When the chips are down in the business world companies have to manage legal risks a little better, especially considering that they are teetering on going out of business as it is and one lawsuit could put them over the edge. Even if they win the lawsuit the legal costs are simply not affordable during this recession. Worse, lawyers are trying very hard to come up with lawsuits right now to stay in business themselves, so they are willing to take questionable cases as long as they are getting paid to do so.
And unfortunately, we live in a "sue happy" litigious society and some folks that are failing are looking to filing a lawsuit to blame someone else or enforce a bad contract provision to save themselves. Yes, we have too many laws and too many lawyers and it's outrageous. Neverheless, there is one lawyer you need to hire to get your risk management in order. You may wish to look into an LLC for your company and to protect your personal assets. If you have not done that yet, well right now would indeed be a smart time to consider it.
Setting up an LLC for your small business is a wise idea, but there are reasons why you may need a "C-Corp" instead. You need to seek professional legal advice to figure out what is best for your situation and make sure the paper work is done correctly and filed appropriately so your LLC is legitimate. Perhaps this is something you'll think about in 2009 to dodge those ever present legal landmines.