Nine top law firms, including one US practice, have been placed on a panel to provide emergency advice to companies faced with embarrassing scandals which could hit their share price.
Insurer AIG (Europe) has developed a new “crisis containment” policy which gives companies 30 days free legal, PR and other advice in the event of a crisis such as revelations of fraud by a director.
The company chooses which law firm of the nine – Allen & Overy, Clifford Chance, Dundas & Wilson, Freshfields, Herbert Smith, Lovell White Durrant, Norton Rose, Shearman & Sterling and Slaughter and May – it requires.
In addition, the firms have agreed to make themselves available to give board presentations free of charge on corporate governance or directors liability issues to companies which fear they may be about to hit by a crisis which has not yet become public.
Alexander Baugh, AIG's product manager, said that if the firms get instructed as a result of these presentations, fees will be paid directly to them.
There is also a 24-hour hotline for companies. This connects them with a member of the panel and can be used when they suspect they might be about to hit by a crisis.
Baugh said: “We are trying to encourage companies to take advice before a crisis hits the headlines. That way the costs to them, and the insurers, are reduced.”
Neil Cochran, chairman of Dundas & Wilson, said: “This is a good thing for our firm to get involved with because it is just the sort of work we have expertise in.”