Counsel to Counsel - November 2008 - (Page 22) in the spotlight Hot seat: Coordination Critical in Crisis Management By Steven Andersen © Ivan Kmit | Dreamstime.com t oday’s corporate crisis is a battle with many fronts. What begins as a regulatory investigation can quickly spin into customer lawsuits, shareholder class actions, intense media scrutiny and even criminal charges. And the current business landscape presents more potential for crisis than ever before. Regulators and prosecutors—from the Department of Justice, to the Securities and Exchange Commission, to state attorneys general—are more active and activist. The emergence of blogs has accelerated the news cycle and removed traditional filtering mechanisms. Raw information is posted instantly online, whether it proves accurate or not. And regardless of who is elected president this month, pressure on corporations will likely increase in the next administration. Perhaps most troubling is the fact that the fallout from high-profile scandals over the last decade has corporate credibility at a low ebb. “Daimler did a study about how the public would react to a crisis situation with no facts,” says Jim Moorhead, co-chair of the crisis management practice at Steptoe & Johnson LLP. “The question was put to respondents: Is the company guilty or innocent? More than two-thirds presumed the company was guilty, even with no facts. That goes to show that you have to be extremely vigilant, well prepared and ready to fight back.” When a crisis hits, companies must be ready to respond, and the general counsel is integral to planning and executing that response. key Player “The general counsel may or may not be the leader in a crisis, but he or she has to be on the team and be a key player,” Moorhead explains. “There has to be a coordinated legal, business and media strategy. Understanding the facts and the potential legal exposure is critical to that strategy.” That’s easier said than done. It’s not as if general counsel are exactly cheated for work to begin with. “It can be overwhelming for general counsel,” says Shannen W. Coffin, also co-chair of the firm’s crisis practice. “Often in these situations, they’re looking for help so they can do their day-to-day work. Nothing else stands still while the business is under assault.” 22 LexisNexis® Martindale-Hubbell® http://www.Dreamstime.com
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