Protecting Your Business: Proactive Legal Strategies to Prevent Litigation

By David Hood
Partnership Chair

Business litigation is expensive and can disrupt business operations. It is time-consuming and stressful to deal with a lawsuit. However, a business may be able to avoid some lawsuits by using proactive legal strategies to protect the business. In this blog, our North Carolina business attorneys discuss several legal strategies to prevent litigation that could help protect your business. 

Always Use Written Contracts

One of the worst mistakes business owners make is relying on hand shake deals and failing to put their agreements in writing. Whether it is a client, partner, employee, or supplier, a written contract is one of the best ways to avoid disputes and ultimately business litigation. Written contracts convey the expectations of each party and reduce the risk of misunderstandings. They also include provisions for resolving disputes should they arise, including mandatory mediation or arbitration clauses instead of litigation. 

Maintain Accurate and Complete Documentation 

Thorough recordkeeping ensures that all communications and transactions are documented. In addition to maintaining financial records, implement policies to ensure contracts, agreements, and other business records are preserved and organized. Being able to produce written documentation to support your position in a dispute could end a dispute before it becomes a lawsuit.

Implement Risk Management 

Proactive legal strategies to avoid business litigation include recognizing and preparing for potential risks. For example, purchasing business liability insurance protects your company assets if you are sued. Additionally, following security and safety guidelines reduces the risk of workplace accidents. An attorney can help you create an asset protection and risk management plan. 

Protect Intellectual Property 

Intellectual property includes a wide range work product and it can be stolen if it is not protected. Intellectual property can be very valuable to your business and Infringement and misuse of that intellectual property can not only cost your business deeply, but it can lead to litigation as well. A proactive lawyer helps you register copyrights, trademarks, and patents to protect intellectual property. Taking these proactive steps gives you an advantage if legal disputes arise regarding your intellectual property. 

Legal Compliance

Local, state, and federal laws and regulations can be confusing and difficult to navigate. The type of business you operate dictates the regulations and laws that you must follow. Failing to comply with regulations and laws can lead to costly litigation to fight fines or penalties. 

A business lawyer helps you develop a compliance plan that ensures you remain compliant to avoid the cost of repairing the damage after the fact. Furthermore, an attorney ensures you have procedures in place that update you when law or regulation changes impact your company. 

What Should I Do if My Company Is Sued in North Carolina?

Ideally, you are aware of a dispute long before you receive a lawsuit. Involving a lawyer as early in the process as possible benefits you. An attorney works to resolve the dispute as quickly as possible for the least cost. However, if your company is sued, the attorney already has a thorough understanding of the situation and has been working on gathering evidence and documentation. 

If you receive a lawsuit, contact a business law attorney immediately. Prompt legal advice is the key to minimizing the damage from a lawsuit. Also, contact your insurance carrier if you have insurance coverage related to the dispute. Most insurance policies require prompt notification of claims.

Call Now for a Consultation With Our North Carolina Business Attorneys 

Seeking legal advice now can help you avoid litigation in the future. Our North Carolina business lawyers at Patrick, Harper, & Dixon can help you with proactive strategies to reduce the risk of litigation. We also employ effective strategies to resolve disputes before they reach the courtroom whenever possible. Contact our office to schedule a consultation to discuss your situation.

About the Author
David W. Hood, Partnership Chair of the Firm, is a trial attorney in a wide-ranging civil practice with over 200 jury trials to his credit. His concentrations include Business Disputes, Construction Law, Personal Injury and Collections. He is also a certified mediator, helping to settle cases pending in both state and federal court. He recently finished his term as President of the North Carolina Association of Defense Attorneys, the organization for lawyers representing business interests in civil litigation. Mr. Hood has spoken to lawyers and industry groups on such topics as evidence rules, contractor liens on real estate and contract funds, underinsured and uninsured motorist coverage, litigation ethics, and real estate claims.