What is a nuisance number and why you should know yours

Litigation has been compared to war (on a certain level) because it is known as the means of last resort to solve a problem and at the end there are rarely any clear winners. This is largely because both parties end up spending a great deal of money, but they may not get exactly what they wanted in the end.

For small businesses, this fashion of litigation can be huge burden to their profitability. It is even more troubling when a lawsuit is largely baseless, but satisfies the basic requirements to survive a demurrer. Therefore, in order to prevail in a full-fledged lawsuit, the business must spend money to defend itself. This may be particularly difficult when a larger business with a larger litigation budget basically corners you and forces you to make a tough financial decision:

Do you give in and pay to make the lawsuit go away, or do you put your proverbial “money where your mouth is” and fight it out?

The answer is (or at least it should be) couched in what your nuisance number is. This number should be the amount you are willing to spend to make the problem go away, no matter how ridiculous you believe the claim is, how right you believe you are, and how certain you are that you would be able to defeat the claim in full at trial.

A nuisance number is important because it helps you put into perspective how important your continued business is in light of protracted litigation. After all, the more time you spend on a lawsuit, the less time you are spending on making money. 

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