Most people would be surprised at the number of business owners (in San Diego alone) that choose to ignore lawsuits only to find out later that judgment has been entered against them for tens of thousands of dollars or even hundreds of thousands of dollars. The existence of the judgment is often discovered only after bank accounts are attached or a Sheriff shows up one day to conduct a till tap (collecting money from the cash register at the end of the day to satisfy the judgment). Others will rush to resolve the matter without the assistance of an experienced business litigator hoping that they can avoid the problem by agreeing to resolve the dispute informally. While informal resolution is certainly preferable, signing agreements without legal representation is extremely risky. The attorney representing the other side is armed with tools to maximize the benefit to their clients. The harm to business owners under this scenario can be incalculable. Usually, unrepresented business owners have no idea of the true extent of what they are agreeing to. For instance, a business owner who agrees to pay off a debt in twenty-four monthly payments may unknowingly stipulate to forfeiting all of her shares in a corporation (a disastrous outcome) if she is late even one time on her payments. An experienced business lawyer will build a cushion regarding late payments into any agreement settling the matter.
After "not panicking", the first thing any business owner should do upon being served with a lawsuit is to retrieve all insurance policies (including personal umbrella policies) that might in any way cover the business. In fact, any experienced lawyer would first ask about insurance policies. It would be malpractice to do otherwise. Moreover, attorneys aren't interested in spending time on lengthy consultation and evaluation if a case is eventually going to be turned over to an insurance company who retain their own attorneys to handle litigation. Businesses pay considerable premiums to protect themselves from risk. When sued, they shouldn't hesitate to tender their claims to insurers.