Problems

Legal issues can plague any business. From intellectual property issues to disgruntled employees, there's no business too large or too small to get in hot water. Even when you're in the right, legal costs have the potential to overwhelm your income. That's why it's important to start planning for legal problems before they occur. These are the five steps you should take to plan for and handle legal issues when they arise.

Establish Relationships With Legal Partners

As a business owner, you should have established relationships with legal partners. An attorney can help you begin a business on the right foot with legal incorporation, decide on the best state for incorporation and find you registered business agents in different states or countries. As you proceed she is invaluable for avoiding intellectual property entanglements. For very small businesses, keeping an attorney on retainer might not make good business sense, but when you already have someone you trust, you know exactly who to go to when the need arises.

Court reporters Portland are more legal partners to have in your back pocket. When you enter important negotiations, court reporters can transcribe meetings, preventing misunderstandings. They're your first line of defense in establishing documentation. Again, if you have an existing relationship with a reporting firm, when a lawsuit looms you'll already have someone you trust there to record court sessions.

Create and Save Documentation

Documentation is important. From Judge Judy to the Supreme Court, documentation is your proof. Fill out incident reports, protect evidence and keep investigative documentation together. Besides documenting when things go wrong, document when things are going right. Any time your business is making decisions, document the reasons for the decisions. When your retirement offerings change, new products are developed or new people are hired, track each decision. If your decisions become part of a lawsuit, your reasoning is an important part of that documentation. 

It's not just important to create and save documentation. It's important that the documentation reflects that you made the best decisions possible. In all business dealings, remain neutral. Avoid even the whiff of impropriety. 

Use Your Resources Liberally

Not sure if you're making a poor choice? Don't be afraid to talk to your lawyers when you have a question. Not sure if something is a conflict of interest? Talk to your attorney. Not sure if using that Disney-esque image on your logo is IP infringement? Your attorneys will let you know the best option. Spending a few hundred up front can save you from thousands or millions in legal costs later. Use their experience to protect your interests. 

At the same time, take a belt and suspenders approach to protecting your business. While your lawyers can give you good advice, having great insurance coverage can protect you when you wind up in court, even if you're not at fault. Look for business policies that cover lawyers' costs and any associated fees. Professional liability and general liability policies should be supplemented with policies specific to your business practices. 

Practice Kindness

Remember that one of the easiest ways to avoid litigation from former employees or business partners is to treat people kindly and assume the best intentions. Doing your best by everyone involved in your business helps people see mistakes as one-offs instead of a pattern of behavior. They are more likely to forgive a misstep when you have a track record of doing the right thing.

Practice Confidentiality

If you are sued don't discuss the case casually. Don't discuss personnel issues except with those who need to know. You could potentially tip your hand and create a larger issue. You could cause other employees to wonder if there's an issue with the company culture. In fact, the impact on company culture can't be overstated when it comes to legal issues. Loose lips can indeed sink your ship. If employees are gossiping about lawsuits, potential outcomes or the cost to the company, you're inviting negativity you don't need. 

When it comes to dealing with legal trouble in your business, an ounce of prevention really is worth a pound of cure.