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. 

• Email This
• Print
• Share Link

No matter what your crisis is, and no matter what your media strategy may be, the best way to manage a crisis is to respond to reporters and to do so in a timely manner. It may sound obvious, but too many companies fail to do this, whether because executives have stuck their heads in the sand, don’t feel prepared to talk with the media, or simply don’t make media inquiries a priority. But ignoring the media is a huge mistake that can be easily avoided.

No “no comment,” please!

When a crisis situation breaks, it is imperative to put together, at a minimum, a statement—no matter how short—that will serve as your response to media inquiries until you are prepared to provide further information. Even if it is something as generic as, “we are taking this situation seriously and conducting a full investigation.” Anything is better than a “no comment,” which can leave the public with the impression that you or your company has something to hide. 

Proactive Media Strategy

Depending on the circumstances, adopting a proactive media strategy can be the most effective way to manage a crisis situation. This requires some fact-finding ahead of time so that you can work closely with one or several reporters as events unfold. Even if there is some uncertainty surrounding the situation, building a rapport with reporters and providing them with the facts is the best way to get accurate, balanced coverage of an issue. News outlets can report the best facts you have on your side only if your provide those facts to them. Stated differently, take every opportunity to balance a bad story with all of your best facts—including the story of what you are doing to take accountability for what went wrong. This last step is the key to protecting your reputation and repairing trust among your stakeholders and customers in the aftermath of a crisis.

Rapid Response

Being prepared for the onslaught of media inquiries is a critical part of managing a crisis. We often work with our clients to set up rapid response operations, which is simply a small group of individuals tasked with receiving, organizing, and responding to media inquiries. Those in charge of responding to reporters should be one or two people who are very familiar with all of the relevant facts, statements, and/or messages (depending on your particular strategy) which should be vetted by executives and attorneys. These individuals should have experience working with the media, and should be prepared and available to return phone calls well within reporters’ deadlines.

When you are unprepared for a rush of media coverage, your side of the story becomes, “Company X was not immediately available for comment.” This is not as bad as a “no comment,” but it is a wasted opportunity to balance the story with good facts, and perhaps more importantly, a wasted opportunity to handle the negative facts. Obtaining balanced coverage requires ensuring that reporters have facts to report—whether positive or negative.

Conclusion

It is a worthwhile exercise to conduct a “fire drill” scenario to plan ahead for a negative event. Identify ahead of time who will comprise your team of inside employees and outside advisors that you will call when a crisis breaks. Make sure you plan for good communication and organization, especially when it comes to handling the media. Urge your executives to view each media inquiry as an opportunity rather than an annoyance, and you will see what the power of communication can do to shape public opinion.

• Email This
• Print
• Share Link

In the face of a recall, a disaster, or a crisis, too many attorneys counsel their clients to avoid apologizing and to avoid taking responsibility in order to minimize their legal exposure.  These lawyers would likely have their clients believe that doing so would “open the floodgates of litigation,” or “provide evidence of wrongdoing that would strengthen claims.”

The truth is that if your company was involved in a large-scale crisis, it will likely face some litigation or at a minimum, a government investigation.  And, there are many ways to take responsibility without stating that your company was at fault.  In short, focus on solutions and leave the finger-pointing for the courtroom. 

If there are a number of people and companies involved in the crisis at hand—there usually are—you may not be solely at fault, or you may not be at fault at all.  Nevertheless, it’s important to let the public, your customers, and your employees know that you are stepping up to the plate.  By stating that your company is, for example, “doing everything possible to rectify the situation,” or “working closely with authorities and partner companies to bring about a solution,”  and “paying the costs of remediation,” you are neither accepting fault or pointing fingers.  But, importantly, you are working on repairing the trust of the public, lawmakers, and your regulators.

In particular, if your company is involved in a crisis in which people are injured, it is imperative to express some regret about the events that occurred.  And, it is possible to craft an apology that does not expose you to additional liability.  It’s not easy, but it’s possible.  (For more on apologies, see our post, The Art of the Apology).

• Email This
• Print
• Share Link

When the news broke on April 4, 2010, that the Eagles traded quarterback Donovan McNabb to the Redskins for a second-round draft pick, many D.C. football fans let out a collective groan that could be heard from Loudoun to Landover. The general sentiment among many fans and local sports media has been, “Here we go again.” Dan Snyder, in particular, has been roundly criticized by fans and the media over several years for making splashy off-season deals that fans (including me and my poor superfan of a husband) say cost too much money, give up critical draft picks and usually result in a huge flop, often because these overpriced players are past their prime (e.g., Albert Haynesworth, Jason Taylor and Adam Archuleta). I think it is safe to encapsulate the perception of many Redskins fans on the night of April 4 as follows: “The McNabb trade is another heavy-handed and misguided decision by Dan Snyder; we are acquiring expensive veterans in the wrong areas (Larry Johnson, Willie Parker, Donovan McNabb) when we should be rebuilding our offensive line and attracting young talent. The 2010 season is already looking like a bust.”

Corporations and high-profile individuals often face the same perception disease currently ailing Dan Snyder and Redskins management. There comes a time that public perceptions become so deeply entrenched that even when the facts on the ground are good—even GREAT—it appears almost impossible to close the gap between perception and reality. It doesn’t have to be this way.

Let’s examine the facts of the McNabb deal. First, the Redskins haven’t had a quarterback as accomplished as McNabb, a six-time pro bowler, since the days of Joe Theismann, Doug Williams and Sonny Jurgensen. Second, McNabb has been playing in the NFC East and in a West Coast offense for the entirety of his 11-year career. Third, I am not going to argue that McNabb is the next John Elway—not even close—but there is a real chance that the Mike Shanahan / Donovan McNabb pairing could create something successful, even something special. Fourth, the McNabb deal does not completely foreclose the opportunity for the Redskins to make some much-needed changes to their offensive line. Finally, it is possible, even probable, that the decision-making process in Ashburn has changed. It is at least as likely as not that this was as much a Mike Shanahan / Bruce Allen decision as it was a Dan Snyder decision. Why wouldn’t a veteran coach want a shot at a veteran quarterback?

So, what do the ‘Skins, and especially Mr. Snyder, have to do to close the gap? Execute. Disprove. Earn trust. Once your personal or corporate reputation has become negative and intractable, no amount of talking, explaining, promising, marketing or manipulating the media will bridge the gap. The only way to change perception is to focus on your product. Get honest. Set realistic, achievable expectations and create real “wins” backed up by great facts. While a Super Bowl win is what D.C. fans are after, the Redskins don’t need to accomplish that to turn around public opinion—and neither does a maligned company.

Simply, the Redskins need to meet their fans’ basic expectations, which they have been failing to do over the past several seasons. They must win games that are winnable; they must not give up big leads and lose games to teams that they can beat. They must make changes to their offensive line so that their quarterback does not get beat up in every game. Drafting a left tackle, as the rumors say they will do, is a good way to meet this expectation. They must show a healthy balance between their ability to run the ball and pass the ball. They must have a better record than they did last year, which was 4 and 12 (which shouldn’t be difficult to accomplish). Even if they matched their 2008 record (8 and 8), fans will be delighted, so long as they win the games that they can and should win.

The same principles apply to any organization minding the gap. Ford Motor Company, for example, has executed a spectacular turnaround by going back to basics. Rather than laying out a glitzy plan and pumping expectations with hype and marketing buzz, Ford set realistic expectations and exceeded them. In 2006, many believed that Ford might not survive as it shut down operations across the U.S. and began restructuring. Since that time, it overhauled operations, paid off debt, and made its products competitive and relevant by focusing on fuel-efficiency, safety, and technology. By January 2009, Ford was the only U.S. car maker to refuse bailout money. Today, Ford’s decisions have been handsomely rewarded with greater market share and awards for its vehicles. These “wins,” and the drum-beating publicizing the wins, have caught the attention of customers who once looked exclusively to Japanese automakers to purchase a hybrid car. Quite a turnaround.

On the flip side, good reputations can become as deeply entrenched as bad ones ( e.g., Joe Gibbs). But that’s another post for another day. For now, we will watch, wait and mind the gap for the Redskins. We’ll check back in midseason to see how it all plays out.

• Email This
• Print
• Share Link

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. 

• Email This
• Print
• Share Link

Lawyers can get better access to all the facts and documentary evidence than non-lawyers because they enjoy the protection of the attorney-client privilege—i.e., they cannot be compelled to testify concerning their legal advice to their clients, or the knowledge they obtain in the course of being able to provide such advice, or the documents they review in determining those facts. 

By contrast, non-lawyer advisors, even those public relations firms retained by law firms to assist in litigation, do not share this protection: their documents may be subject to a “qualified” privilege, but there may be occasions when, notwithstanding that privilege, they will be forced to disclose to the opposition their written advice and strategic documents provided to lawyers that have hired them. And in any event, they will almost never be given the protection of the attorney-client privilege to avoid testifying to conversations to which they have been privy because, as non-lawyers, they cannot claim to be rendering legal advice. Indeed, if they are present while lawyers are providing such advice to clients, they may actually create a waiver of the privilege, leading to the horrifying possibility that even the lawyers and clients may be forced to testify as to what was discussed. 

Thus, lawyers need to learn how to talk to the media directly. They have access to the facts and for that reason are more credible in the eyes of many reporters. They also know the legal issues and risks involved in the litigation and won’t be as likely to make an error that could lead to a damaging public comment that prejudices the case. And most importantly, they can work with the client and other lawyers to develop a believable message, based on the facts, that can drive and command the message in the media, correct factual distortions pushed out by the other side and avoid poisoning of the jury pool.

But in order to be most effective, lawyers enjoying the benefit of the privilege must learn the basic ground rules for talking to the press. This will be a first in a series of blog posts explaining both the ground rules as well as the special vocabulary and techniques for being most effective in talking to reporters.

For now, let’s start with four voices that can be chosen and, once chosen, must be agreed to ahead of time by a reporter and/or his or her editor.

First, “on the record” means speaking with attribution, a name and identification as the lawyer in the case.

Second, “on background” must be defined ahead of time, since many people, reporters and non-reporters alike, mean different things by this expression. The best definition should be “on background—by this I mean you can use my quotation, but identify me only as a ‘spokesperson’ or ‘lawyer for’ and don’t mention my name.”

This is often confused with the third expression, “deep background,” which is why both the second and third must be defined and agreed upon by the lawyer and the reporter before proceeding. “Deep background” means “you can use my facts as long as you do not attribute them to me, or if you have to use any attribution, then you can use something anonymous like a ‘knowledgeable source’ or ‘source familiar with the situation.’ Or you can use the fact without any attribution at all and confirm the fact with others.”

Finally, there is “off the record.” Many people use that expression to mean “on background” or “on deep background.” It is highly recommended that “off the record” be followed by this statement: “You must agree that you cannot use what I say at all unless I change the ground rules and allow you to. You cannot mention the substance of what I say to anyone or that I am saying it. I am telling you this only for your own understanding and for no other purpose.”

In other words, don’t use “off the record” if you can avoid it. And if you must, use it only to explain a complicated problem that you don’t want to see in print at that moment in time. 

On the other hand, we advise that even if you decide to use “off the record” and fully trust the reporter or editor who agrees to that ground rule, always be careful since many reporters, even in good faith, might unconsciously repeat the information and not even realize they are violating the ground rule. Thus, we always assume that even an “off the record” comment might be repeated or used, so we never use this expression to communicate something that is not a fact that can be documented and proven. 

In subsequent postings, we will offer examples of the use—and misuse—of these different voices, as well as vocabulary that should be used and communication techniques that work best with reporters.

• Email This
• Print
• Share Link

We’ve heard a lot about recalls in recent weeks. The most famous recall of all happened 27 years ago. In September 1982, seven people died from taking cyanide-laced Extra-Strength Tylenol, Johnson and Johnson’s best-selling product. J&J didn’t dither and immediately recalled 31 million bottles from store shelves, offering replacement products in a safer tablet form, free of charge. Two months later, the company reinstated the product with tamper-proof packaging, and a year later, it had 30 percent of the $1.2 billion analgesic market, down only 7 percent from its share before the poisoning—that market had represented 17 percent of the company’s income in 1981. (For more information, see Judith Rehak’s article “Tylenol made a hero out of Johnson and Johnson: The recall that started them all,” published in the New York Times on March 23, 2002.) And while the stock stumbled, only two months after the recall it recovered its 52-week high. 

It was unprecedented. A voluntary recall? J&J was feted in the press as a hero and as “Exhibit A” on doing it right in every crisis management, product liability and PR class anyone has taken since.  

It wasn’t the fact of the recall itself, but the timing. J&J acted immediately upon the first reports. And it did something proactive to prevent the same event from occurring again, even though it wasn’t the company’s fault in the first place. 

This follows two major rules of crisis management that are particularly important to mitigate the risk of future lawsuits and damages.

First, telling all the bad news yourself. The drip, drip, drip of bad facts is never good. Getting out all the facts as soon as you know them is critical and adds to the company’s trustworthiness. It can also mitigate any future negligent claims because getting out the bad news means you are trying to forewarn people of the risks.

Second, creating good facts can counteract the bad. In the Tylenol case, the company quickly created “tamper-proof” packaging to prevent such incidents in the future. The fact that the company cared so much about product safety that it went the extra mile to create new safeguards also had a “halo” effect. Customers perceived this fact to mean that if the company was this serious about safety in this area, then it must have strict controls in others.

• Email This
• Print
• Share Link

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.

• Email This
• Print
• Share Link