Employee Tip: Think of a Legal Claim Like An Investment

If you are an employee thinking about pursuing a legal claim (e.g. a discrimination charge against your employer), it is important you feel passion and emotion for that claim and your belief in it.   However, you should also take time to look at the claim from a different perspective.   Treat that legal claim as if it were stock or a money market account into which you were making an investment.

If you pursue a legal claim, like putting funds in stock, know you will have to make an Investment.  You may invest your money, your time, your work, and/or your emotion.  Sometimes, a lot of all of these.  Learn what investments you will likely have to make.

You should also learn the range of possible Results for that investment.    In the case of a money market account you are considering, you may learn it has a fixed percentage of interest, and be able to calculate $X-$Y earnings if you invest in that account.  In the case of a legal claim, if you invest in and win that claim, your Results could be about $A-$B in damages.  If you lose, your Result could be having to pay the opponent about $X-$Y in costs.  Know what’s on the table, so to speak, before you start gambling or assuming risk (whether high- or low- risk).

Understand there is Risk.  There is some likelihood you could wind up in the hole, e.g. lose your legal case and pay costs to the opponent.  On the other end, there is some likelihood you could get an excellent return- e.g. a high settlement payment- on your investment.

You can assess risk and results through Education.  How many employees win this type of claim?  Settle?  Are there statistics available?  What results does an attorney or judge say s/he typically sees for a case similar to mine?  What are all my case’s positive factors (e.g. documents supporting material points) and negative factors (e.g. witness testimony against me)?  How do each of my case’s positive factors and negative factors affect my overall risk?

With education, your choices will be Informed: you will know that if you pursue this legal claim, you will likely have to Invest $A-$B, the Risks are L, M, N, and the possible Results are gaining about $W-$X, or losing about $Y-$Z.

Some legal claims are “safer” and worth pursuing- namely, a low-risk, low-investment claim with a large financial result on the table.  Other claims are not worth pursuing- a high-risk, high-investment claim with a small financial result on the table.

Many potential legal claims are in the middle.

After you educate yourself about a potential legal claim’s Investments, Risks, and Results, that claim may conceptually appear similar to a money market (a low-risk place to invest high amounts of money, but with relatively small returns).  Or the claim may seem like promising but unpredictable stock (e.g. a high-risk, medium-investment stock with a potentially substantial return/result).

The main thing is that you educate yourself about the main investments, results and risks at issue, and keep these factors in mind when making the decision whether to proceed with a legal claim.

Do not ignore, for example, the fact that a legal claim would require investments of your time or money.  If an employee believes he will drop off a stack of documents at his new attorney’s office, and will come back a few weeks later to pick up the good results (this is not much of an exaggeration for certain [rare] prospective clients I’ve had), then the employee is overlooking the reality of investment.  That one usually has to invest significantly into something, in order to get a return that is significant.

If you put 10 cents into a money market account, you may earn 1 cent of interest.  Or you may decide to invest $2500 and thirty hours of work on a given legal claim that has (1) 50% odds you’ll win $10,000 to $25,000; and (2) 50% odds you’ll lose and have to pay $1,000 to $3,000 in costs to the opposition.  Should you make the investment?  I can’t say.  I can just tell you things tend to work out much better when employees consider the factors above.  When a legal claim is viewed as an investment and not just viewed from the angle of its emotional factors or “rightness.”

A legal claim is like a financial investment, and the civil legal system can be very good at rewarding investments.  Much better than it is in providing apologies, providing “vindication,” “proving a point” or satisfying other such emotional goals that are rarely attained and usually causal of waste in litigation.