November 09 National Newsletter   Don't Let a Drama Turn Into a Crisis - When the clients are feeling the heat and their firestorm is building   Written by Annabelle Warren

Meet Annabelle

 

Crisis and the legal practice can be divided into two key areas:

1/ The business entity of the law firm

2/ The clients of the law firm that are in crisis

 

Last month we looked at how low-level concerns can build into catastrophic events within a law firm.

 

Today we will explore how clients can be impacted by crises and ways that their legal team can offer support.

 

We aren’t looking at particular areas of law, such as defamation or trade practices. Our discussion today looks at social, economic, environmental and community issues that impact clients in a substantive to catastrophic manner (which of course may include litigation).

 

Clients need help in a public crisis

 

Many clients engage law firms to help with tough issues. These issues can quickly turn into very public dramas.

 

And when a crisis explodes inside one of your clients, their public relations people will probably put a hand straight out to a lawyer.

 

Will that lawyer be someone in your firm? If so, great. You can offer expert advice on legal process, potholes and options.

 

If not – another lawyer is taking your fees and building a very strong relationship with your client.

 

At the last ALPMA conference in August, around 25 practice managers were asked if they had worked with PR or communication professionals to help their clients in crisis. Not a single practice manager said “yes”.

 

Inhouse lawyers often work with communication advisors on a daily basis. Some of this work will be about public statements, advertising claims and contracts with suppliers. But when crisis hits, the lawyer and the PR person are often joined at the hip to handle issues such as:

Product recall
Illegal behaviour of a senior executive
Closing a manufacturing operation
Death on a worksite
Community disaster

 

Your firm may benefit from supporting clients during tough times with a crisis team approach to minimise the impact of legal issues within their world in crisis.

 

Support isn’t just reactive – it is also helping the client to assess potential areas of risk, understand the impacts in a diverse operating environment, and plan for eventualities.

Minimise the impact for clients

 

The clients of law firms need communication help to manage the social environment and community stakeholders around their legal issue. For example, imagine if your client had:

Spilled 6,000 tonnes of oil into Sydney Harbour
Employed a high profile paedophile
Was taken to court for collusive behaviour
Sold food products infected with salmonella

 

The outcome of your case or matter may be seriously impacted by the communication issued by your client, by the opposing side or by the public debate.

 

An example of public scrutiny affecting a legal outcome can be seen from a recent NSW case involving a sportsman that was suddenly settled out of court when the judge considered opening up the legal statements of claim to media scrutiny. Of course nobody has admitted that there is a link, but the unresolvable issues were quickly worked out after the threat of publication.

 

It is a wise counsellor who understands that reality often has no relationship to the outcome of an issue in the court of public opinion! Fighting only on a judicial playing field may not lead to an optimal outcome for your client.

 

Legal action can also escalate a low profile issue into a front page news story. Your client can be become the target of voracious media, community and special interest groups just because they have moved from ‘negotiation’ to ‘litigation’.

 

Those clients will need help with the pack which may be literally climbing all over them. You could walk away, or you could help them find someone who can develop effective messages and activities to minimise the chaos and mitigate negative impacts on their lives or their organisations.

 

In August this year we saw the tragic murder of the Lin family in Sydney. The family lawyer had media camped in their foyer and had to issue media statements on behalf of the family. The surviving daughter needed to be shielded from the ravenous pack of media.

 

If your client needs communication support, don’t ignore it - ask around for specialist help or call the Public Relations Institute of Australia. The PRIA website lists registered consultancies in all states and territories that can work for big companies or individuals in crisis. www.pria.com.au/consultant

The donut of crisis

 

When a crisis truly hits an organisation, there are only 3-4 people who are in the room 24x7. They tend to be the CEO, the lawyer, the PR and maybe the project manager or subject specialist.

 

During the “frying donut” phase, management decision making processes are shrunk into an immediate time frame. The decision options are also seriously restricted, and the information to support logical decision making processes is often not available.

 

People in the “frying donut” often feel loss of control and under siege. They feel that all eyes are watching them and their horizons are very short. Their first instinct is often to say nothing, tell no one and hide – a response that won’t fix the problem and might make it worse.

In the medium to longer term an organisation facing a longer term issue may set up a war room with an extended team. The CEO, the lawyer and the communicator will still be at the core of decisions and programs.

 

During the longer term mop up and recovery phase, there may also be a larger role for the legal team. There could be lawsuits ranging from insurance claims, loss of business, etc. Many contracts and legal arrangements may also need to be reviewed.

 

Using communication to resolve

 

With the increased use of mediation in the legal system, it can be seen that there is an increased emphasis on interpersonal communication for dispute resolution.

 

This same philosophy can be extended to organisations and companies or other people affected by multiple stakeholders. PR is a crucial mix of the strategy to reach diverse groups, listen to their concerns, create a conciliatory environment and explore potential resolutions.

 

One guiding rule though – remember to ensure that the facts get in the way of a good story. No amount of spin can withstand an onslaught of truth. So lawyers must be concerned about the facts held within statements.

 

This is a lesson that has been learned by the directors of James Hardie.

 

“In April, Supreme Court judge Ian Gzell found the 10 former company officers had breached corporate law in 2001 when they claimed in statements to the stock exchange and in a press release that a trust set up to compensate victims of asbestos-related diseases had adequate funding, when it did not.” ABC news website 20 August 2009.

 

Since then a number of James Hardie executives and company directors have been fined and banned from holding directorships.

More than the media

 

When a client is worried about the media, you need to ask why.

Are journalists physically beating on the door with questions?
Or are journalists a key method to reach customers, employees, government, activists, suppliers, neighbours and other stakeholders?

 

The answer to this question helps your client frame their response. It is essential to reach key stakeholders, but the media can be a very blunt object (and totally uncontrollable).

 

Good communication is generally layered across many techniques including personal presentations, emails, bulletins, chats, town hall meetings etc.

 

Direct communication is often crucial – in person, on the phone, via email, on twitter or through the letterbox.

Effective programs use a strong flavour of consistent and very clear language. Simple words, short sentences – something lawyers can use every day with their clients!

 

Law and communication can be reactive

 

A scenario showing reactive communication might be an environmental action group taking over a power station during a federal election campaign.

 

It would happen at 5am and executives would need to decide the response both physically and intellectually. Physical actions would be closing the power station and calling the police.

 

Intellectual actions would be working out the cause and relationship to the power generation firm. If it was related to the election and not the company, clear communication to authorities, employees, local community, suppliers, unions and the media could help neutralise damage to the company reputation.

 

As soon as possible a process would be in place to ensure the safety of workers, protesters and the ongoing operation of the plant.

The police and emergency services would be involved, and the legal team would oversee the response to ensure it met issues of probity, regulatory requirements and preparation for any court case around insurance or criminal activity of trespass and destruction of property.

 

Law and communication can be proactive

 

A scenario showing proactive communication might be a product advisory.

 

This might be in a situation where there has been no accident or incident, but that a situation has arisen which shows the potential for harm. While legal liability may not exist, moral obligation and risk minimisation dictates a proactive stance.

 

Think also of the day in court when the judge decides if your client knew about an issue, had the opportunity to react, but decided against it. How will that impact the outcome of any case or damages award?

 

Getting on the front foot by either recalling the product, providing safety measures or additional training can be a big boost for the reputation of the company.

 

This can also mitigate “catastrophic risk” that might mean the company is liable for un-payable damages if something did go wrong.

 

Practical help

 

---

Advice:

1/ Get professional help from a crisis specialist
www.pria.com.au/consultant
2/ Advise clients what can be said (not just the no-go areas)
3/ Explain the legal process in plain English – this is crucial
4/ Work with clients to identify options when they can speak
5/ Decide who is the only point/s of contact for statements
6/ Let team know about legal actions and outcomes
(Even mentions in court can excite media interest)
7/ Instead of “No Comment”, explain process or silence.
“All discussion of this matter is in the hands of the police.
Call them on XXX.”
“We will issue a statement following publication of the court
ruling next Tuesday.”

 

---

The media will report on issues. Occasionally there are court orders to stop publication – but these are very rare and often serve to inflame interest and discussion.

 

Today the public is often better educated about their rights to information and they have strong expectations to be kept informed. Regulators have high levels of authority, and there are better detection and recording systems for information from all parties involved in a crisis or issue.

 

At the same time we live and work in a highly crowded information space – with more TV, radio, online sites, tweets, emails and publications than ever before.

 

Helping a client understand the law, the legal process and building their ability to take action in this confusing storm of information will help lawyers provide a stronger service to their clients, and at a time when it matters most.