“Do you have time to talk? I need to run a situation by you.”
Grant owns a software company and one of his customers, Bill, stole Grant’s code to develop a competing product. Hurt and angry, he wants to sue Bill.
“He just copy-pasted the code into his own software. Now he’s gearing up to compete with me. I can’t let that happen…he has to learn a lesson.”
I know this thirst for vengeance, the desire for a judge to tell the world you were right.
My company once paid an HVAC supplier $10,000 and got nothing in return. Not even a nail. We seriously considered suing for the money and the principle. We chose not to because we knew one fact that many people have never considered.
Our legal system is too clunky and dysfunctional to solve contract disputes for the average small business. Attorneys know best how inefficient our court system is, but often it is not in their financial interest to highlight alternative solutions. I’ve witnessed too many business owners charge into lawsuits without considering the less obvious costs.
In my HVAC case, we would have spent more time and money in court than we could ever get back. Resigning myself to let the money go was like swallowing sour milk, every time I thought about it.
I had to at least try to steer Grant down the more prudent path. “It sounds like you have a strong case and valid reasons to pursue it, but are you willing to consider some reasons not to sue? ”
Grant hesitantly agreed, and I made the following case:
Even with a strong position, a lawsuit will realistically cost between $50k and $150k, and take two years to complete. Covid-related lease lawsuits that started in 2020 are just now going to trial in March 2022. How on earth could two sides argue so much about a restaurant breaking a lease during a once-in-a-century pandemic? Lawyers find a way.
Even if Grant wins, he may not be able to collect any money from Bill.
Like in any total-war scenario, neither the path nor the result is certain in a lawsuit.
The toxicity of a lawsuit can consume Grant’s creativity and enthusiasm for going to work each day, killing the engine of his entire operation.
Time, money, attention, energy. A lawsuit ties up all of these resources, preventing Grant from using them in other productive ways. He cannot use them to improve his software or scout new clients. Better software and new clients would also limit fallout from Bill’s actions, while actually strengthening Grant’s company.
The software industry is crowded, competitive, and has its share of bad actors. Even if Grant won, he’s only defeated one known troll. Is his long-term plan to sue everyone that crosses him? Or is it to be smarter and faster?
Will Bill learn any lesson from a lawsuit? Anyone who’s watched Nancy Grace knows that people who lose in court often emerge more emboldened than before. Bill will feel more pain if Grant outmaneuvers him in the market.
Grant appreciated this advice and promised to think about it. I only planted these seeds to question his desire to sue. They will take time to sprout, if they sprout at all.
Grant is unfairly pinned between bad options. A court might give him justice, but only at a predictable cost that could sink his entire business. Even when the correct path is visible, it can be the most difficult to take.
I wrote this essay as part of an amazing writing course, Write of Passage. Thank you so much to Quratul Ann-Mailik, Mike Woitach, Chris Wong, Jeff Yang and Jeffrey Waxman for reading my early drafts and sharing such thoughtful suggestions. I couldn't have published this first piece without you!