Dealing with a business dispute can be as difficult for you as they are for your company. Disagreements may arise over contract terms, partnership duties or intellectual property rights. These issues can grow quickly and disrupt your business. You may initially believe that you can resolve the dispute on your own.
However, it is crucial to know when to get legal help to protect your rights and the future of your company. The disputes you face can quickly place your company in the 43 percent of small businesses threatened with a lawsuit each year. What situations might mean it is time to make that call?
1. When the dispute is complex
The first step in any business disagreement is to clearly understand the nature of the dispute. Is it a minor misunderstanding that you could resolve through a simple conversation? Is it a complex matter involving significant funds, key business operations or third parties like contractors or customers?
If the dispute is complex and has significant legal consequences, it is important to consult a lawyer early on. They can help you understand the scope of the issue and the ways that your decisions could impact the company.
2. When communication fails
Often, the first step in resolving a dispute is to discuss the issue through direct communication or mediation. However, if you have tried to solve the issue nicely and talks have failed, or if the other party is not responding, it might be time to get legal advice. A lawyer can help keep the communication going and suggest solutions you might not have thought of.
3. Before signing any contracts or other agreements
If the dispute involves renegotiating or ending contracts, or if you are presented with any agreement to settle the dispute, talk to a lawyer before signing. Legal documents are binding and might have terms that do not favor you.
A lawyer can check these documents to make sure the agreement is fair to you before you agree to it. They can also help you understand the risks involved and negotiate fair terms that reflect your current circumstances.
4. When the stakes are high
If the dispute threatens your business’s financial health or could greatly affect your operations, getting legal advice is crucial. Big disputes might involve significant amounts of money, valuable intellectual property, major decisions about the direction of the company or important business relationships. A lawyer can help you understand your legal rights and the best steps to take to protect your business.
5. When the dispute involves compliance or regulatory issues
Businesses need to follow a wide variety of laws on the local, state and federal levels. When a dispute involves a violation of these regulations, it can lead to fines, legal penalties or serious damage to your reputation.
Disputes that involve regulatory compliance or legal violations need immediate legal attention. A lawyer who understands your industry’s regulations can advise on compliance and help reduce any legal risks.
6. If the issue will probably end up in court
If it looks like the dispute will end in litigation, contact a lawyer right away. Lawsuits cost U.S. businesses billions of dollars every year, and the litigation process can be long, expensive and harmful to your business’s image.
A lawyer can guide you through the legal process, represent your interests in court and aim for a resolution that minimizes damage to your business. Getting a lawyer early in such cases can sometimes lead to settlements out of court, which can be less costly and more discreet.
Understanding when to seek legal advice during a business dispute can save your company time, money, and stress. By recognizing these key moments to involve an attorney, you can handle current disputes and safeguard your business’s future.