Small businesses are often victims of lawsuits

There are many reasons why more than half of small businesses in the U.S. fail within the first five years. Sometimes, it's due to a poor economy. Other times, it's due to lack of business skills on the part of new owners—after all, it's easy to dream about being your own boss, but much harder to actually do it.

In addition, many small businesses don't have the resources to defend themselves against costly lawsuits.

This is a growing problem. According to the U.S. Chamber Institute for Legal Reform, more than one-third of all small business owners have been sued. Sometimes these lawsuits are for legitimate purposes. Other times, they are the work of patent trolls. Either way, the damage is done—seven out of 10 small business owners told the Institute that a lawsuit would force them to hold of on hiring or cut back on employee benefits.

"In many cases, fighting a lawsuit, even one without merit, can be more expensive than settling out of court," wrote Garry Bradford, a contributor to the Bay Area Citizen. "Unfortunately, predatory personal injury lawyers count on this fact and file abusive lawsuits hoping their victims settle—and line the plaintiff's attorney's pocket—rather than opt for a trial they cannot afford."

This is why small businesses need to work with an attorney who knows what it is like to run a business and understands the difficult market forces that owners now face. By consulting with a Phoenix business attorney, owners can defend themselves from lawsuits while maintaining their ability to stay in business.

Categorised in: Business Law

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