Business owners and managers can take steps toward control of their litigation expenses by asking some searching questions before they pick up the phone to call an attorney.
Matt Hippler, a partner with Holland & Hart LLP in Reno, says businesspeople who are itching to sue need to slow down and ask themselves whether a legal action is truly worthwhile.
“Litigation is expensive. Really expensive,” Hippler told the audience at a breakfast sponsored by Northern Nevada Business Weekly last week. “It’s always important to ask yourself if the dispute is worth it. That question will help you, and it will help your attorney set expectations.”
Among good reasons to consider litigation? The business is on the line, Hippler said, the disputed amount is particularly large or the dispute involves a key employee or important client.
Bad reasons to go to court? Hippler said the dollar amount may be too small — you’re spending $50,000 to collect $50,000 — or you’re motivated by anger or the desire to prove a principal.
If you decide to pursue litigation, Hippler said the next critical decision is the choice of a lawyer.
Ideally, he says, business owners and managers should be proactive and begin developing relationships with attorneys before they’re needed. A good attorney, he said, is responsive, honest, exercises good judgment, and is personally a good match with the client.
Another important choice is the selection of an appropriate venue for the dispute to decided.
Small claims court, where representation by an attorney is not necessary, may be a good choice for disputes involving $7,500 or less. State district court and its specialized business court is likely to be the appropriate venue for complex, high-value business cases.
And many disputes are likely to end up either in private mediation or binding arbitration, which sometimes is required by the terms of a business contract.
Mediation and arbitration, Hippler noted, are conducted in private and don’t require the open-to-the-public filings of traditional courtroom litigation.
In the digital era, however, Hippler cautioned that businesses need to exercise care to protect electronic documents, e-mail and the like that might be evidence.
He strongly suggested that managers establish a policy that covers the sorts of electronic documents that will be saved and the amount of time they will be kept.
And as soon as a dispute is on the horizon, Hippler said managers should move quickly to ensure that documents — electronic and otherwise — are held and maintained in good condition.
