“Marketers can’t focus on those things” I was recently told at a conference when I raised a question about a potential legal pitfall in a marketing plan.  “If I did,” said another, “I’d never get anything done.”

There is was again.  The justification for why legal stuff was a business roadblock.  They preferred to be blinded by success instead of immobilized by fear.  I understand.  It’s less work and a whole lot more fun to bask in the glory.

These entrepreneurial marketers are not alone.

The Rhythm Watch Co. appears to have a similar philosophy.  Who’s Rhythm Watch?  They are the watch maker who took the cell phone ringtone idea and applied it to clocks.  Their “Grand Nostalgia Clock” chime rings includes songs by famous artists, including Paul Simon’s “Bridge Over Troubled Waters.”

The Grand Nostalgia Clock concept was good.  The execution was not so good.  Nostalgia Clock failed to license Paul Simon’s song and now he has sued them for copyright infringement. 

Some folks will tell you that it’s easier to beg for forgiveness than to ask for permission.  Lawsuit math doesn’t work that way.  According to the Complaint filed by Simon, a song as famous as “Bridge Over Troubled Water” could command a licensing fee of at least $1 million.  The suit seeks damages of $10 million and that doesn’t include the cost of the lawyers to defend the case and management’s time to help locate documents (i.e. evidence) and testify in court or at depositions.

Bigger companies have bigger financial shock absorbers than small businesses.  Those extra resources make it easier to handle litigation speed bumps.  For small businesses, however, a suit like Simon’s could be devastating. 

While marketers are always looking for innovative ways to reach their customers, it’s wise for you to look both ways before crossing the street.  That doesn’t mean you need to be lawyers or engage in minutia.  It only means you need to recognize potential problems before you get flattened by them.  Otherwise, the street you cross could become a “Bridge Over Troubled Water.” 

No one likes to get sued.  It’s expensive.  It’s time consuming and nobody really wins, except maybe the lawyers.  

Apologizing may sound like a totally a counter-intuitive move.  However, some academic medical centers have discovered they can substantially cut their litigation costs by acknowledging preventable errors and apologizing for their mistakes instead of making excuses and denying them.    

It’s been reported that at the University of Illinois only one patient out of 37 sued after receiving an apology and at the University of Michigan Health System claims and lawsuits declined from 262 to 83 between 2001 and 2007, resulting in a 2/3 drop in legal costs.  Now that’s a cost savings you can take to the bank, including the drop in malpractice premiums.  

The issue of disclosure through apology is not an academic one confined to university hospitals.  Groups like the American Medical Association, the American Hospital Association, and the Joint Commission which accredits hospitals have adopted standards encouraging transparency and disclosure and many hospitals have written policies in compliance.   

Maybe these smarty pants doctors may be on to something.  They are recognizing that nothing morphs a reasonable patient into an indignant one — one who is ready to pull the pin out of the lawsuit hand grenade – than denial and concealment of an error.  Denial provokes fear that it can happen again and the concealment is nothing more than disrespect of the other party.     

Let’s face it.  No one likes being lied to, especially if they are paying the price for your mistake.  It makes them angry.  It provokes outrage.  It’s the kind of negative energy that sends them running to lawyers’ offices.     

You don’t need to be in the medical profession to benefit from the hospitals’ experiences.  The next time a contract dispute arises with a customer or vendor, ask yourself whether a mistake was made.  Be honest with yourself.  The same goes for an employment dispute, or any other business/ legal problem.     

In the end, a sincere and well timed apology can turn negative energy into positive energy.  It’s a lot cheaper than a lawyer and you can get on with your business.