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The Real Cost Of Employment Lawsuits

There are several hidden and intangible costs of employment lawsuits. In addition to court and legal fees, many businesses experience serious losses that not only cut into their bottom line, but also cause long-lasting financial burdens. If you own a business and are concerned that your company is vulnerable to a lawsuit, meet with our Coral Gables, FL employment litigation lawyer immediately. Attorney Giselle Gutierrez has over a decade of specialized experience in employment law. The sooner you work with Exhibit G Law Firm, the better we can mitigate the costs and the long-term implications of lawsuits.

Reputational Damages

Lawsuits can foster feelings of distrust between the community, your clients, and employees. Other businesses may have reservations about working with a company dealing with litigation. Lawsuits take up a lot of time and money, and clients might be concerned that your business will be unable to fulfill its obligations while managing legal issues. In addition, employees can lose confidence in their managers and executives if they feel like the litigation was avoidable or that their employer is not taking accountability. All of these concerns can cause lost revenue or understaffing, resulting in added stress, frustration, and financial hardships.

Reallocation of Time and Resources

A lawsuit takes up a lot of focus and energy. Instead of being able to address operational or employee concerns, many owners end up shifting their focus to resolving litigation. As a result, minor issues can fester into more significant problems because they cannot be addressed in a timely manner. Furthermore, funding the company’s defense becomes a top priority, and funds that could have been invested to improve or grow the business are reallocated. The first expenses to get cut are usually related to extracurriculars like employee parties, bonuses, raises, and other perks. The loss of incentives can create discontent, leading to more HR conflicts.

You may need to update operational procedures in response to the lawsuit or to avoid similar issues in the future. These changes can not only stop or delay output, but it can also result in added expenses like conducting retraining, issuing reorganizations, and hiring consultants or advisors.

Higher Insurance Premiums

Depending on the circumstances of your legal issues, litigation may impact your insurance premiums. For example, if an employee is suing because of a matter related to a workers’ compensation claim or if someone was injured in an accident involving a company vehicle, your insurer may consider you a higher risk. Every additional expense lowers profits, and necessary resources, like insurance, can be hard to renegotiate if your company has a litigious history.

The true cost of employment litigation goes beyond lawyer fees and settlements. When your company is listed in a lawsuit, you should also consider the damages it could cause to your reputation, client relationships, and employee morale. The best way to avoid litigation is to take proactive legal action by hiring our employment litigation attorney at Exhibit G Law Firm. We bring a combination of creative thinking and expertise to every case. Call our offices today to schedule a consultation.

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