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3 tips for business owners on how to avoid litigation

Owning and operating a small business is hard work. The months or years of toil you put into the business could all be at risk if a dispute goes haywire.

Going to court can be costly. No matter how successful your business is currently, litigation can quickly jeopardize your financial stability.

For this reason, it's important to prioritize maintaining good relationships with employees and entering into agreements with care. Below are some tips you can follow to avoid a business lawsuit and keep things running smoothly.

1. Improve your communication

All business relationships require clear communication, from first introductions through final transactions. Carefully draft and proofread all documents - including contracts, letters of intent, purchase orders, letters and emails. Enlist a trusted attorney to make sure you aren't opening the doors to liability. And always keep lines of communication open between your business and other parties.

2. Do not ignore disputes

One of the most crucial ways you can avoid legal trouble is by addressing disputes head-on, before they grow into full-fledged battles. For example, consider:

  • Developing plans for identifying and evaluating risks
  • Establishing procedures for your employees to report problems
  • Allocating resources to deal with these reports

You can deal with many issues outside of court - for example, via mediation or arbitration - if you approach them carefully. Taking the right first steps goes a long way toward preventing costly headaches down the road.

3. Create an environment free of discrimination and harassment

Your business depends, in part, on employees doing their jobs well. For that to happen, their work environment should be respectful and professional. The last thing you want is for them to face struggles with bullying or harassment at work. Protect your employees - and your business -by developing and enforcing a code of conduct. Make sure you have policies in place against employment discrimination and harassment. Conduct regular trainings on these important topics, and take all complaints seriously.

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Robert Kaufman has been selected as a 2013 Top Rated Lawyer in ‘Commercial Litigation’ as will be published in the May issue of The American Lawyer & Corporate Counsel magazine.Alex Kaufman has been selected as a 2013 Top Rated Lawyer in ‘Commercial Litigation’ as will be published in the December issue of The American Lawyer & Corporate Counsel magazine.

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