5 reasons why legal services shouldn't be overlooked in a recession

Legal advice can seem too expensive during a recession, but doing away with it in certain areas could cost you big time in the long run. Here are situations in which you should always consult an attorney.

by Diane Faulkner
updated May 11, 2023 ·  3min read

With inflation soaring and a recession looming, now might not seem like the best time to seek or maintain legal services. But if you work with contracts, own (or want to own) intellectual property, or have a business with even one employee, then keeping a lawyer on hand can ultimately be a cost-mitigating practice.

An illustration shows miniature lawyers protecting a lightbulb that represents an idea and a patent

Here are five situations in which it can hurt you to cut corners with legal.

Employee termination

Terminations happen regardless of the economy's state. If you find you need to perform one, a 15-minute call to a trusted employment law adviser could save you thousands of dollars in legal fees should a dispute arise.

"Employees are more litigious during a recession," says Deborah Brouwer, the managing partner of Detroit-based Nemeth Law. "The 2009 financial crisis led to layoffs, and employees filed an influx of discrimination suits as a result. Continued counseling helps avoid future litigation over necessary layoffs."

"The riskiest action a company can take is firing an employee," says David Miklas, an employment attorney and founder of Florida-based Miklas Employment Law LLC. "That tends to happen during a recession. The business might think it has good grounds or think it doesn't need grounds because it is employment-at-will."

"The riskiest action a company can take is firing an employee."


Hiring can carry just as much risk as terminating employment. During the height of the pandemic, employees fled the workforce for a variety of reasons. Two years on, people are turning back to regular employment. "Former employees who were part of the 'Great Resignation' may be reconsidering their decisions to leave the workforce and reapply for employment," Brouwer says. "Employers could see an increase in applications for employment from individuals in a protected age category." Guidance from a trusted employment attorney could help you avoid disputes in hiring.


"If you are transacting business, it is important for an attorney to review your agreements," says Jamie E. Wright, the founder of Los Angeles-based The Wright Law Firm. "For instance, in what state can you sue to enforce the contract? Who will pay for your attorney fees and costs? And what are the actual terms that can trigger a breach?" Having an attorney review contracts with these factors in mind could save enormous costs.

Intellectual property matters

During recessions, businesses might come up with new offerings to serve strained markets, but it's wise to seek legal advice while doing so, especially for registration and infringement matters. "Do you want to earn income off your idea? Do you own a name or an image?" Wright says. "It is important to have an attorney who can guide you through the process of registering your idea and protecting it."

Events risk mitigation

Wright also says to be mindful of liability issues when holding events. To protect you from lawsuits that could occur should someone become ill or injured as a result of participating in your event, "you need to know what kind of insurance to obtain or waiver to have people sign. In cases like these, you need a lawyer to advise you on how to minimize your liability," she says.

Predicting risk during a recession is just as hard as it is during a boom.

"I recommend you always have some budget for legal services, especially if it involves terminating an employee," Miklas says. "Often times, 'running it by legal' might only take 30 minutes, but the advice might avoid $100,000 in litigation costs, even if you eventually win the lawsuit."

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About the Author

Diane Faulkner

Diane Faulkner is a ghostwriter, content marketing strategist, and editor based in Jacksonville, Florida. She specialize… Read more

This portion of the site is for informational purposes only. The content is not legal advice. The statements and opinions are the expression of the author, not LegalZoom, and have not been evaluated by LegalZoom for accuracy, completeness, or changes in the law.