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March 28, 2017 at 12:52 AM
What do you do when you are served with a high-profile, “bet-the-company” lawsuit? When you find yourself in the middle of a hostile takeover bid or a proxy fight? When you are the subject of a whistleblower’s surprise allegation or a government investigation? How do you respond?
A crisis can take many forms, and its timing may come as a surprise. Last year, businesses, organizations and individuals faced an array of crises, including Yahoo!’s data breach, Wells Fargo employees’ unauthorized account creation, Mylan’s EpiPen price hike, Ryan Lochte’s fallout during the Rio Olympics and Tesco’s accounting scandal. These crises should remind all corporate executives and other professionals that no one and no organization is immune from a crisis.
Unless a crisis is handled efficiently, effectively and with due deliberation, a disruption can significantly impact business, affect revenue and damage reputations. Whether you are dealing with an isolated incident or a large-scale crisis, you should have a crisis management plan. Below are three tips for successfully weathering a crisis.
1. Gather the facts. Information is primary.
In a crisis situation, you should first gather as much information as possible and find out all the facts—the good and the bad—in order to assess the situation and determine how best to respond. This may seem obvious, but this essential first step is often overlooked or minimized when corporations or individuals feel the pressure to rush to respond to a crisis. Resist this temptation.
Although you may know your business or be familiar with the general crisis management landscape, you may not fully understand what happened in this specific incident. Do the research. Gather as much information as you can. Once you know what you know—and what you do not know – assimilate this information.
As part of the investigative and fact-finding process, it is important to be proactive and identify your potential legal and reputational exposure as early as possible. Many crises begin as legal issues or lead to legal issues, and retaining legal counsel early in the process can help you identify your legal exposure and prevent missteps that may have legal consequences. Particularly in rapidly evolving situations, it is helpful to retain counsel early in the process to ensure that you will have a fully informed legal counsel to develop your legal strategy.
One of the most important benefits of involving legal counsel in the investigation and fact-finding aspects of crisis management is the attorney-client privilege. This privilege applies to communications between an attorney and client made for the purpose of securing legal advice, and is often invoked to protect such communications from discovery. Involving counsel early in the crisis will make it more likely that your fact-finding and analysis will be covered by privilege and protected from disclosure to third parties in the future.
Although the attorney-client privilege is a valuable asset during the fact-finding process, it applies only in limited circumstances and can be easily waived. For example, copying counsel on correspondence may not be enough to invoke the privilege, and if a document that is otherwise privileged is shared with a third party, then the privilege may be waived.
2. Assemble a crisis team.
Once the facts are determined, the next step is to assemble a crisis management team. Crises may involve legal components, personnel components, financial components, and publicity components, all of which require an effective crisis management team. Assembling an effective team is one of the most important aspects of crisis management strategy.
