As a small business owner, your priority is to keep your company profitable and growing. Unfortunately, that can become hard to achieve when a dispute leads to commercial litigation. Don’t underestimate the impact of commercial litigation on your small business. Instead, read on to understand the risks and learn how you can avoid them.
The Financial Cost of Commercial Litigation
The most obvious effect of commercial litigation on your small business is the financial cost. Depending on the dispute and the legal issues in question, you could be looking at months or years of attorney’s fees and other legal expenses. If you lose the dispute, you might incur additional expenses, such as having to pay the other side’s legal fees, a judgment against you or your company, or fines and other regulatory penalties. These expenses can keep you from investing in new equipment, hiring new workers, or paying for marketing or advertising services to expand your market share.
The Operational Cost of Commercial Litigation
Beyond the cost of litigation, the time you spend thinking about and contesting the dispute is time you’re not devoting to managing and growing your business. If the dispute drags on for months or years, the opportunity cost for your business can be substantial and keep you from pursuing new markets or developing new products or services.
Commercial litigation can also impact employee morale and your ability to hire or retain key workers or managers. Your management team might look for new opportunities if they’re worried about your company’s future, and potential hires might decline job offers because they’re concerned about how long you might be able to afford to retain them.
The Reputational Cost of Commercial Litigation
All business relationships are based on trust, but small businesses depend on these relationships more than large companies. If your vendors, suppliers, or other business partners learn you’re involved in a legal dispute, they might cut ties with you or take other action, as they may not want to be associated with someone involved in commercial litigation. In turn, losing these relationships can do irreparable harm to your small business.
Another factor to consider is how commercial litigation can impact relationships with your customers or clients. If they discover you’re involved in a legal dispute, they might take their business elsewhere, depriving you of revenue when you’re already facing financial stress.
Reducing the Impact of Commercial Litigation on Your Small Business
Fortunately, there are proactive steps you can take to minimize the effects of commercial litigation and keep your small business healthy and growing. Here’s what you can do:
- Invest in insurance coverage – Purchasing and maintaining professional liability insurance coverage helps your business by providing financial protection in case you lose a dispute or want to settle to avoid a prolonged legal battle.
- Consider alternative dispute resolution – Trials are expensive, time-consuming, and unpredictable. Mediation, arbitration, and other alternative dispute resolution methods can help you find a quicker, easier, and cheaper method to end the dispute and get back to work.
- Seek legal assistance early – While you might be concerned about the expense of retaining legal counsel, doing so early can save you considerable money in the long run. A commercial litigation law firm like Kohan Law Group can help you find the fastest method to resolve the dispute while protecting your company’s rights and interests.
Contact Our New York Commercial Litigation Lawyers Now
Kohan Law Group understands the legal pressures small businesses face in New York. We can find a quick, cost-effective resolution to your commercial litigation dispute. Call us today or complete our contact form for a free case evaluation.