November 4, 2016
All businesses have legal needs. From forming agreements to defending them, legal professionals are essential to all sizes of businesses. While large companies staff their own internal legal department, many companies have small legal departments, sometimes a sole employee who may or may not be a licensed attorney. Even in companies with small legal departments, litigation is usually outsourced to private law firms in business litigation practice. The Michael Kim Law Firm, PLLC is a business law firm in Dallas, serving the transactional and litigation needs of small companies to growing corporations in Texas.
In any business, the need for legal advice and representation can arise from issues about products, services, employees, and the operations of the business in generating revenue, paying salaries and taxes. Where a business employs an in-house general counsel lawyer, their role often involves hiring private attorneys in specific legal practice areas to service the legal needs on an ongoing basis and when individually needed. A strong working knowledge and relationship among business directors and their lawyers is essential. A cumulative understanding of a business helps legal counsel give the best advice and representation.
There are aspects of litigation to consider when determining to hire in-house litigators or use a private business litigation firm.
How much does the business budget for legal expenses? It may be more cost effective for most businesses to hire private law firms and pay their negotiated hourly attorney’s fees instead of hiring a full time in-house attorney. The type of legal needs and the amount of legal work are considerations for a business in deciding legal staffing. The hidden costs to consider include the time it can take new legal professionals to become sufficiently knowledgeable to represent the business. Turnover can cost money, whether it be with in-house or privately contracted lawyers and law firms.
What can influence the decision whether to engage in litigation? When another business engages in activity infringing on your business and its profits there are several options to consider. Lawyers negotiating out of court and using credible leverage to reach agreements to settle damages caused by others can save the business money. It can be expensive to fully litigate a dispute. The fees for expert witnesses, legal discovery production, and investigators should be considered. Additionally, when lawsuits are filed, the public and shareholders can find out about active lawsuits. It is important your legal advisor can independently act in the best interests of the company, which can mean winning as well as saving money for bottom line consideration.
Non-monetary factors influencing lawyer and litigation decisions can also be significant.
Depending on how your business manages legal matters, company time can be factor. If legal matters are managed by in-house attorneys, they may have others in the business to whom they report and communicate for purposes of accountability and collaboration. The time it takes to be copied on and receive emails alone can be significant. By contrast, a private law firm may not need to communicate with so many of the business people and can represent the business with more autonomy.
As stated earlier, the cost of winning a lawsuit may exceed the net benefit. When the business objective is to maximize profits, it is important to manage and reduce costs. If the business is damaged by another and the damage is worth $50,000 in lost profits, for example, spending $100,000 to win the lawsuit, it might be better to take initial loss. One may consider whether there is long lasting value in proceeding with a lawsuit or avoiding one. Media exposure and reputation in the business community are relevant factors.
How well do legal professionals help the business reduce the risk of repeating mistakes? It makes no sense for a business to continue engaging in a practice that continues leading to lawsuits. Business directors should communicate with their legal counsel to learn how the business can learn lessons and make changes to better protect the business from loss and lawsuits.
As businesses grow and become more complex, there are opportunities to engage in new relationships with business attorneys and law firms.
When a company grows, it can merge with others and add new divisions. Change can bring uncertainty and unforeseen events and occurrences requiring legal attention. Working with privately contracted law firms like The Michael Kim Law Firm, PLLC, is advantageous when attorneys are experienced in working with a variety of business entities and know what can go wrong and how a wrong can be righted.
About us: The Michael Kim Law Firm, PLLC, in Dallas, Texas, is a full service business transaction and litigation law firm of experienced attorneys serving the Dallas-Fort Worth Metroplex.
The Michael Kim Law Firm, PLLC, represents individual clients and organizations with business and commercial law needs. The firm also represents both plaintiffs and defendants in general civil litigation, injury, property, employment and consumer matters.
To speak to an attorney please dial (214) 357-7533. Additional information about our attorneys and practice areas is available on our website.