By ROBERTA CODEMO
Business owners need to consider the bottom line costs and benefits before initiating litigation. While legal fees are one component, business owners often underestimate the disruption litigation causes their business and the emotional toll and stamina needed to persevere throughout the litigation process. Experienced business litigation attorneys can help explain the costs and potential benefits associated with litigation, as well as identify alternative methods of resolving a dispute.
In balancing the costs and benefits of litigation, business owners need to treat litigation much like they would a business transaction.
“It’s important to keep in mind the dollar value of the case when developing a strategy to litigate the dispute,” said John McCracken, who has been a partner with the Edwardsville-based law firm of Goldenberg Heller & Antognoli, P.C. since 2012.
It’s necessary to look at all the components of a case when weighing the potential burdens and benefits of litigation. “There are additional costs involved in litigation that are often overlooked, such as expert witness fees and the possibility of having to pay the other party’s attorney’s fees,” said Mark Goldenberg, founder and managing partner of Goldenberg Heller & Antognoli. “It doesn’t make much sense to pursue a $10,000 claim if, because of the complexity of the case, it will cost you $30,000 in legal fees.”
Litigation brings with it not only legal costs, but also intangible business costs. Business owners’ best use of their time is running their business. Litigation focuses attention away from business operations and poses a distraction for both the owners and employees, especially if employees are involved in preparing discovery responses, depositions, and appearing in court. Combined, this can lead to an overall decrease in productivity and profitability.
When circumstances warrant litigation, it is important to present a strong case in preparation for trial, while also being mindful of opportunities for a reasonable settlement. Assertive and purpose-driven trial preparation is key to both winning cases and settling cases. It is not uncommon for courts to order cases to go through a mediation process with a third-party mediator to see if the parties can reach an amicable resolution of their case. Other cases may go through an arbitration process or a court-ordered settlement conference. Trial preparation is critical in positioning a client’s case for resolution, whether through trial or an alternative means of resolution.
Litigation costs should not be an open checkbook, but should be purchased with a particular purpose in mind.
“Communicating with your attorney regarding your desired outcomes and expected litigation costs is critical,” said Mark Goldenberg.
In an effort to avoid disputes, minimize the risks of litigation, and ultimately protect the bottom line, businesses should memorialize deals in a signed document reviewed by an experienced business attorney. A properly drafted agreement can curb the risk of litigation for a wide range of business matters, including contractual disputes and enforcement, shareholder and partnership disputes, and employment disputes.
By engaging an experienced business attorney upfront in the drafting and reviewing of an agreement, a business can protect its bottom line by inserting certain critical advantages, such as caps on damages, attorneys’ fee shifting provisions, and dispute resolution procedures.
If litigation is filed against one of our business clients, a thorough review of their insurance policies may result in coverage for the business owner’s defense costs and alleged damages.
“Clients are sometimes surprised when we point out that they have insurance coverage for a particular claim being made against them,” said McCracken.
With more than 30 years of experience helping businesses navigate complex business litigation, the firm analyzes and develops litigation strategies to help clients achieve the best possible outcome.
“Our clients benefit from the deep knowledge base that each attorney brings to the practice,” said Chad Brigham, who has been a partner with the firm since 2017. “Our attorneys have a broad range of experience representing clients across all markets and industries.”
The end result of litigation most often is a dollar amount awarded in favor of one party. “While there certainly is an emotional component to litigation, and a feeling of victory in winning a case, a business owner should remain mindful of the impact litigation may have on their business’ bottom line,” explained Goldenberg.
By ROBERTA CODEMO