As a business attorney, my job is to help clients plan ahead, memorialize their key business transactions and relationships in writing, comply with applicable laws, and sleep easier at night.  In that regard, I often remind business owners and executives that litigation is more often than not a horribly inefficient and expensive way of resolving (or attempting to resolve) problems.  Sometimes, litigation is unavoidable, but generally speaking, resolving disagreements through a negotiated resolution will be in everyone’s best interest.

Even the direct costs of litigation–legal fees and expenses, lost productivity–can be frustratingly unpredictable, but one should never underestimate the possibility of indirect costs of litigation.  The recent backlash against Paula Deen is a classic example of the collateral damage that can result from civil litigation.  Ms. Deen’s admission during a deposition that she had used racially insensitive language in the past quickly became front page news and appears to have had an immediate backlash on her public image and at least one of her contractual relationships.

Could all of this have been avoided through a negotiated, confidential out-of-court settlement?  Perhaps, perhaps not. In any event, the point is that you would be wise to think carefully and strategically before taking someone to court or devising a defense strategy if someone sues you.  The downsides of litigation might surprise you.