Karen Handel made news this week when she stepped down from her post as senior vice president at the embattled Susan G. Komen for the Cure foundation, but her job doesn’t appear to be the only vacancy at the nonprofit dedicated to fighting breast cancer. Also open is a spot for a general counsel at the organization, which has endured a firestorm of criticism following a quickly reversed decision to withdraw nearly $700,000 worth of funding to Planned Parenthood centers.
Though the foundation decided to restore the funding, the fallout of sustained negative publicity begs the question: what do organizations gain from the presence of a general counsel before, during, and after a major crisis event like this one?
Says James Moorhead, co-chair of the crisis management practice at Steptoe & Johnson in Washington, D.C.: “I see this as having been a classic exercise in reputation risk management, and a good general counsel will help a nonprofit protect its reputation, keep it focused on its mission, and drive it toward solid decisions that uphold its reputation and its mission.”
Moorhead, a former chief financial officer and in-house counsel himself, says that GCs play one of the key roles in good corporate governance by driving a decision-making process that’s “disciplined and thorough and thoughtful.”
PR specialist David Margulies believes the Komen Foundation was lacking someone to play “devil’s advocate”—a person who can consider both the legal and public relations implications of an institutional decision, and give bluntly honest advice. Often, the devil’s advocate shoes are filled by in-house counsel, says Margulies, founder of the Margulies Communications Group in Dallas and author of Save Your Company, Save Your Job: Crisis Management in the Internet Age.
“You want the position of corporate counsel to be somebody who can tell you the truth,” says Margulies. “You never want somebody’s job to be in jeopardy if they tell you something you don’t want to hear.”
In the case of a fundraising nonprofit like Komen, potential contributors are counting on those kinds of conversations taking place behind the scenes, so that they can be confident the organization is using their money well, says Moorhead: “A nonprofit is essentially engaged, in a way, in a bargain with those who fund it—there’s a shared understanding of what the nonprofit is seeking to accomplish, how it’s undertaking to define and support that mission, and how it will use the funds given to it to advance that cause.”
In terms of crisis prevention and preparation, what a GC does, says Moorhead, is “ensure that the decision-making process upholds what the board and senior management want to achieve in carrying out the nonprofit’s mission.”
In-house attorneys are also becoming increasingly sensitive to an organization’s public relations needs, says Margulies, which can make a difference both in the decision-making process and counsel’s own legal strategy. “I have lots of attorneys who say: ‘Yes, we can do this legally, but it’s going to create a PR problem, so let’s take a different approach.’ ”
And if a crisis does break out, Moorhead says the general counsel is perfectly positioned to coordinate a response: at the intersection of the board, senior management, and the communications team. “The general counsel can help ensure that the nonprofit speaks with one voice, that it provides timely and accurate information, and that its messages support the company’s mission and help protect its reputation,” he says.
In the aftermath, the general counsel is important, too, says Moorhead. Both by spotting emerging issues that could turn into the next crisis, and by reviewing the policies and procedures involved in an organization’s crisis response, the general counsel helps guide the process of “reputation restoration,” he says.
See also: “Penn State General Counsel Steps Down, Leaving Scandal Behind,” CorpCounsel, January 2012.
