Demand letter or call: choosing the first move

The first factor is whether the relationship continues after the dispute. An employment matter where the employee is still employed, a vendor matter where the contract still has eighteen months to run, or a founder dispute where the parties remain on the cap table — these all benefit from the lower temperature of a call.

A relationship that has already ended — a former employee with a severance dispute, a counterparty that has terminated for cause, a founder who has departed — usually benefits from the documented record of a written demand. The temperature is already at zero. There is nothing to preserve.

The second factor is the strength and cleanliness of the evidence. A matter with a clear written record — a signed contract, a documented breach, a paper trail — tolerates a written demand letter early because the demand can reference the record.

A matter where the underlying facts are still partly verbal, contested, or developing benefits from a call. A demand letter sent before the evidence is settled creates a written position that may need to be walked back if the facts shift.

The third factor is what is known about the counterparty. A counterparty with sophisticated counsel, a track record of settling, and a business reason to resolve quickly tends to respond well to a precise written demand. The demand goes directly to their counsel, gets read, and triggers a structured response.

A counterparty without sophisticated counsel, or one that has historically been reactive rather than strategic, can escalate when a demand letter arrives unannounced. In those cases an opening call — to counsel if there is one, or to the principal if there is not — sets up a more productive written exchange afterward.

A meaningful number of matters are not yet ready for either opening move. The facts are still developing, the loss has not crystallised, or a procedural deadline has not yet been triggered. In those matters the right first move is to gather the record, calendar the deadlines, and preserve the option to choose between letter and call once the picture is complete.

Acting too early is the most common mistake in dispute work. The first move is the one that frames everything that follows — and once it is made, the alternative is no longer available on equal terms.