Keep Privilege in Mind While Drafting Crisis Management Plan, Panelists Say

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By Che Odom  

April 25 --Whether the crisis is a scandal involving a top executive or a product recall, companies must carefully consider the role public relations will play in mitigating the damage.

Company reputation will be on the line, along with attorney-client and work-product privileges.

That's according to George Stamboulidis, a partner at BakerHostetler LLP, who spoke April 25 in Washington at the American Bar Association's Sixth Annual National Institute on Internal Corporate Investigations and Forum for In-House Counsel.

“The best thing a lawyer can do is get everything wrapped up in the bubble of attorney-client privilege or work product before things get waived,” Stamboulidis, who has extensive experience in complex federal jury trials as a prosecutor and defense attorney, said.

That's an effort that will take some thinking, planning and communication among groups within the company, he said.

Stamboulidis participated on a panel discussion on crisis management. Much of the discussion centered on the need to think about various audiences when issuing statements in the swirl of a crisis.

Practice the Crisis Plan

Panelists urged corporate counsel in attendance to make sure their companies have management plans in place, and that they rehearse how they would handle various situations.

In developing a plan, corporate counsel must work with directors, officers and employees to identify where something bad is most likely to happen, Michael E. Clark, special counsel at Duane Morris LLP, said at the conference.

“One of the things that companies have to do is envision what is their risk profile,” he said, adding that this requires thought about who ought to be involved in coming up with a crisis management plan.

The company will need to think about who will communicate with government regulators and investigators, employees, shareholders, lenders, vendors, shareholders, customers and the public. The same person may not be appropriate for all audiences, Henry Klehm III, a partner at the international law firm of Jones Day.

In most situations, the chief executive officer will serve as the company's primary spokesperson, he said. Other times, such as when the scandal involves the CEO, someone else will need to serve as the public face. The independent chairman may be a good spokesperson, he added.

Use Public Relations Experts

Public relations firms can provide valuable advice when developing a plan, Clark said. The company, however, will need to consider whether the public relations firm ought to be used when a crisis actually strikes, he said.

When it comes to protecting privilege, Clark suggested that companies have public relations experts advise corporate counsel, who, in turn, advise the organization.

This may help preserve privilege, Klehm said.

“But you are better off not having the P.R. person in the room when talking strategy, especially when you are rendering a critical legal analysis,” Klehm said. “There is time to brief [the public relations team], time when the lawyer will be sitting with the P.R. person and can say, 'Here is our statement.'”

Klehm, however, does not recommend that a lawyer draft statements intended for the public.

“The natural inclination of lawyers is to want to protect ourselves in everything we say and that is not always possibly given the immediacy of the new media,” he said.

Lawyers too often muddle the message with legalese, which could lead the public to think the company is attempting to hide something, he said

Corporate counsel, however, should review and comment on the public statements to make sure they are accurate and do not go too far, he added.

Still, the issue of whether you can bring a P.R. consultant in as part of the team advising the lawyers to defend the company while preserving privilege is “not a very clear issue,” Clark, a litigator who concentrates on securities and financial fraud, said.

 

To contact the reporter on this story: Che Odom in Washington at codom@bna.com

To contact the editor responsible for this story: Kristyn Hyland at khyland@bna.com