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Certainly no business relishes a lawsuit by a former/current employee. Putting aside the understandable and resulting anger, working with your attorney can result in an effective defense while avoiding incurring unnecessarily large attorneys' fees.
In general, if served with a lawsuit by a former/current employee, it is strongly recommended that an attorney be retained early. Since a response to the complaint is not required for 30 days, time exists to conduct an investigation (interviewing witnesses and reviewing documents [emails as well as the relevant personnel files]) – all before a response is required. This approach presents an opportunity to determine how to not only to respond to the complaint, but develop a discovery plan/strategy. A guaranteed way to pay substantial attorneys' fees is to turn the entire case over to a lawyer because you're too busy; you're ignorant about the legal system; or some other reason.
At the outset of the case, request a litigation budget that not only provides the cost but outlines the actual activity the lawyer anticipates and, more importantly, why he or she anticipates certain activity. The need for some activities will be self-evident, e.g., the deposition of the employee; however, others might not and questions should be asked as to why a particular activity is necessary. The budget should include what activity the attorney anticipates his or her opponent will undertake. Attorneys experienced in litigation and trying cases can effectively anticipate what his or her opponent will do in a given case understanding an attorney has limited control over what his or her adversary does during discovery.
The “scorched earth” philosophy some lawyers advocate can effectively discover the merits, or lack thereof, of the case, prepare for trial and assess the case for settlement. However, such an approach will also as likely wear down the employer's bank account with significant attorneys' fees. Insuring that the activity necessary to defend against a claim is completed can accomplish the same objective without needlessly depleting the employer's bank account.
In litigation, circumstances may, and often do, warrant budget revisions, and a flexible approach to the process is recommended. However, remaining active in the process will increase the employer's chances of controlling costs without compromising legal representation.