The Risk of Lawsuits and How To Manage

lawsuit, nonprofit, manage

This post originally appeared on StartupGrind.com. Note, the following isn”t legal advice. If you are in the middle of a lawsuit, or believe a lawsuit is in the works, contact local counsel for advice. 

Before giving talks, I poll attendees to understand why they’re there. Without fail a reason, if not the reason, for attending is, “To learn how to avoid lawsuits.” Or in the words of sage football athlete Marshawn Lynch, they’re just there, “…so [we] don’t get fined.”

The problem is anyone can sue and anyone can be sued. Lawsuits are almost a cost of doing business. This doesn’t mean organizations can’t be proactive – they absolutely can. Instead, this means focus should be placed on awareness and follow-through. A few suggestions on how to go down the proactive path of managing lawsuits follow.

Manage, Manage, Manage

Outside of whomever invented the magical cronut, no one can see into the future. Anticipation and preparation are a better approach. Take a best guess at what could go wrong and ways to address the problem proactively. Use tools like risk assessments, legal audits, and third-party accountability partners to better understand what lurks under the rug of your business and where potential lawsuits may be hiding. Internal controls and policies are great ways to address the things you find. Also, as organizations grow there’s an important dance between scaling and keeping an eye on operations. Growth is a tricky time, where many of the foundational needs can fall through the cracks.

What’s Good For The Goose…

Apply rules with an eye towards consistency. Take some of the sting out of enforcement by creating written policies where it makes sense. Avoid writing an encyclopedia. Focus on keeping policies short(er), understandable and comprehensive. Comprehensive enough for someone to apply without using too much of their own discretion. In other words, don’t create a policy and poke it full of holes that leave people guessing.

Training is Fundamental

Pressed for time and resources, staff will do what they know – which is one of the biggest reasons why education is so important. And as a lawsuit defense, the newly aware staff will help you spot possible compliance or legal risk issues earlier.

Balance is key to avoiding burnout. Otherwise, eyes will roll and sighs will be sighed the minute Powerpoint is fired up. Mix things up with webinars, on-site training, posts and even staff teaching each other. Take time to befriend trainers, it always comes in handy when you have a quick question down the line. Especially when it’s related to the training or presentation they’ve given.

Surround Yourself With Experts

Which leads into my last point: you won’t know everything about everything. Have go-to’s, especially because efficiency is key for a startup. The types of experts you include in this list should vary between those you can go to with a quick question and those you can go to with something more in depth. Having experts you can bounce ideas off of and ask questions can make the difference between a small issue and a big problem. Starting early and having experts who grow organically with the organization is even better.

There’s no fail-safe to avoiding lawsuits. But the worst decision is to take a reactive approach. Focus on the things within your control and prepare where possible. In the event something does happen, you’ll be glad you got the head start.

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