There are events in the life-cycle of any business that have the potential to snowball into a crisis of unforeseen proportions. It could be a bad set of financial results or a scuppered merger. Or perhaps employee lay-offs, a high-profile desertion to a rival or allegations of misconduct by senior staff. Or it might be a testing issue with a client. But while difficult business decisions may not be avoidable, especially in this tough economic climate, a crisis played out in the media can be managed or averted by taking the right steps.
Thanks to intense public and media scrutiny, many a corporate drama has become a real crisis. Andrew Harvey, a former journalist and co-founder of media training company HarveyLeach, attributes this to the demands of ‘24-hour news’. ‘In order to fill those 24 hours, journalists are becoming more inquisitive and pushing on issues they perhaps would have not pursued before,’ he says. At the same time, as a result of the expansion of their online operations, newspapers are publishing more in-depth articles to compete with round-the-clock broadcast news. Harvey adds: ‘Financial reporting now is going into greater detail in the mainstream press than it ever did… readers are expecting more.’
Meanwhile, with social media, bad news can rapidly travel to a worldwide audience with huge implications for a brand. Take Domino’s Pizza, which in 2009 faced an unprecedented public relations crisis after two employees posted a video on YouTube that was watched over a million times. It showed one of the two pranksters inserting cheese in his nose and placing washing sponges between his buttocks.
And businesses, including law firms, need to be aware that the nature of what constitutes a crisis is changing. The scenario is no longer confined to disasters such as an oil spill or a plane crash, notes Andrew Griffin, chief executive of Regester Larkin, an international reputation strategy and management consultancy. What happened to the News of the World, Arthur Andersen and Barclays emerged from the everyday activities of these organisations. What this shows is that the media and politicians now engage in an almost forensic examination of the activities of such entities and how they go about their business.
As a rule the legal profession, although now as vulnerable as any other sector to adverse publicity, is not as aware of or prepared for it as it might be, argues Griffin: ‘Professional services firms are a bit behind the curve in terms of crisis management because, until recently, corporate crisis has been associated with incidents rather than ongoing issues or chronic problems in an organisation. This is definitely changing. Clearly there is a huge amount for law firms to think about in terms of their own business and their role in helping their clients in a crisis.’
And the upshot for lawyers – in private practice or working in-house – is that they must learn more about communications. Richard Elsen, chairman of the Byfield Consultancy, a PR firm that specialises in reputation and profile-building for law firms, says: ‘Crisis management is about early identification when things start to go wrong. You get situations that appear to start off small and, unless the right course of action is taken, you end up with a snowball effect.’
Challenges for lawyers
First the good news: lawyers’ skills are highly rated. Harvey says: ‘Lawyers are important because they can stand back from a crisis and apply legal standards to an organisation’s crisis response.’ For example, he says, a lawyer’s training in ‘exactitude’ is of key importance, as news reporters can pore through company statements. Nicole Bigby, a partner and director of risk at Berwin Leighton Paisner, observes that lawyers ensure statements to the media are compliant with the organisation’s position while thinking through what the potential liabilities may be. They can help clients identify sources of risk involving legal or compliance issues. Further, Bigby adds, ‘lawyers have a very strong project management background’ that should come in handy in co-ordinating what can feel like combat situations when a crisis breaks.
The bad news is that in an age of instant communication, lawyers can seem to do too little, too slowly. In crisis management there is conflict associated with a lawyer’s eye for detail and accuracy, and innate caution. These can seem to conspire against the need for rapid action and decision-making. Harvey insists: ‘I have come across so many cases where crisis responses have been held up while lawyers go through the fine detail.’
Another problem is distrust of PR. Elsen says: ‘If you are facing a crisis with a legal dimension you have to prepare a communication strategy and a legal strategy that are perfectly dove-tailed. That way you cover both sides properly.’ For international lawyer Robert Amsterdam, whose clients include Mikhail Khodorkovsky, the billionaire oligarch imprisoned after defying Vladimir Putin, it is about taking a much more hands-on approach. Amsterdam, founding partner of law firm Amsterdam & Peroff, says: ‘The lawyer has to adopt a more aggressive role in reputation management. Reputational defence is at the nub of a lawyer’s job today.’
Amsterdam adds that ‘the idea that lawyers passively leave the presentation to PR firms is long dead. It needs to be a far more collaborative exercise because the interest now in terms of the internet is to get there first and develop the narrative first. That can’t really be done without a lot of legal input’.
Yet, Amsterdam says, lawyers tend to assume that everyone is as knowledgeable as they are about a particular case. ‘People should stop being tactical in communication and be more strategic, and develop a full-blown narrative for a client that explains the facts coherently.’
The second biggest problem is failing to understand that, even if a client wins in court, by this time it may be too late. ‘In an internet age our clients are found guilty or innocent within weeks and often way before they are even judged,’ says Amsterdam. ‘Lawyers need to redefine their role because all too often by the time you reach the courthouse your clients have already suffered irreparable injury.’
Dealing with the press
So, what can lawyers do to protect their clients and their own organisations? For Mark Stephens, a partner of Finers Stephens Innocent, the law is not always the best route when it comes to helping clients tackle a media storm. He says: ‘Many law firms take the view that the lawyer is always the answer and the court is always the answer. I take a different view: the law is very often not the answer and you can exacerbate things.’ Stephens points to the examples of footballers such as Ryan Giggs and John Terry who failed to prevent, with super-injunctions, newspapers from publishing stories of their alleged extra-marital infidelities. ‘You see that by going to court, those individuals have made things far worse,’ he says.
Stephens represented a footballer when a tabloid was going to publish a damaging story about an affair. But Stephens took a different approach. ‘It was true and it was impossible to do anything about it. I decided there was no point in seeking an injunction because it was very difficult to get a private injunction in those days and also it would have created a story. Trying to muzzle the press always creates more of a story than actually trying to deal with it,’ he says.
Instead, Stephens recalls, he rang the then editor saying: ‘Look we can have an argument about this, I can go to court, or we can agree the headline.’ Stephens was successful and got the paper to change the word ‘affair’ in its headline to ‘tryst’. Stephens says he ‘thought the average reader would not know what the word tryst meant or would think it was a threesome and they’d think the better of him’. It was ‘a one-day wonder’ and the story never resurfaced. ‘You can defuse cases with a certain lightness of touch, whereas if you come in and start to become angry that becomes a problem,’ he counsels.
Mind your language
Stephens, who increasingly works with PR professionals, advises talking to them ‘in their own language. I won’t naturally assume that the lawyer’s route is the best route, in fact probably the contrary’. Elsen concurs: ‘If you use legal gobbledygook you turn everyone off. What you don’t want to do is be seen as either uncaring or arrogant.’
Lawyers should avoid using constructions such as ‘no comment’ and ‘subjudice.’ As Elsen explains: ‘If you say no comment or if you say it’s subjudice, often when a story is printed that really makes you look as if you have got something to hide. Now the flipside of that of course is that you can say sorry and it does not mean you are admitting fault or wrongdoing.’ Harvey explains that there is ‘a subtle difference’ between apology and sympathy. ‘If there has been an accident, clearly at an early stage lawyers will be very wary about admitting liability. If you apologise, it sounds as though you are admitting wrongdoing. If you express sympathy to victims you are not. You can say, "we send our sympathy to those who have suffered but at this stage we don’t know the cause".’
If a tardy response is bad and silence even worse, that does not mean journalists will expect a spokesperson to go into much detail in the initial stages. ‘When a crisis breaks the media wants to hear from you. They might ask what are the reasons for the accident but they don’t necessarily expect an answer because you are perfectly within your rights to say it is too early to say,’ adds Harvey.
However, one can give them something to work with, even in the very early stages of a crisis. Griffin’s advice to his clients is that: ‘You recognise that you have got the problem, are seen to be doing something about it and are seen to be very honest about it.’ Several experts stress the importance of ‘always returning journalists’ calls’. They recommend finding as much as possible about the context of the article and the types of story the journalist tends to write.
When one is not in a position to reveal much, the other advantage of using an intermediary to deliver the message to the journalist, rather than someone with the full picture, is to avoid the risk of ‘suddenly breaking a court restriction accidentally’. This is doubly important as giving away too much information cannot be easily fixed. Elsen says: ‘Don’t fall into the trap of saying something to a journalist and then trying to say it was off the record. All you are doing is annoying people and you are making the journalist think "why should it be off the record now?"’
Lawyers can keep journalists onside by engaging with them in ‘peacetime’ too. Legal correspondents are usually appreciative of background briefings by senior lawyers on certain legal developments, notes Harvey. To help prepare for a possible future public storm, firms should also think about building a profile on social media, including Facebook and Twitter. Clare Rodway, managing director of Kysen PR which works predominantly with law firms and barristers’ chambers, explains: ‘If you don’t have any presence on a social media platform, even if you bring in the whizziest communication consultant there is very little that they can do. It’s all about building up following and that is one of the biggest reasons why all firms should think about having a social media presence so that they have that channel open when they have something urgent that they need to say.’
It is also good practice to regularly monitor internet blogs and social media sites to ascertain what negative stories are starting to arise, Stephens says: ‘What you want to do is to scotch rumours before they become "faction" and get reported in a newspaper. Once it’s published it’s too late. You have to monitor it early and have a rapid rebuttal unit which actually puts across accurate information.’
Despite a growing role for lawyers in managing reputational crises, they need to be conscious at all times of the impact on their firm when it is linked to an event or issue in the media spotlight. Although it sounds like a no-brainer, successfully managing a crisis is very much about preparing and planning for it. Yet this can be overlooked by many organisations.
Harvey says there is often an arrogant assumption among organisations that, come a crisis, they can deal with it: ‘What they forget is that a crisis can take on a life of its own, driven by the media that will start asking questions they have not bargained for. They can be wrongfooted very often by that.’ So, in addition to generally boosting awareness among staff of dealing with the press, how should firms and in-house legal departments prepare to manage communications and PR during a crisis?
First, an organisation should identify sources of reputational risk and monitor them. That essentially means being aware of weaknesses in the business: this could be possible negative financial results, the defection of key partners or clients, redundancies, or compliance issues. This is an important part of the job of BLP’s Bigby, who comments that there are inherent risks – as well as opportunities – in the firm’s expansion in markets such as Moscow, Singapore, Abu Dhabi and Hong Kong. ‘Emerging markets are potentially higher-risk markets to do business in,’ she says.
Second, there should be a team to deal with the crisis. Bigby says that her own firm has a ‘stand-by incident management team’ that comprises the firm’s senior management, the IT director and her. This team is tasked with doing the ‘initial tactical analysis of the issue and how we intend to respond to it’. She highlights the importance of having the ‘systems and process set up to be mobilised as quickly as possible and [pre-running] scenarios as far as you can to enable you to regain control.’
Law firms might also think about assisting clients with preparing for and managing their own crises. That is what BLP does. Bigby recommends that organisations create, like BLP, ‘a tactical response team’ that will include the relevant senior management, depending on the subject matter of the crisis (be it IT or HR or finance), the PR/communications person and the in-house counsel.
Controlling the agenda
Of course, it is not all firefighting, but even developments that should constitute a good news story need to be carefully thought through in advance, with a team in place to handle them. The recent merger between Russell Jones & Walker and Australia’s Slater & Gordon is a textbook case, argues Elsen. ‘That was a very smart move. They had first-mover advantage and they communicated it very well. They ensured there was no leak prior to the announcement and that isn’t always easy. Second, they announced it in a way that had a strong and positive impact. It’s about having a proper protocol in place and a proper chain of command, it’s about "need to know" around that information.’
Ultimately, good crisis management is interlinked with business strategies and decision-making. For example, law firms and other organisations should think of the reputational ramifications of how redundancies are handled: shedding staff in one go as opposed to making a series of redundancy announcements, or spreading the process out over a long period may avoid a series of negative headlines giving the impression in the press that the firm is in dire straits.
Part of planning and preparation could, for example, include saving valuable time through pre-prepared holding statements that contain the basic facts about an incident, letting people know that the organisation is dealing with the situation. These should be based on the types of crisis that are likely to hit an organisation. It could be done in principle under a few very simple headings including ‘our initial reaction’; ‘sympathy’, if other people are involved; ‘what action we are now taking’; ‘how soon we’ll discover what went wrong’; ‘and how soon we’ll put it right’. At the end of the day, what the public wants is ‘reassurance’, Harvey concludes.
Nina Barakzai, a Dell Corporation in-house lawyer who specialises in privacy law across the EMEA region, says lawyers should work with the communication team to prepare in advance answers to frequently asked questions from the press: ‘That should really be done up-front as soon as you have the issues.’ Even the best laid plans can leave an organisation feeling like a rabbit in the headlights. For Barakzai, who has been employed by several other large corporations including NTL Group and British Gas, what is important is to be confident that any information you put into the public domain is accurate.
‘How cautious you are really does depend on what your commercial liability is. I would say, though, that in many instances, particularly with social media, even if you are in the wrong, if you stick to facts and then move forward, you can still have a viable response to a crisis.’ Thinking creatively also helps. Barakzai cites Domino’s Pizza’s response to the YouTube video prank, which was arguably an unprecedented attack on its brand. On the communications front the US firm did not respond immediately, partly to avoid drawing attention to the controversy (although it promptly fired the two pranksters).
But when it did respond, it did not pull any punches: Domino’s Pizza posted on the video-sharing website its own official film of its CEO apologising and reassuring customers, and a Twitter account was set up to deal with consumer concerns.
As for the input of lawyers, it is just such original thinking, and fleet of foot, plus the more familiar territory of problem-solving that top the list when the going gets tough, argues Griffin. ‘Whether [as] general counsel of the organisation or the external adviser, the job of the lawyer in a crisis is the same as it is in peacetime: understand the legal risks associated with any particular decision. But you [also] want your lawyer in a crisis to be open-minded, flexible and very outcome-focused.’
Marialuisa Taddia is a freelance journalist