Posted in Business Litigation
By Tony Liu, Founder and Principal Business Trial Attorney
In Summary
Getting sued can feel like the ground has dropped from beneath your business. This guide walks you through exactly what to do when you’re facing a lawsuit, from how to respond to what mistakes to avoid. Whether you’re already in the middle of litigation or just preparing for the worst-case scenario, this article gives you peace of mind and a plan of action.
When the Worst-Case Scenario Becomes Reality
You never thought it would happen to you. One day, a certified letter arrives—or worse, someone shows up and hands you a lawsuit. Whether it’s a disgruntled employee, unhappy customer, or shady business partner, being sued is one of the most stressful and confusing experiences a business owner can face.
But panic is not a strategy. And silence is not a shield.
This article gives you the clear-headed, legally sound steps to take the moment your business is sued, so you can protect what you’ve built, and even come out stronger on the other side.
Step 1: Don’t Ignore the Lawsuit
It may sound obvious, but ignoring a lawsuit is one of the most damaging mistakes a business can make. A court won’t wait for you to feel ready, deadlines are strict and missing them could result in a default judgment against you, even if the lawsuit has no merit.
Here’s what to do immediately:
– Open all legal documents carefully and check for the court date or response deadline.
– Calendar the deadline to respond—typically 30 days in California.
– Don’t contact the plaintiff directly. Anything you say can be used against you.
Learn more from the California Courts Self-Help Guide on your options after being served.
Step 2: Call a Business Litigation Attorney, Not Just Any Attorney
Not all lawyers are created equal. A criminal defense lawyer or your family attorney may not understand the complexities of business litigation. You need someone who’s handled contract disputes, partnership breakdowns, vendor conflicts, and employment claims, someone who understands how lawsuits impact your operations, finances, and brand.
What a business litigation attorney can do for you:
– Review and interpret the complaint
– Identify defenses and weaknesses in the lawsuit
– File a timely and strategic response
– Develop a negotiation or litigation plan that protects your interests
Schedule a consultation with our experienced Business Litigation Attorneys.
Step 3: Protect Your Communications and Evidence
You’re now in what’s called the ‘litigation hold’ phase. This means you must preserve all relevant documents related to the dispute: emails, contracts, text messages, meeting notes, invoices.
Destroying evidence (even by accident) can lead to sanctions or penalties, which may hurt your case.
Tips to preserve and protect:
– Inform your team not to delete or modify any relevant communications.
– Back up digital records in a secure system.
– Let your attorney decide what’s relevant, not your gut instinct.
Step 4: Limit Internal and External Communication
Once you’re sued, what you say, internally or publicly, can be misinterpreted or twisted. Train your staff to direct any lawsuit-related questions to legal counsel and avoid casual talk about the case.
Avoid these common mistakes:
– Posting about the case on social media (even vaguely).
– Venting to customers, vendors, or industry colleagues.
– Issuing an unvetted public statement.
Step 5: Don’t Let the Lawsuit Paralyze Your Business
It’s easy to become consumed by the lawsuit. But your business still needs to function. Your team, customers, and cash flow still matter. And yes, you can still win contracts, close deals, and grow—even while defending a lawsuit.
A good business litigation attorney helps you compartmentalize the legal fight so you can stay focused on your mission.
The SBA offers tips for keeping your business resilient during legal battles.
Bonus Insight: Sometimes, Settlement Is the Smart Move
Not all lawsuits end in dramatic courtroom showdowns. Sometimes, the most profitable move is an early settlement that limits legal costs, protects your reputation, and lets you move forward faster.
An experienced attorney will help you analyze the risk vs. reward and determine whether to fight or settle.
See Harvard Business Review on why many businesses choose to settle: Settling Out of Court
Frequently Asked Questions (FAQ)
What should I do immediately if my business gets sued?
Contact a business litigation attorney right away and do not speak with the opposing party or post about the lawsuit online. Preserve all related records and documents.
Can I ignore a lawsuit if I believe it’s frivolous?
No. Even baseless lawsuits must be answered formally in court. Failing to respond could result in a default judgment against your business.
How long do I have to respond to a lawsuit in California?
Typically, you have 30 calendar days to file a formal response once you’ve been served with the complaint.
Will the lawsuit become public?
Yes. Most lawsuits are public record, but your attorney may help minimize reputation risk through careful strategy, negotiations, or confidential settlements.
How much does it cost to defend a business lawsuit?
It varies depending on the case’s complexity, but costs can range from a few thousand dollars for a quick settlement to six figures for complex litigation. Early intervention helps control costs.
From Lawsuit to Leadership Opportunity
The moment your business is sued, you face more than just legal risk; you face a leadership test. How you respond impacts your brand, your team’s morale, and your company’s future.
At Focus Law, we don’t just defend your business—we protect your legacy. We’ve helped countless business owners in California take control of high-stakes lawsuits with confidence, clarity, and strategic foresight.
Don’t let a lawsuit define your future. Let’s talk before the situation escalates.
