Your Small Business Was Just Served with a Lawsuit. Now What?

january 21, 2021 | small business
Your Small Business Was Just Served with a Lawsuit. Now What?

Small Business Legal Issues

If you’re a small business owner, chances are, you try to avoid lawsuits like the plague. In addition to potentially damaging your reputation, they can be time consuming and extremely expensive. You may have thought you had done everything under the sun to protect your business from legal troubles, but unfortunately, now, you’re stuck with a lawsuit looming over your head.

What went wrong and what steps do you need to take? Regardless of why you’re being sued, you’ll want to take this matter seriously from the get-go; otherwise, you may face significant consequences. Time to reach out for help from an attorney, and get this mess cleaned up.

Below are our tips for what to do if you’ve been served with a lawsuit.

What to do:

Get legal support.

Consulting with an attorney could save you more time and money in the long run, rather than trying to go it alone.  A lawyer can help you navigate and understand your case. Has the plaintiff correctly served your company process? Have they filed within the statute of limitations?  Does the opposing side have a fair argument?  Is there a high likelihood of case dismissal? Additionally, attorneys will know how to potentially minimize the costly consequences of the case.

Trials can be expensive and having an attorney can keep you protected and focused on what you do best – running your business.

Get organized.

Keeping and preserving all relevant records is essential. Thoroughly review contracts, emails, documents and whatever else may be useful, and note any questions for your attorney during her or his review.

Know the pros and cons of proceeding with the case.

Is it worth it to settle? Possibly. You may be thinking, “But I don’t want to throw in the towel on this when I’ve done nothing wrong.” We understand the hesitation. However, in some cases, putting aside the satisfaction of a favorable court ruling could save a monumental amount of time and money that would be spent fighting the matter in court. Your attorney can help you understand your options and lay out the pros and cons for each.

Be honest and detail-oriented.

Tiptoeing around the facts of the case won't do you any good, even if the facts don't necessarily depict you in your best light. Show your attorney every piece of evidence relevant to the case (emails, calls, texts, contracts, etc.) and don’t try to hide anything, as the truth will reveal itself in court. Ask your attorney as many questions as you have and relate every detail of what happened to guide next legal steps.  

What to avoid:

Don't discuss the case with involved parties.

Have you ever heard the phrase “Don’t say anything if you don’t have anything nice to say"? This underestimated lesson applies here for good reason – anything you say at this point may be used against you in court. Don’t forget, you’re likely past the point of being able to settle the matter one-on-one. Now that attorneys are in the picture, the situation has altered.

Don't ignore it.

If served with a lawsuit, act immediately. This isn’t a matter upon which you can take a rain check – the clock starts ticking on your response deadline once you’re properly served. No matter how frivolous the lawsuit may seem to you, it’s critical to take it seriously if you want to maintain your business and its reputation.

Don't try to handle it on your own.

In some cases, self-representation may not be permitted, therefore attorney representation is required. And if the court does allow you to represent yourself, it’s rarely a good idea. Even if you think you know what you’re doing, a mistake can be detrimental to your case.

Your small business isn't alone.

Never give up your rights simply because you think fighting a lawsuit would be too much trouble or you fear hiring an attorney will be too expensive. Having proper legal defense is vital for your business. Learn more about trial defense.


Pre-Paid Legal Services, Inc. d/b/a LegalShield (“LegalShield”) provides access to legal services offered by a network of provider law firms to LegalShield members through membership-based participation. Neither LegalShield nor its officers, employees or sales associates directly or indirectly provide legal services, representation or advice. This is meant to provide general information and is not intended to provide legal advice, render an opinion, or provide any specific recommendations. If you are a LegalShield member, please contact your provider law firm for legal advice or assistance. 

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