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Minimizing Costs And Risk

The Controllers Council stated in 2023 that many American companies are minimizing costs in the face of inflation and potential recession. The World Economic Forum (WEF) also notes that there is a high probability of a “hundred-year event” within any given decade, and these events highlight the need for effective risk management. When minimizing costs and risk, company leaders may need to consider the various implications of their decisions. Some of these implications are difficult to predict. For example, minimizing costs in one area might increase costs in another aspect of the business. Risk management in one sector might also create new risks in different areas. 

In addition, cost and risk are often correlated with each other. Minimizing risk may increase costs, and vice versa. When facing these complex decisions, business leaders may want to consider the legal implications of the coming changes. An experienced business law attorney in New York may be able to help with certain aspects of minimizing costs and risk. Continue this conversation with Schwab & Gasparini by contacting us at (315) 422-1333 for our Syracuse Office, (518) 591-4664 for our Albany Office, (914) 304-4353 for our White Plains Office, or (914) 304-4353 for our Hudson Valley Office. 

How to Minimize Legal Costs in the Business World

One of the most obvious ways to minimize legal costs is to avoid litigation. Litigation occurs when businesses and other parties attempt to resolve their legal disputes in court. Litigation generally involves the trial process, which can be time-consuming and expensive. Not only that, but trials are also inherently unpredictable. There is no real way of predicting how a jury or judge will react to a given situation, and the trial could result in a verdict far more costly than anyone could have predicted. Alternatively, a trial can result in a verdict that does not provide sufficient compensation to the aggrieved party. 

Alternative dispute resolution (ADR) is therefore a preferable alternative to litigation for many businesses in New York. ADR involves private negotiations through methods like mediation or arbitration. During these private negotiations, both parties attempt to find a solution that serves their mutual best interests. By keeping the dispute out of court, businesses can also protect confidential or sensitive information that may otherwise go on the public record. These details might include embarrassing allegations or trade secrets. ADR is usually far more affordable than litigation, and it may make sense for companies focused on minimizing costs. 

How to Minimize Legal Risk in the Business World

When it comes to minimizing legal risk, business leaders may consider various proactive and reactive steps. For many entrepreneurs, the first step is to choose a business structure with limited liability. While sole proprietorships offer certain benefits, they make the owner liable for the debts and negligence of the company. This includes lawsuits that can potentially threaten the personal assets of the owner. For example, the owner of a sole proprietorship might have to sell their home to pay for the costs of a personal injury lawsuit against their company. Business structures with limited liability include limited liability companies (LLCs) and corporations. Partnerships also offered shared liability between partners. Entrepreneurs can minimize legal risk by choosing these structures before engaging in any business activity. 

After the business is established, entrepreneurs should develop strategies to evaluate risk. What kinds of lawsuits might the business face in the future? Different companies may face different risks depending on the nature of their products or services. For example, a brick-and-mortar restaurant might face premises liability lawsuits. On the other hand, an artificial intelligence startup might be more concerned with the threat of copyright or piracy lawsuits. A company that manufactures products may be more likely to face product liability claims. Whatever the case may be, companies should evaluate their specific legal risks before developing appropriate strategies. A restaurant might counter the threat of premises liability claims with extensive safety training for its employees, for example. 

Contracts Can Help Minimize Costs and Risk

Business contracts can minimize both costs and risk. First, contracts often mandate arbitration for any legal disputes. By ensuring ADR always occurs as a first step before litigation, companies can reduce legal costs and resolve their disputes privately. Contracts can also help mitigate costs in other ways, such as ensuring price stability for suppliers and manufacturers. Contracts may outline financial penalties for those who violate contracts or fail to meet their obligations. For example, a supplier who fails to provide a distributor with an order of products on time may have to pay that supplier additional fees under their contract. These contractual safeguards can mitigate losses associated with unexpected supply chain issues. 

In the same way, contracts can mitigate the risk associated with doing business. Aside from relationships between different businesses, contracts can stabilize risks associated with employees. Employees with intimate knowledge of trade secrets may pose a risk when they leave for other organizations. Non-compete clauses can help mitigate these risks, ensuring that the departing employee must wait a certain amount of time before starting a competing business. Contracts can also safeguard against the poaching of top talent. For more information on how contracts can mitigate risk while minimizing costs, consider speaking with Schwab & Gasparini. 

Learn More About Minimizing Costs and Risk With Schwab & Gasparini

Each company faces different challenges when minimizing costs and risk. While some companies might operate in the same sectors and experience the same issues, it is difficult to assign universal rules and strategies to individual businesses. No matter how experienced or knowledgeable an entrepreneur might be, it is also impossible to predict the future. The modern era has proven that sudden, once-in-a-lifetime events can completely change the business world. When facing these challenges, it may help to work with an extended team of professionals with varied knowledge. One example might be a business law attorney in New York who may be able to help entrepreneurs minimize legal costs and the risk of future lawsuits. Those who wish to take a step beyond online research can contact Schwab & Gasparini. We serve New York businesses in Albany, White Plains, Syracuse, and the Hudson Valley.

Mon Jan 5 2026, 12:00am