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These are not good times to be a corporation in legal trouble. According to a recent poll conducted by DecisionQuest, 76 percent of those surveyed are angry with corporate America, 85 percent believe corporations lie about the dangers of their products, and 71 percent believe executives lie on the stand. So, in this post-Enron, post-WorldCom era of presumed guilt — not to mention Sarbanes Oxley — what you say about what your company did, and how you communicate it, can make the difference in surviving a legal crisis. No spin will reverse wrongdoing and, in many cases, remaining silent can prove fatal — competitors pounce, customers wander, employees lose faith, investors dump stock, and a business loses traction, consumed by “the scandal.” But somewhere between spin doctoring and pleading the Fifth lies the benefits of a solid communications strategy, driven by honest, consistent messaging to critical stakeholder audiences. So what do you do after you have hired outside counsel? Hire a communications specialist to partner with you in creating a communications strategy that is closely linked and coordinated with your legal strategy. In relying upon the expertise of a qualified outside specialist, not only will you have the benefit of a team highly skilled in managing the public environment surrounding legal actions, but also you will enable your corporate communications or public relations department to continue to concentrate on the day-to-day business and not be distracted or consumed by the legal morass that could stretch on for months, if not years. It is common practice for litigation communications specialists to be retained by outside counsel or the office of the general counsel to at least raise the possibility of protecting internal strategizing from discovery. Nevertheless, the first principle of litigation communications is “do no harm,” especially on the defense side. You do not want to create, inflame, or sustain the story — nor do you want to create unnecessary or inflammatory documents that can be used to distort the story against you. Therefore, it is critical to ensure, right from the opening bell, that your communicators work with you to understand the parameters of your legal problem and develop a communications strategy that is closely aligned and coordinated with your legal strategy. You will have to pick carefully when you choose to speak, who speaks, how they speak, what is said, and when to be silent because every time you communicate in a legal crisis, it carries a risk. These decisions should not be left to lawyers alone. While outside counsel can help protect you legally, there are other tangibles that must be protected: corporate and brand reputation. The decision to speak, or not, often creates tensions between the legal teams, public relations, and marketing departments. This strain is to be expected and not shied away from. The key is forging a policy consensus on a solution that’s not overly weighted toward winning a case. The old cliché is true: You don’t want to win the battle (read: legal case) and lose the war (read: company). HOW WILL IT PLAY? What can you expect from a communications plan in a litigation setting? First, an honest assessment of the case from a communications point of view. The lawyers will tell you about the laws and regulations. A communications expert should be able to tell you how the case will play in the world in which you do business. The second and, probably, most important element of the plan is what the company will say when it communicates. These messages will tell your company’s story. They must be clear, consistent, true, and completely vetted by counsel. In most cases, messages are fine-tuned through polling or focus groups — not to change the reality of the message, but to see what words, phrases, thoughts, and even what policies are acceptable to your audiences. On occasion, research has shown that a policy was so negatively received that executives actually changed it. If used effectively, communications can indeed play a role in shaping policy. And lastly, a communications plan should serve to identify critical audiences, contemplate potential allies, examine possible outcomes to various scenarios, and present executives with a clear understanding of the path ahead. In the end though, a plan is just a plan. And when a major story breaks about litigation, the analogy to war is apt: Every war plan changes when the first shot is fired. THE WORLDCOM STRATEGY In June of 2002, WorldCom retained APCO within hours of the report to the board of directors disclosing the pending massive restatement of previous years’ earnings. Plans were rapidly made for public disclosure, timed to the minute with WorldCom’s disclosure to the government and bankers, and spokesmen were selected: Brad Burns, the corporate head of communications, who had excellent connections to reporters covering the company, and John Sidgemore, the interim CEO. The government was informed just as Wall Street closed. Within minutes, Sidgemore informed the bankers of the situation. And, also within minutes, CNBC broke the story with a reporter from the floor of the New York Stock Exchange reading from a leaked document, speeding up our plan considerably. We quickly issued the previously prepared statements and began a series of phone interviews with key influential journalists. When you are in the middle of a massive breaking legal business story, you must quickly prioritize the flood of incoming calls from the media. Usually at the top of the list are The Wall Street Journal, The New York Times, Associated Press, Reuters, Bloomberg, and CNBC. Reporters at those outlets will be moving quickly and must understand the themes and context of your side of the story. In a story like WorldCom, we were unable, for obvious disclosure reasons, to brief reporters beforehand. But Brad Burns’ pre-existing relationships with reporters at least allowed us to quickly and continually interact with them, to explain what was happening and where we were headed. DEBIT CARD SETTLEMENT In the recent $3 billion antitrust settlement by Visa and MasterCard on debit cards — in which APCO represented Constantine & Partners, lead counsel for the victorious merchants — we were able to establish relationships with reporters well before the trial was scheduled to begin. Many reporters, in fact, were very familiar with the themes of our long-running case. As the trial date approached and settlements were reached at the very last moment, we were able to talk steadily with reporters about the ongoing negotiations. So, when the agreements were reached, most of the reporters were able to quickly understand the importance of the settlement details beyond the simple number: $3 billion. We were able to control the dissemination of the story because we centralized all of the communications from the merchants. The major retailers, from Sears to Wal-Mart and The Limited, referred all questions about the litigation to the Constantine law firm. We answered all media calls, from reporters who had followed the story for some time, as well as reporters who needed quick explanations about the complex intricacies of the debit card market. From previously prepared background documents on the case to an on-the-record press conference by Constantine the morning after the Visa settlement was reached, we were able to offer coordinated, coherent, and clearly understood messaging that explained to the media and our other key audiences the importance of the case developments from the merchants’ point of view. Prior to public disclosure, all information was tightly held, as required by the judge’s confidentiality order. Our communications team, however, was acutely aware of what was going on in the negotiations. While this arrangement required a great deal of trust on the part of the legal team, it is key to success once the dam breaks. There is a delicate balance to preparing reporters to run with what’s coming while at the same time not tipping them off to details that must remain private. And if reporters sense that the communications team is privy to the legal developments, they are more apt to trust the information that you eventually disclose. In the end, a legal challenge to your company is about more than just the law. A judgment will be made by your critical audiences: How trustworthy is the company? That outcome will determine the success of a company long after the legal issues are resolved. Kent Jarrell is director of APCO Worldwide’s litigation communications practice and a former national television correspondent. APCO is a global communications consultancy with a specialty in managing the public environment surrounding legal actions, from pre- to post-trial. He can be reached at [email protected].

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