Q&A: Navigating Through a Crisis

Mahrukh: One example that I can share from McDonald’s is that we try to amplify stories of our franchisees and their teams giving back to the community by sharing the stories on social media. For example, when there are natural disasters such as a hurricane, it’s not uncommon for our franchisees and company-operated stores to feed first responders. We share these stories on our company social media platforms to help create good will between the brand and the communities we serve.

Shawn: Feel good stories are always a good way to bank good will. If your organization is doing great things in the community, then you need to talk about that. You want people to have a perception in their mind that, "hey, I know that company, they do this great thing in the community.” Anything that shows your invested and giving back to the community as a good corporate citizen, you should put that out there.   

I wonder if our panelists have comments about what happens when proactive measures, trust-building with customers, and “good deeds” get perceived as “reputation washing” due to business relationships with 3Ps/vendors/etc. whose mission, conduct, products are antithetical to the image the primary company hopes to project? 

Judy: In order for corporate or social responsibility efforts to be effective, they have to be initiatives that you undertake, donate to, or otherwise endorse before you have a reputation issue or a crisis, otherwise, the action is too transparent and won’t pass the “sniff test.” Given the fact that consumers, employees, and other key stakeholders care more today about what corporations and organizations stand for, we’ve had a lot of conversations with our clients and their leadership about what will be most effective for them. You have to take a hard look at what you do, who you serve, and how your business or product affects the public to determine the best strategy for corporate responsibility and community engagement. If you do it right, meaningful programs in these areas will help when you hit the inevitable issue or crisis. Also, checkbook activism is no longer enough — most employees, customers, and clients want to see genuine commitment and engagement to the issues the company stands for and supports.

I also think that it’s critical for companies to anticipate these kinds of attacks or questions and think through how they may respond. It doesn’t mean you avoid doing the good deeds because of the fear of bad PR. It just means that you have to be prepared and able to address these questions in a thoughtful, non-defensive manner. It’s important to show that you get it and understand why some might be suspicious.

Mahrukh: Pro-active measures and trust building with customers and communities should, first and foremost, be genuine and be about doing the right thing.That will go a long way in preventing these actions from being perceived of as “reputation washing” or otherwise disingenuous. Likewise, a company should always consider the mission and conduct of its third parties/vendors and elect not to do business with those parties whose values conflict with its own. As an example, this summer, McDonald’s terminated its sponsorship of Nascar driver, Kyle Larson, after his use of a racial slur. All this being said, there will always be some detractors and critics, despite a company’s best efforts, but a company should try to avoid these detractors and critics from getting in the way of continuing good work.  

Shawn: I would answer this question with a question: Why is it that we’re doing business with third-parties or vendors who are not aligned with our mission and vision? Choose business partners who are more aligned with your company’s morals, values, and ethics. I do internal investigation and a lot of foreign corrupt practices act work, and I counsel my clients to do their due diligence on third-party partners. This helps protect your brand and limits risks.    

How do companies leverage the “good” or the benefits they provide to employees? How do they activate or draw upon that good will during actual times of crisis, and should leadership ask employees to be “brand ambassadors” so to speak? 

Judy: Being a good employer, but also making sure that you are communicating it to employees, is critical. You want to constantly communicate to the employees the good things that the company is doing, as well as the good and positive things that employees have accomplished, especially as it relates to shared company goals, values, and objectives. That makes employees feel a part of the company as well as its success. The more that you can do that, the better. Then, what you’ll find is that these employees organically become ambassadors for the company. 

Mahrukh: I may have mentioned this during the panel, but open communication and transparency with employees during crises can be incredibly helpful in making them feel valued and good about the place they work, and being natural brand ambassadors as a result. A company can also think about how to utilize certain members of its employee base to serve as a brand ambassador with specific stakeholders — these employees may be in more senior positions and have existing relationships with stakeholders or otherwise have credibility with the stakeholders. 

In an ideal world, counsel will hire the outside consultant to preserve privilege. But what about instances where perhaps leadership outside of the legal department must hire a consultant/crisis professional quickly; before they lawyers are involved. What steps at that point should be taken to preserve privilege?  

Shawn: If your CEO is hiring your consultant, you don’t have privilege. The CEO is not your general counsel; there is no lawyer in place to say that this relationship is for the purpose of providing legal advice. You can always hire someone and say that you want to keep it confidential, but if it turns into litigation you cannot go back and try to preserve the privilege piece. There’s just no way to do that, that’s why it’s called attorney-client privilege; there must be an attorney somewhere in the loop. If something is considered a crisis, there usually will not only be reputational or brand damage, but there’s also the possibility of litigation or legal action that flows from whatever made it a crisis. For example, if there’s an oil spill, you bring in your GC because there’s the potential for personal injury or environmental harm that could rise to litigation. So, in that crisis, you identified where the legal risks are and you need to bring in your GC. 

On building relationships: In addition to looking for someone “who’s been through the fire,” what advice can the panel offer on weeding through many qualified outside counsel or crisis professionals who have comparable experience? What are some other factors to look out for?

On the flip side, what can outside experts or counsel do to adequately inform companies of their expertise and qualifications?  

Judy: There is certainly experience in credentials, but what really counts is how well you connect with the potential hire. Are you aligned on different issues and how to handle things? Do you get a sense that you can trust them and build a thoughtful relationship? That said, it’s also important to build a relationship where you can rely on the hire to give you straightforward, honest advice. You don’t want someone who won’t speak their mind.   

Shawn: Share experiences. As lawyers, we can all have in our bios that we help clients with crisis communication. What does that mean? We all do it because managing risks is what we do as attorneys. It really comes down to sharing representative examples of where you use your crisis communication skillsets or helped a client through crisis. Also, approach is important — every lawyer is not for every company.

Different companies have different metrics and you need to find a person who understands your company’s ethics and values, and how much risks they are willing to take on in talking through multiple ways to address the crisis. If you’re very risk-adverse, you don’t want a lawyer or a crisis professional who wants to take it all the way and go to court. Sometimes it’s just personality and working style, and you figure that out by having a conversation. I recommend that you push your outside attorneys and crisis professional for those examples. You’re going to see if they’re the right fit for you by how they describe how they helped other clients manage crisis. 

When looking for diverse outside counsel, for example, how do you begin the hard conversations that can occur when more senior members of the legal team what to continue giving cases/issues to the “tried and true” counsel they’ve always worked with? 

Judy: First, recognize that you understand their reservations and reasons for wanting to go with the known option. However, highlight the unique perspective you, as the crisis professional, or the professional you would like to hire, bring to the table. Explain how that perspective translates into value for the client or organization. 

Mahrukh: Change has to come from the top, so general counsel and other leaders in your legal department need to set the expectation that, whenever possible, lawyers at all levels need to consider a pool of outside counsel that includes a diverse set for new matters. And there should be measures to keep people accountable for this expectation. Of course, there will be some instances where current outside counsel is deeply entrenched in related matters and/or “bet the company” type matters and it simply wouldn’t make strategic sense to bring in someone new, but in many cases, it will be fine and the right expectations and accountability measures need to be put in place to make it happen.  

Shawn: Part of this, is taking the time to get to know someone other than your tried-and-true. It doesn’t mean you lose your tried-and-true, your tried-and-true are always there — until they’re not. And when they’re not, if you haven’t gone out and tried to figure out who else could potentially be your tried-and-true, when you need them, you don’t know them yet. I think about how I approach potential clients and ask them to trust me and give me their work; it starts with building a relationship and explaining what I do, my morals, values and standard — how I treat my clients.

It’s like planting your garden: you put a lot of seeds out there and you water them and make sure they have sunlight — you protect and nurture those seeds. And some of them sprout and some even come to a full bloom. But you must keep working at it, making sure that you are developing those relationships.