A total stranger shows up at your door and serves you with a notice that you are being sued. Now what are you going to do?

Litigation is an unfortunate fact of life for small business owners. There is nothing more disheartening than being sued, especially when you are putting everything you have into your company. Although your first reaction may be to panic, try to remain calm and collected. Your best chance of surviving the legal process is to approach the lawsuit in a rational and methodical manner. Here are some tips to help you get started . . .

Take Action

Some business owners refuse to recognize the significance of pending litigation. Instead of taking immediate action, they turn a blind eye to it and hope it will simply disappear. But sooner or later the lawsuit will be resolved, and the best defense you can offer your business is your willingness to take appropriate action. If too much time elapses, the courts can award the plaintiff a default judgment, which means you lose even if the merits of the case are on your side.

Seek Legal Counsel

Attorneys usually only have about thirty days to respond to legal action. Although that may sound like a long time, in legal terms it is a tight deadline, especially if you haven't already retained legal representation. Your first order of business should be to secure an attorney who is capable of providing your business with the best possible defense.

Gather Information

A truly competent attorney will request an assortment of information and documentation that pertain to the lawsuit. E-mails, letters, invoices, bills, contracts – everything is fair game. Your attorney may also ask you to compile a list of witnesses containing contact information and relevance to the case, as well as a written statement describing your response to the lawsuit's claims. No matter how busy you are, don't put your attorney's requests on the backburner. Get organized and gather the information as soon as possible.

Stay Involved

One of the biggest mistakes small business defendants make is to separate themselves from the legal process. Hiring an attorney is a good first step, but it is only the start of what could be a long, legal journey. To see the lawsuit through to its successful resolution, you have to stay in touch with your attorney and on top of the many decisions that need to be made along the way.

Devise a Strategy

Your attorney is responsible for recommending a plan for your legal defense. However, every hour the attorney works on the case represents an additional expense. So the key is to work with your attorney to develop a legal strategy that protects your company and fits your budget. In some instances, you may elect to focus the attorney's efforts in the areas of your highest exposure or seek a quick resolution to minimize legal fees.