When To Lawyer Up

The old joke goes; "What do you call a thousand lawyers at the bottom of the ocean? A good start." That might give you some indication of my bias when it comes to the question of litigation. The way I run my business doesn't tend to lend itself well to suing people. If I sue my clients, they don't come back. The thought of it makes me uncomfortable, because I'm a firm believer in trying to work things out amicably.

I've discovered, as you likely have, that this doesn't always work out in business. There are times when something happens, either through no fault of your own or by some accident, that you come face-to-face with civil law. Maybe it's debt collection, maybe it's contract enforcement, maybe it's something you built or produced that didn't work as expected. Whatever the reason, there's a time and a place to lawyer up.

I've known some business people whose first reaction to any situation is to come with both barrels blazing. I've known others who just roll over at the first sign of confrontation. Both extremes don't solve the problem. Perhaps you're wondering why a marketing blog is talking about lawyers and litigation. Simple. All customer interaction is marketing. Any type of litigation usually means you've exhausted your other options, and the client in question will no longer be doing business with you. There are dangers in jumping the legal gun, just as there are dangers in doing nothing. There are certain key areas from a marketing perspective that demand litigation as a last resort.

DEBT COLLECTION
Marketing? Really? Look at it this way. If you don't have cash flow, you don't have anything to market. Your cash flow directly affects how you run your business, from payroll to inventory to whether or not you make a profit. Suing someone for uncollected debt is a process with multiple, time-consuming steps with no guarantee of success. It's also public. There are many ways to mitigate legal action, most of which start with a good plan at the beginning of the relationship. Like a prenuptial agreement, a strong contract with expectations clearly spelled out, timelines set and remedies specified will show a prospective client that you are a serious business person. Drafting a contract is one thing lawyers do very well. This is an expense that will pay for itself many times over. More often than not, tardy or aggressive clients will back down with a strong contract on your side. The more solid your footing, the more easily you'll be able to collect money or solve client misunderstanding. If there's a benefit to you, consider offering an early payment discount. Add penalties for late payment. As with everything in your initial pre-nup, state it clearly. When you are faced with a slow or non-paying client, consider first the amount, the reason, and the length of the relationship. What percentage of your business does this client represent? Is an invoice for $100 worth jeopardizing your $100,000 client? And remember that you get farther with a gentle nudge than a swift kick. Invoices get lost, payables get delayed. Sometimes being the persistent squeaky wheel will move something forward. Using the legal system to collect debt should be your last resort. If everything else fails, this is the second time to contact your lawyer. An overwhelming majority of a lawyer's work is drafting documents, not actually suing people. The threat of legal action will often prompt clients to pay. Keep in mind that this will likely sever your relationship with the client. Use it wisely.

SLANDER, LIBEL, DEFAMATION
We live in an age where anybody can say anything about anyone, anywhere at any time. The web makes these types of negative comments permanent and nearly impossible to get rid of. Most of us have to shrug off a lot of these types of negative comments. Where the line is drawn legally is when slander, libel, or defamation take place. The trick is proving these have taken place. In the broadest possible terms, defamation is something about you or your business that is untrue and has the potential to cause damage. Slander is telling someone, libel is writing it down. Now, as any good lawyer would advise me (and you), I'm not a lawyer. Consult with one if you believe you or your business are a victim of this. From a marketing point of view, defamation and its two cousins are potentially devastating. It's important to monitor any information shared about you or your company on a regular basis. Monitor your social media, as well as your competitors'. If you believe defamation of some sort has occurred,  and can pinpoint the source, this is time to lawyer up. The first step is usually a "cease and desist" letter. Most of the time, this does the trick. A letter from a lawyer can be scary. If it doesn't stop the offensive action, your lawyer will be able to recommend an appropriate course of action. From a marketing point of view, keep the end in mind. Will going after someone who is venting worth any sort of negative publicity your company will receive?

COPYRIGHT INFRINGEMENT
This one is potentially the most damaging to your business. If you produce something unique, it's in your best interest to ensure no one copies it. Lawyers can help with copyright and patent registration, which is preventative medicine. Trademark your logo and your tagline. Place copyright notices on key marketing pieces such as your website, print collateral and signage. And don't be afraid of suing on this one. This is the only such infringement I would suggest running, not walking to a courtroom. Your business depends on your proprietary information. Defend it vigorously.

TRADE SECRETS
The same holds true for business processes, trade secrets and any type of information or documents unique to your business, that are essential for your business to remain competitive. Keep this type of information as close to the chest as you can. If employees need to know this information, having a confidentiality agreement (created by a lawyer) is your best prevention should someone become disgruntled and spill the beans.

Your business is sometimes like a battle. You have an arsenal of weaponry at your disposal. Using the appropriate weapon at the appropriate time will ensure the public's perception of you remains positive. If you have the reputation of throwing lawsuits around like a petulant child, you'll likely scare off potential customers. If you roll over and play dead, your business will tend to attract bottom feeders. A good lawyer is like a homeowners insurance policy - you'll likely never need it, but when you do, you'll be really glad you had it.