The past year has been filled with disruption for businesses and their legal advisers. In the midst of a challenging time, crisis management is paramount.
As part of The Lawyer’s GCs Summit, we explored the roles that GCs and their teams have in a crisis. A recent roundtable, hosted by Cooley partners James Maton, Sascha Grimm and special counsel Claire Temple, saw in-house lawyers gather together to share their experiences with crisis management and discuss ways of dealing with an emergent crisis as effectively as possible.
GCs and senior in-house counsel have a unique, and often lonely role in crisis management, sitting at the intersection between the legal, compliance and commercial functions. With this in mind, the first question for the attendees was clear: as senior in-house lawyers and GCs, what concerns you the most about handling a crisis?
Communications and navigating culture clashes within an organisation: blame versus accountability
The importance of maintaining open communication channels and fostering a culture that encourages open and forthright communications was an overarching theme in conversation.
Attendees marked it as a crucial component in allowing them to manage crises effectively in their respective businesses.
James Maton remarked that he was often astonished by the number of people within business units, who did not take advantage of whistleblowing communications available to them, and who had been aware of a crisis brewing.
One of the main culprits is a lack of integration in a business, leading to employees feeling as though a particular business unit is an island. Maton says “that has been a constant theme in some of the investigations I have been involved in.” This sort of disconnect can actually lead to crises.
Sascha Grimm pointed out the importance of rooting the response in the organisation’s unique culture: “Sometimes it will be the cause of the crisis, and often it will also be the way out of a crisis.”
The attendees agreed that managing culture changes was key. A lot of people are too afraid to come to their GCs and legal departments in a crisis and therefore implementing successful cultural change programs can be hugely helpful in shifting an organisation’s culture away from blame.
One attendee noted that lawyer involvement can have a freezing effect on the people who are affected, leading to delays in communications and losing time that could have been spent resolving the issue in allocating blame. All this can hinder an organisation’s ability to effectively manage a crisis.
The conversation turned towards solutions to the problem. Inclusion, diversity of thought and communication were all common themes in this discussion. Letting people in and including them in working group discussions throughout a crisis was one of the strategies which attendees found effective.
One attendee suggested borrowing from other branches of a business: holding mid-mortems or post-mortems at regular intervals to examine lessons to be learnt and to emphasise the importance of problem solving over blame.
Having a project team that is represented by different departments and different units each taking ownership of the situation and working together to resolve it was also thought to be effective.
Sascha Grimm notes :“It’s often said that compliance is about communication and people”. A move away from allocating blame in a crisis and focusing instead on fixing the problem would encourage more forthright communication between employees and their GCs. As one attendee pointed out, once you discover a mistake, you are halfway to fixing it.
Getting the c-suite on board
Making sure that other stakeholders are both aware of a possible crisis and ensuring they understand the significance of an issue or problem was the next issue that attendees highlighted in the conversation.
Speaking from a product recall perspective, Cooley special counsel Claire Temple pointed out the importance of building relationships with the board and making allies before a crisis emerges. She notes that in most cases pre-planning will get stakeholders’ attention.
She encourages GCs to be proactive at this stage: “you will start to get a sense of what matters to them. What are their triggers?”
Understanding different players and their triggers means that GCs can align before they need to go to the board collectively, using targeted strategies to ensure that the different players take the situation seriously and are aware of crisis plans and the steps that need to be taken in order to mitigate risks to reputation and the bottom line.
Another attendee also points out the importance of offering themselves up as allies to business units. Being a bridge between the people who are most likely to first notice an issue and the c-suite is equally important.
Making allies outside the business is also a key piece of advice. One attendee highlights the importance of building relationships with other GCs who can share their experiences in similar crises. A good external ally can be crucial in the first 24 hours of a crisis.
Staying on-message and navigating between PR and regulators
The relationship between GCs and PR specialists is one that requires an incredible amount of diplomacy. In a crisis, collaboration between the two is paramount.
Maton says situations where there is a risk of criminal liability and a need to make statements to external actors, be they consumers, regulators or stakeholders, the relationship between legal and PR is key.
When dealing with crises in real-time, one attendee highlighted the importance of contingencies and flexible planning: having various iterations of press releases keyed to different eventualities can help all parties feel in control and help keep a balance between the legal and PR functions in an organisation.
This kind of collaboration between functions and enlisting the help of crisis PR can also be key in crisis management. One attendee noted that having lots of different inputs from PR can also help an organisation keep control of the narrative and minimise the reputational risks posed in a crisis.
Sascha Grimm also noted that internal communications are also crucial in minimising risk and preserving an organisations’ relationship with their customers and stakeholders. She adds that this further highlights the importance of diversity of thought in crisis management teams.
Finally, a rule of thumb in crisis management is passed down anecdotally by an attendee towards the end of the conversation: “No knee-jerk reactions!”