Originally Published in Inside Counsel | April 17, 2014 | By Paul Mandell
Any effective crisis-management plan must include a competent team, clearly defined roles and responsibilities, and continuing post-crisis communication
Today’s volatile economic environment presents general counsel with an unprecedented amount of corporate risk. The increasing frequency of data breaches, FCPA violations, IP claims and everything in between underscores the growing importance of a general counsel’s ability to navigate the complicated landscape of crisis management swiftly and adeptly. While every crisis is unique and each response must be precisely tailored to the facts, any effective crisis-management plan must include a competent team, clearly defined roles and responsibilities, and continuing post-crisis communication. Below are three steps to help guide general counsel through virtually any corporate crisis.
1. Build the right team before a crisis
Building the right team is perhaps the most critical aspect of a crisis-management strategy. Stu Ingis, partner at Venable LLC and co-leader of the firm’s privacy and data security practice group, highlights the importance of the right team, noting, “At each moment of a crisis, there are decisions — whether about privilege, forensics, evidence preservation, or public statements and commitments — that affect the long-term posture of the enterprise. A successful crisis response team navigates the immediate crisis in a manner that protects — and in some cases even advances — long-term strategic objectives.”
Josh Galper, a former Orrick Herrington & Sutcliffe partner who co-led the firm’s legal crisis management practice, the first of its kind at a major law firm, and is now the general counsel of a tech start-up, adds, “The crisis team needs to be multi-disciplinary and proactive, both in planning for a crisis and responding to one, and it needs to have the authority to make decisions on a dime.”
In considering whom to add to the crisis management team, general counsel should include skilled outside counsel, an experienced public relations firm and internal senior-level colleagues from other departments. This collection of participants ensures a variety of perspectives and skills that can give the company its best odds at minimizing fallout and avoiding future mishaps.
Outside counsel is an obvious and necessary element of a crisis management team. A seasoned, respected attorney can both provide critical legal guidance and signal that the company is taking the matter seriously enough to ensure that any investigations or remedial efforts are objective and genuine.
A public relations firm with relevant expertise can assess dicey situations with a different perspective and find the best ways to minimize damage to a company’s public image, which can be as or more important than good legal counsel. When possible, general counsel should engage a PR firm that already knows the ins and outs of the business; however, it is best to use a firm other than the one that the company uses for its overall PR strategy. This avoids confusion about whether the PR firm is serving its routine PR duties versus directly assisting in the legal effort, which can be important in the context of privilege.
Finally, the general counsel should be sure to include a variety of senior-level internal colleagues. These individuals can help identify specific issues relating to clients or employees that require specific attention, as well as help coordinate rigidly consistent internal and external messaging.
2. Define roles and responsibilities
While the right team is critical to crisis management, simply assembling a great team is not enough. Rather, the crisis management team needs a clear set of roles and responsibilities, as well as clear leadership, to ensure that any crisis response is both rapid and well coordinated. A disjointed group giving mixed signals or following differing plans can both jeopardize the company’s public image and heighten legal risk.
For any crisis that poses legal risk for the organization, which surely includes most crises in the U.S., general counsel should coordinate the efforts of the crisis-management team. Initially, the general counsel should work with relevant senior-level colleagues to assemble background and expertise that could be useful to both outside counsel and the PR firm. Equipped with this knowledge, outside counsel can conduct fact investigations, provide objective risk assessment, and identify potential experts and useful assets in any subsequent litigation. The general counsel should also provide direction to the PR firm, and ensure that PR strategies align with company goals and current public image. However, general counsel must be patient and trust in the judgment of the chosen firm’s decisions.
3. Debrief and strategic future planning
After the immediate threat of the crisis has passed, it is vital to regroup and discuss the strengths and weaknesses of the response. The team should focus on analyzing thoroughly the root cause of the crisis and determine whether the problem is systematic or a one-time issue. After identifying vulnerable internal functions, the general counsel can begin establishing any necessary new company protocol and policies. Outside counsel can track changes in the relevant regulatory framework to help the company plan for the future. The PR firm should monitor the company’s public image and continue to assist with positive PR campaigns. Above all, the crisis-management team must keep an open dialogue with one another to ensure that any lasting effects of the crisis are handled in a timely manner and the right measures are in place to prevent a future crisis.
As recent high-profile cases demonstrate, the question facing general counsel no longer seems to be simply whether a crisis will hit, but rather what can be done to prepare for and minimize the impact of the next one. By building the right team, establishing roles, and keeping lines of communication open, general counsel will be able to successfully guide a company through any crisis.