To read the story about crisis management in the courtroom, click here.
When scandal, litigation or criminal charges threaten a business, taking special action is vital. Experts weigh in.
On reacting to a crisis:
Safeguarding the trust of your customer is a core competency for a bank. So it is a core thing for them to be able to develop their value composition and core values or competencies. You cannot be in business if you aren’t able to do that.
What companies need to be doing is number one, distance themselves and clearly separate themselves from the employee that was involved in this type of activity. Number two, there is also a concern from a leadership and process point of view that the bank had the proper processes in place to ensure this type of behavior is inconceivable for its employees and that, if there are issues, they can be easily detected and acted upon by the general managers.
It is important companies realize that when critical issues impair their ability to function as a business, they usually need to go beyond the specific case and demonstrate from a reputational point of view is that their processes and their values are in place.
–Daniel Diermeier, who lectures on crisis management, is the IBM Distinguished Professor of Regulation and Competitive Practice at the Kellogg School of Management.
On bringing in outside help:
I have a crisis management PR guy who I will bring in if it’s a really bad situation. I did a case last year for EZ Lube, the oil change company with a couple hundred stores. They were accused of selling unnecessary services and all kinds of stuff, charging for services they didn’t really perform. It was really life threatening. They were sued by the California attorney general and by the Orange County district attorney. I brought in Mike Sitrick [CEO of PR firm Sitrick and Co.] help. We were just getting pummeled in the press. The lawsuit itself, I could handle. There were some mistakes made, but I wasn’t really that worried about the lawsuit. But in cases of a very high profile company that deals with the public, I often will bring someone in.
–Skip Miller is a partner with litigation firm Miller Barondess.
On juror bias:
Especially where you represent a large institution, I think they get tarred with the same brush where the public sort of decides that whatever the evil or evils of the moment are, there are some big institutional villains that are responsible for them. And I think that is inevitable when you represent any kind of company or institutional defendant, particularly when you have a smaller client, a smaller adversary or an individual as a plaintiff. You have a risk of jury sympathy that is in effect a lawlessness unrelated to the specific merits or legal issues in the case. That is just a fact you have to deal with and one of the first things you need to look at. Be cognizant of the general public perception of your client’s company, in particular the business, environment or market in which your client functions. Those are all factors; those are all pieces of baggage that a juror brings to the jury room with her.
–David Dunn is a litigation partner at Hogan & Hartson.