Legal Crisis Strategies : Crisis Communications Lawyer & Attorney : McDermott Will & Emery Law Firm : Risk Mitigation, Mass Litigation

There was a lot of buzz recently about a study conducted by the Stanford Graduate School of Business titled, “Detecting Deceptive Discussions in Conference Calls.” The study’s authors analyzed transcripts of nearly 30,000 conference calls by American CEOs and CFOs between 2003 and 2007.  The researchers studied the linguistic features of narratives, and found that  CEOs at companies that subsequently announced a significant restatement of earnings used significantly fewer self-references, more third person plural and impersonal pronouns, more extreme positive emotions, fewer extreme negative emotions, and fewer certainty and hesitation words.  Furthermore, the “deceptive” CEOs and CFOs used more references to general knowledge, fewer non-extreme positive emotion words, fewer references to shareholder value and value creation.  In sum, there was a relationship between non-specific, non-factual language, and descriptive emotion words like “fantastic” and “great,” and a lack of credibility in the substance of the presentation. 

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In time of crisis it is important for companies to establish a pro-active media strategy that includes working with a reporter to get a “predicate story” written. The predicate story tells the whole story—good, bad and ugly—in one place, and serves as a base line story for all subsequent media coverage.

Why is this a good idea? First and foremost, with many issues, and especially in a crisis or litigation, you want to get out ahead of a story. You want to get the facts in the press so that someone else does not get to the public first with distorted facts. The predicate story is the most effective way to do this for several reasons. 

Specifically, in a crisis, you want to get the story in and out of the media cycle as quickly and accurately as possible. A predicate story can help do this by being the definitive story on the issue. But, it can only be effective if the story covers all the facts—both good and bad. 

A predicate story also allows the subject an opportunity to get messages and on-the-record comments into the story. This will ensure that the coverage of the issue is balanced with your facts.

You may also be able to negotiate an embargo with a reporter writing a predicate story. In this agreement, a reporter will agree to not publish the story until a certain date. For example, if you are about to file a complaint against a defendant, you may negotiate an exclusive story to a reporter who agrees to wait to publish the story until the date the complaint is filed. This will give the facts in the complaint maximum effect in the court of public opinion, and generally bring attention to your case.

Start by finding the right reporter to write the story. It is always good to work with a reporter that you know and trust, but any reporter who has been balanced and thoughtful in the past is a good one to approach. Be sure to provide the reporter the resources he/she needs to do his/her job, such as access to key documents and people knowledgeable about the facts. Finally, remember that a predicate story will take some time to write; therefore, you want to start early to give the reporter an opportunity to investigate the facts and to get comments from others. If a predicate story is to do its job, it will take time. 

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One of the first rules of crisis management, whether in politics or in the private sector, is to close the gap to zero between public perception and the facts.

In the corporate arena, we frequently are retained by clients who have already been the victims of misleading negative headlines and stories that are biased or tilted in the direction of critics. This is frequently the case in litigation.  Plaintiffs attorneys know they must be skilled at getting into the media first, because most people perceive pure allegations in a filed complaint as “fact” if a newspaper reports them—and certainly that impression will grow if the response to the allegations in the newspaper stories is, “no comment, we are in litigation” or some vanilla comment such as “this is a baseless claim and we will prevail in the litigation” without any factual rebuttals. 

Thus the gap grows between the allegations (which are not fact, but just someone’s allegations of fact) and the reality of what actually happened and why. And corporations receiving bad advice, namely just the legal perspective of “no comment, we will litigate this in court,” will find themselves with depressed share values and a potentially poisoned jury pool—in other words, little option but to “settle” the case, usually for large dollars commensurate with the number of times the lawyers convinced the client that “no comment” or vanilla rhetoric instead of facts was the better strategy.

Now let’s apply these lessons of the need to get the facts out early and often to the current Obama administration difficulties in getting comprehensive health care passed. Most people, and certainly most of the Republican Party and the media, have portrayed public opinion as being overwhelmingly against the Obama health care plan. 

But the facts as demonstrated by respected public opinion polls do not support that general public perception.  The latest Washington Post –ABC News poll, conducted February 4 to 8, 2010, shows the public essentially split on President Obama’s and the Democratic Congress’s proposal—46 percent for, 49 percent against—essentially a dead heat, since that is within the margin of error of the poll (+/- 3 percent).  Even more fascinating are public responses when the three specific aspects of the proposal are spelled out concretely:

·        Require businesses to offer insurance – 72 percent to 27 percent in favor

·        Require all Americans to purchase insurance (the individual mandate) – 56 percent to 43 percent

·        Require insurance companies to sell to all Americans regardless of pre-existing conditions – 80 percent to 19 percent

Note:  These results prove that the American people overwhelmingly support a federal government mandate—to employers, to individuals, to insurance companies—to insure virtually all Americans.  This is contrary to what most opponents of President Obama and most of the media have written and believe.     

So how is it possible the Obama White House has allowed such a gap between public perception (and conventional wisdom) that the Obama health care program is so unpopular and the reality that American public opinion strongly supports the three specific and most important components of the actual program? 

The answer is a failure to communicate the facts effectively to the American people by the Obama White House and the Democratic Congress.  This is why the overall general question draws a virtual dead heat—whether people support the “proposed changes” of President Obama and the Democratic Congress—is so different from the results when concrete, specific, factual proposals are communicated, i.e., a federal mandate to private employers, individuals and insurance companies leading to near universal coverage. 

Crisis management Rule 101: get a simple (I like the number “three”) three-point message out as to what the proposal actually is, repeat it over and over again, and set up a war room/rapid response room to challenge every distortion that appears anywhere—on cable TV, on broadcast TV, on talk radio, on the internet, every day, everywhere.

If you don’t get your message out first and repeat it over and over again—containing facts, facts, facts, and not vanilla rhetoric—then the other side will, and in crisis management, you never get a second chance to make a first impression, and unfortunately, first impressions count a lot.

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