Subscribe
Share
Share
Embed
OK at Work, hosted by Offit Kurman attorneys Russell Berger and Sarah Sawyer, is a weekly podcast that discusses current events and legal issues impacting business owners. From updates on the ever-changing employment law landscape to the risks and benefits of integrating AI into your workplace, subscribe to stay up-to-date on issues and events that may impact you and your business.
Sarah Sawyer: Welcome to this
week's OK at Work with myself, Sarah
Sawyer, my colleague Russell Berger
with attorneys at Offit Kurman.
And today we are talking about
managing legal costs and risk.
We talk a lot about the risk part.
Often, obviously on OK at
Work, sometimes the costs.
But yeah, as a business owner
a lot of times a lot of legal
things come up that are expected.
You've got a handbook review, you've
got certain just day-to-day things,
contract review or just different things
that come with running the business.
But then you have those higher
budget items like litigation
or conflict or challenges.
And depending on what's going on in
the world and in, the legal landscape,
those costs might be more likely to
occur, they might be higher than you
might be anticipating in certain years.
There's a cyclical nature
and flow to this sometimes.
Sometimes it's random.
But I Think it's something that
obviously business owners have on
their mind that they need to plan
for as a cost that might happen.
But what are some things that,
business owners should think about
when it comes to legal costs,
Russell, and planning for that?
Russell Berger: Yeah.
Well, one, and you're alluding to
this, is that, litigation's a lot
harder thing to budget for and plan
for than the fixed cost of associated
with routine compliance, like
updating your handbook every year.
You ask your lawyer, how
much is that gonna cost?
You get a pretty good estimate and have
a pretty small margin of variation there.
Same thing with like employment
agreements or, operating agreements.
Any of the things that
we've said over the years
on OK at Work, are things you should do
up front, like they're easy to budget
for and they're easy to plan for.
Even when we're helping clients
proactively, if we had a whole laundry
list of these are the things on your legal
to-do list, you could budget for 'em,
you could space 'em out over time so that
you have a steady burn rate as opposed
to trying to do everything all at once.
Those are much easier things to
manage than litigation costs.
And that shouldn't stop you as
a client if you find yourself in
litigation from asking your lawyer,
like, what is this gonna cost?
What kind of, burn rate am I looking at?
Where are the big bumps gonna be,
usually that happens around discovery.
But where are these big, I
need to plan for my cash flow.
I need to have a sense of how much
it's gonna cost for me to have
this fight so I can make informed
decisions about this fight.
But it's much harder to nail
that as precisely as you could
some of these compliance things.
And frankly as you alluded to Sarah,
litigation or, hot button conflict
pre-suit those are big ticket items.
Far bigger ticket than like
getting the documents done.
Sarah Sawyer: Yeah and what happens
with local and federal laws or with
market forces can also impact, the
likelihood that people might be
picking more fights over things.
We've seen that and talked about it, in
various instances on OK at Work where
it's like with the government shut down,
for instance, where, certain vendors
and folks may not be getting paid.
And then that impacts people downstream
and then there's more conflict.
So sometimes you can see these things
coming and saying, all right, there's an
uptick in employment lawsuits because,
there's a friendlier EEOC, environment
or these types of things can shape what
might be going on with your workforce
or your contracts or your relationships,
your business relationships.
And they might be indicators that you
might need to be engaging more with
legal in certain years or certain
phases of your business and others.
So.
While it's a little bit unknown.
It is something you can somewhat
anticipate and plan for, and be
thinking ahead to just when those
things start to bubble up and happen.
And if you're suddenly starting to
pay a lot of attention to legal and
starting to see that risk maybe coming
down, that's probably a good indicator
to say I might need to be thinking
about this when I'm budgeting for
the year, for the next several years.
Or, in your strategy,
in your thought process.
Russell Berger: Yeah.
Right.
Well, 'cause if one of these things
goes sideways and you get dinged on
it and you have a big, legal bill
plus whatever, to remedy the thing
that went wrong, and you're spending
a substantial amount of money on that,
you're gonna add to that tab, well,
I could have fixed this for $5,000.
I'll spend the $5,000 and fix
it so it doesn't happen again.
And I think, one of our main points
is, that $5,000 fix or the risk of not
doing that relatively cost effective
fix is gonna hit some people, like, some
businesses are gonna be impacted by that.
And, you're playing the lottery
there and so, it's a lot more cost
effective to get to those things front.
And again, to dive back into
the litigation piece of it.
There are things you can try to do
within the litigation to cost control
a little bit, but because of the
nature of litigation, particularly
if you're a defendant you don't
necessarily have control over where
it's filed, how it's filed, whether
there's a quick resolution or not.
All these things at a minimum are gonna
take, some working with the other side.
So best to be in front of
this as much as you can.
And then if you do find yourself in
litigation, understand these things and
understand that there's a high degree
of variability even when you do have
a budget, so that you're not entirely
surprised by, when something goes sideways
during the course of a litigation.
Sarah Sawyer: Yeah always good to make
sure you're staying on top of that.
Well, thanks Russell.
We'll see you next time.
Russell Berger: Thanks, Sarah.