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The Dreaded Phone Call...

You are the General Counsel of a major corporation about to go to your son’s soccer game. It’s five to five and the phone rings: The New York Times is about to go with a story about your secret merger negotiations, that also involve sensitive talks with the U.S. Federal Trade Commission (FTC). Your stomach clenches. It’s a full blown crisis….and it’s bad…or is it? 

Most people think a crisis is when something bad happens. But by definition it’s when something bad might happen depending on how you handle the moment. 

According to Merriam Webster, the definition of crisis is a “decisive moment,” or an,

"Unstable or crucial time or state of affairs in which a decisive change is impending, especially one with a distinct possibility of a highly undesirable outcome."

So it’s not what is happening but what you do at those decisive moments that determine whether the outcome of this state of affairs will be good or bad and not necessarily the crisis itself. 

And since, by definition, a crisis is a “state of affairs,” it is multidimensional. Most crisis involve the risk of financial damage, legal liability and reputational harm. Because the only way to stabilize a situation is to determine the underlying facts or factors that are causing the “unstable” moment, it is often legal training that best conducts the fact-finding process, under privilege. 

For example:

  • Is there a misperception of the facts that is leading to false accusations?
  • Is that misperception politically motivated or coming from a competitor or someone with competing interests, such as another bidder for the same company? 
  • Was something done that was not legal or not according to policy or best practices? 
  • What can you do in this crucial moment to make the outcome one that enhances your reputation rather than harms it? 

There can be lots of reasons that you or your company are under attack, which is why we believe three disciplines are called for in managing a crisis and ultimately achieving a positive outcome

  1. Legal
  2. Political
  3. Public relations experience

Many times all three disciplines are necessary. We call it fighting by land, sea and air….on all fronts at all times. You can do this quietly or not. In the example above, no comment is not an option. Is there a press strategy that can prevent the reporter from printing now, by offering an exclusive later? Are there facts in support of the merger than can be given without endangering the negotiations with the company and the FTC? 

The solution here will certainly be driven by legal, political and public relations expertise.

Handling that decisive moment strategically can be the difference between having the reputation of a company that has done wrong to a company that cares about doing things right. It’s critical to ensure that policies are in place that are designed to prevent the most likely crisis from occurring and, in turn, will limit legal and reputational risk. The scenario of a possible leak must be planned for, with pre-approved statements available to deal with any eventuality and with a clear strategy for informing key stakeholders of the likely reporting. 

Any company can plan for a crisis. 

These decisive moments or state of affairs are not entirely unpredictable. For example, a global retailer that manufactures some of its own lines can either worry about being accused of unfair labor practices in areas of the world that are difficult to police or partner with a non-profit or advocacy group to work out a solution that involves these same groups advising the company on best practices and conducting “surprise” visits to ensure those policies are being carried out. This again calls for lawyers, business, political and PR experts who can view issues through multiple dimensions

So with the pre-approved messages from your antitrust lawyers, and the communications strategy you worked out with the GR and PR experts at your fingertips and ready to activate once you hang up, you take a deep breath. You can answer the questions, making this decisive moment a winner for the company by using the reporter’s query as an opportunity to get the facts out about just why this match makes sense from a legal, political and consumer viewpoint. And, you can still make the soccer game.

From McDermott Will & Emery’s Legal Crisis Strategies Blog: http://www.legalcrisisstrategies.com/

© 2010 McDermott Will & EmeryNational Law Review, Volume , Number 50
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