CRISIS CLU BI NSIGHT

CRISIS PROOF: WHEN LAWYERS AND COMMUNICATIONSPROFESSIONALS PRESENT A UNITED FRONT

Conventional wisdom has it that when a crisis erupts, lawyers and communicators find themselves at loggerheads.Lawyers want to muzzle the organisation in order to minimise any admission of liability, while communicatorswant to quickly establish the business as the single authoritative source of information relating to thecrisis and issue regular updates to the outside world.

The debate at the Crisis Club reflected the sense of frustration and “hands tied” syndrome that communicatorscan experience in the heat of a crisis, particularly when there are significant legal and compliance issues involved.

However, the reality is that lawyers and communicators are often in agreement about the two cardinal sins ofcrisis communications: admitting liability and speculating as to the cause of a crisis. This commonality providesfertile ground for lawyers and communicators to collaborate when managing a crisis and decreases the chanceof negative reputational damage.

In a crisis, it is easier for the CEO to defer to legal counsel because lawyers can quantify the cost of the problem.Litigation, compensation claims, ex-gratia payments, fines from regulators, insurance claims ... each has precedentand can be totted up to a hefty sum that puts the fear of God (or fear of shareholder wrath) into the businessleader. Difficult then for the crisis communications team to match this by quantifying the equivalent ‘cost’to intangible assets of reputation and brand – even though business leaders are regularly quoted as saying thatreputation is the company’s most precious asset.

A recent study found that the reputations of the top 10 companies (of the FTSE 350) contribute an average of48% to shareholder value.

SO, HOW CAN COMMUNICATION PROFESSIONALS AND LAWYERS WORK TOGETHER WHEN A CRISIS HITS?Preparation is key.Work together in ‘peace time’ to understand perspectives and put in place solutions that canexpedite response time, rather than trying to work things through in the heat of a crisis. Two very practical waysto achieve this are by encouraging lawyers to play an active and integral role in crisis training – crisis mediatraining and simulation exercises being two examples. Equally important is putting in place pre-approvedstatements for the most likely scenarios so that communicators can get initial statements issued promptly.

When a crisis hits. In their efforts to understand, rationalise and quantify the impact of a crisis, organisationscan wholly underestimate the nature of public response and the subsequent political response. This is wherecommunicators come into their own: combating bunker mentality by bringing a degree of realism into the warroom in terms of how the crisis will play out in the outside world, and anticipating the level of moral outrage forwhat has happened. Communicators will need to have compelling arguments in terms of the level of impact onreputation – which may be facilitated by instant polling on trust metrics – to combat the highly quantifiablefinancial and legal arguments. A serious challenge to communicators, and core members of the crisis management

Jeremy GalbraithCEO, Burson-Marsteller Europe,Middle-East & AfricaT. + 32 2 743 66 11jeremy.galbraith@bm.com

Burson-Marsteller EMEA37 Square de MeeûsB-1000 BrusselsT. + 32 2 743 66 11www.burson-marsteller.eu

team, is balancing the short term-ist approach centred on share price and CEO tenure versus long termreputational benefits of ‘doing the right thing’ at all cost. Scenario planning is another vital tool in helping thecrisis management team think longer term.

All written information is discoverable so communicators need to work closely with legal counsel to understandthe impact of disclosure and how best to protect the confidentiality of information. Press releases and all othercommunication collateral must be factual and legally approved before being issued so as not to leave thecompany unnecessarily exposed, but this still provides opportunity for the company to express not only the factsbut also how it feels about what has happened. The expression of empathy helps connect the company withexternal stakeholders who will be emotionally reacting to the crisis.

To the approval of lawyers, crisis communication specialists will always advise clients to steer clear of answeringthe question ‘how could this happen?’ as this will only be known following an investigation into the situation.There are ways to say ‘sorry’ without admitting liability and there are ways to help people financially who arenegatively impacted by a crisis without admitting liability i.e. through the use of ex gratia payments.

As the heat of the crisis dissipates and the organisation moves into reputation recovery communicators and legalcounsel still need to stay close. Legal events create additional milestones that will be picked up on by the mediaand other external stakeholders. For example, the recent attendance of Captain Schettino at the Costa Concordiaenquiry sparked another wave of global media interest in developments.

Our 2011 crisis survey identified that 59% of business leaders have experienced a crisis in their current or previouscompany and that 79% believe they are only 12 months from a potential crisis. Overlay the common desire ofboth communicators and lawyers to avoid admission of liability and speculation as to the cause of the crisisbefore this has fully been resolved and you are left with a strong case to bring communicators and lawyers togethernow, in peace time, to gear up and ensure your organisation is well placed to handle whatever crisis that hits.

The Burson-Marsteller Crisis Club is an exclusive network of crisis communication professionals that comestogether on an annual basis to get new insights into global crisis trends and share best practice and views withother senior professionals in the industry. This year the Crisis Club was held in Munich and its emphasis was on thelegal issues to be considered when communicating during a crisis – particularly how to effectively integrate legaland communications expertise to best protect the reputation of an organisation facing a crisis. The Crisis Club isheld under the Chatham House Rule. Join us on LinkedIn.