How to Prepare for a Lawsuit: Read These 6 Tips If You're Suing or Being Sued
I often tell my clients that litigation rarely makes good business sense. And though that may sound strange coming from a litigation attorney, more than twenty years of experience has demonstrated how litigation can threaten to engulf, or potentially even bankrupt, a business or individual.
Generally speaking, litigation is expensive, time-consuming, exhausting and uncertain. However, in some instances, it is simply unavoidable whether you are the plaintiff or the defendant. So when one of my clients gets sued, or before they voluntarily enter the fray by filing suit, here are a few things I want them to consider.
Understanding the risks and challenges of getting involved in a lawsuit
1. Litigation is a marathon, not a sprint
This has always been true, but the lengthy nature of litigation and court delays are essential for clients to understand before entering into it. With courts still backed up post-Covid, most cases will take more than a year before being tried in state or federal court, if not longer. For example, a lawsuit filed against one client in 2021 wasn’t slated for trial until 2024—and was recently delayed even further.
Where and when your case is filed may dictate the timing, but know that no matter how prompt your attorney is, there is not much you can do when the court sits on a motion to dismiss for months on end.
2. Think before you ink
Litigation is expensive on a normal day. However, the cost of hastily putting anger into words or firing off an email or text without thinking it through can be very costly in business litigation.
The average person is often unaware of the depth and breadth of metadata that electronic discovery will uncover. What you send via text and email is, by and large, permanent. The same goes for social media platforms, such as LinkedIn and Instagram, and internal messaging platforms, such as Slack. Reactionary or threatening communications, especially texts or emails, will come out in discovery, will not benefit your position, and, in fact, can have profoundly negative implications.
3. Do the benefits outweigh the risks?
Deciding whether or not to litigate requires a serious cost-benefit analysis and an honest conversation with your attorney about the potential outcomes and costs. Under what is known as the American rule, parties to litigation in the United States must typically pay their own fees unless otherwise provided by contract, statute, or other applicable law.
Consider the costs of the litigation—both out-of-pocket costs and the time it will take you away from your business. Weigh these costs against the benefits you seek or are likely to receive due to the litigation. Sometimes the answer is clear. Sometimes it is not.
Before pursuing a long litigation path, I also recommend evaluating the opposing party and your ability to actually recover any judgment you may obtain. For example, does it make sense for you to spend $250,000 in legal fees to receive a $100,000 judgment against an insolvent business? Ask the hard questions and consider the outcomes before committing to the litigation path.
4. Talk to more than one attorney and find the best attorney for you
Remember the marathon? Litigation tends to be a years-long process, during which you’ll spend a lot of time with your attorney. Having a good working relationship with someone you trust is paramount. And the nature of litigation is such that your attorney will be deeply enmeshed in your business, which in the digital age often has blurred lines with our personal lives for any number of reasons.
Make sure the legal counsel you choose is someone you feel comfortable opening up to and with whom you can be 100% forthcoming. As I tell my clients, I can deal with bad facts, but I cannot address bad facts that you don’t tell me—and those bad facts will come out. I would much rather hear from my client that they were fired from a job for watching porn at work than learn it for the first time in a deposition.
5. Litigation is almost always more expensive than you anticipate
Litigation is costly, period, full stop. So costly that some businesses simply cannot afford it. Some disputes can be resolved early on for little cost expended. Other cases linger for years for any number of reasons, many of which are often out of the control of the counsel or parties.
Two key things impact litigation costs more than most people realize. First, as noted above, have a good rapport with your attorney, be honest about the facts, and don’t withhold information. Sometimes even clients don’t know what facts may be pertinent to claims and defenses in the eyes of the law. Second, the more information my clients give me upfront, the better equipped I am to hit the ground running, including evaluating the likelihood of settlement and the value thereof and, if there is no resolution, what the path to trial will look like.
6. Do discovery once and do it right
In my experience, discovery is one of the most costly aspects of business and commercial litigation. Hundreds of thousands of pages of electronic documents, emails, and text messages must be reviewed and produced, followed by the inevitable discovery disputes. So, do it right the first time. Hire a reputable third-party electronic discovery vendor to properly image the devices or gather all the necessary information. The financial output on the front end will save you time, money, and headaches on the back end.
Know the risks and challenges as you prepare for a lawsuit
Litigation isn’t always the right decision, and it is not always our choice to enter into it, but sometimes it is where we end up. Whether you find yourself on the precipice of litigation or are thrown into it unwillingly, take the time to consult with an experienced and trustworthy attorney (or two!) who can help you determine whether your case meets key success criteria or what the best path may be for you.
Clients who understand the potential risks and challenges involved with going into litigation will be far better equipped to handle the process overall.
FAQs about lawsuits
What are the steps to initiate a lawsuit?
A lawsuit or arbitration will be initiated by filing a complaint (state or federal court) or a demand (arbitration) setting forth the factual basis for your claims as well as the legal claims for relief, such as breach of contract, fraud, breach of fiduciary duty, etc., and the elements thereof, as well as damages.
Additional steps may be required before you can properly file a complaint or demand, depending on the basis of your claim. For example, certain contracts may require a notice of default and an opportunity to cure before litigation may be commenced. Some contracts require formal mediation prior to commencing litigation. And, certain claims, such as those against governmental agencies, derivative actions, or malpractice claims, may require additional steps before a lawsuit can be filed.
How do I prepare for a lawsuit?
Talk to an attorney. Or two. Find one that fits your needs and with whom you can work long-term. Take a deep breath. Reset your expectations. Litigation tends to be a marathon, not a sprint. Companies should issue a litigation hold internally and maintain all documents and communications related to the dispute, including emails and text messages. Check with your IT provider to ensure timed automatic deletions of information are turned off so that information is not inadvertently lost (which can cause huge issues and drastically increase fees in the long run).
Should I let someone know I'm suing them?
The short answer is it depends. There are certain situations where you may need to give notice before filing a lawsuit. Typically, by the time I file a lawsuit on behalf of a client the parties and any counsel will have first attempted to resolve the dispute without litigation and understand that litigation is the next step. I may even share a draft complaint with opposing counsel prior to filing in an effort to resolve the dispute. When the opposing party has retained counsel prior to the filing of a lawsuit and I am in contact with that attorney, then I will let them know we filed the complaint and ask them to waive and accept service on behalf of their client.
About the Author
Post by: Cara Thornton
Cara Thornton is a skilled lawyer with a practice focused on complex commercial litigation, including intellectual property, business torts, cannabis law, real estate, and other business-related disputes. Cara also serves as outside general counsel for corporate clients, advising on a litany of issues including contract and employment-related matters, formation and dissolution, and risk management.
Company: Fortis Law Partners
Website:
www.fortislawpartners.com
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