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In the age of mass communication and social media how on earth does a company manage external appearances during a crisis.  At the MSBA Legal Summit Series Webinar, a group of experts on managing company crises discussed managing a company’s external appearances.   Marisa Trasatti, Esquire, partner at Wilson, Elser, Moskowitz, Edelman & Dicker, LLP and General Counsel of Sciton, Inc., moderated the panel consisting of lawyers, a CEO, a public relations’ expert and an insurance professional. 

Perception is reality!  In our world of mass communication and social platforms such as Facebook, Twitter and LinkedIn word spreads faster than the speed of light.  If your company’s crisis becomes public, then your crisis management team will need to determine whether your company should respond with a press release.  The experts pointed out that if the crisis does become public, and the source of the disclosure is not your company, then there is a good chance the information spread by the press and social media is inaccurate. “Be proactive and have the first word because no company wants to have the narrative framed by the media,” said Robert E. Scott, Jr., partner at Wilson, Elser, Moskowitz, Edelman & Dicker, LLP.  When Mr. Scott first started practicing law he was always instructed that whenever we as lawyers were asked the question about a case that we were handling it was always “no comment.”  That approach has evaporated.  The external appearance of a crisis is now extremely important.  As lawyers, we now need to be in conjunction with the message that the company wants to have out to the public, he said. Mr. Scott recommends hiring a public relations firm to assist the crisis management team develop a public relations strategy and navigate the public side of the crisis. 

It is important to lock down external communications within your company during a crisis.  Communicate with your employees and instruct them to refrain from taking it upon themselves as individuals to defend any allegations in the media or by social media trolls. Any statements made by employees outside of these instructions may be used against the company in a subsequent lawsuit or enforcement action.  A public relations firm can help create a couple of messages that your employees are allowed to say. Linda Lenrow-Lopez, Director of Operations, Risk Alternatives, L3 Management Innovations, LLC, and a public relations expert, said the best way to approach this risk is to send an email to your employees “stating that you are currently assessing the crisis so we ask that you not speak to the media and if you do have to talk to customers here is the message – kindly don’t vary from this message.”  It’s easier said than done.  Aaron Burton’s own experience managing a company crisis for his company Sciton, Inc., is indicative.  You have to instruct your own people to refrain from putting out messages via social media, he said.  On a day-to-day basis in a normal business environment communication is a good thing, not so when your employees are sending out a myriad of messages that have not been vetted by the crisis management team.  

Privileges

Be careful not to waive any privileges.  The attorney-client privilege is one of the most sacred relationships between attorney and client.  Preserving your privileges during a company crisis can be difficult.  Rule 1.6(c) of the ABA Model Rules of Professional Conduct provides that “a lawyer shall make reasonable efforts to prevent the inadvertent or unauthorized disclosure of, or unauthorized access to, information relating to the representation of a client.”  If your company decides to hire a public relations firm or any other third party to assist in navigating the crisis, you will need to share documents with the outside entity.  These documents are probably sensitive in nature, some may be privileged and contain information that can be used against your company in a lawsuit.  Therefore, it is imperative that you, as counsel to the company, take efforts to prevent the disclosure of any privileged content during the crisis.

The panelists cited two key cases that offer a primer on privilege and waiver that will help guide you, as counsel, with sharing information with third parties without waiving privileges.  The first case was Pearlstein v. Blackberry LTD., No. 13 Civ. 7060 (CM) (S.D. N.Y. Jan. 26, 2021).  In this case, Blackberry directly hired a consultant to advise on market perspective rather than to assist Blackberry’s counsel in achieving a specific legal goal. This led the court to decide the privilege was waived.  In Universal Standard Inc. v. Target Corp., 331 F.R.D. 80 (S.D.N.Y. 2019), Universal Standard, not its attorneys, hired a public relations firm.  The public relations firm’s role was limited to assisting Universal in making publicity-related business decisions.

Ms. Trasatti, partner at Wilson, Elser, Moskowitz, Edelman & Dicker, LLP, and also General Counsel to Sciton, Inc., recommends hiring outside counsel for assistance in managing the crisis in order to preserve your privileges.  If a decision is made to hire a public relations firm, outside counsel can retain the firm instead of your company directly hiring the public relations firm.  In this scenario, sensitive documents, information and conversations are exchanged between your company and the law firm instead of directly between the company and the public relations firm.  Mr. Scott agreed stating, “it’s better if the lawyer gets involved in the retention and communication with a public relations firm in order to hopefully preserve the privileges that attach to the communication.”

Finally, if possible, make sure the initial communication is the message that remains the same throughout the crisis. “The more times you change your external message the less credibility you will have” with the public, your shareholders, your customers and employees, said Scott.  

In sum: The crisis management team will need to decide if public comment should be made regarding the crisis.  Don’t let the media or other third parties control the message if your company crisis becomes public.  Be proactive! Lock down external communications. Consider hiring a public relations firm.  Privilege waiver can expose sensitive documents and information – your efforts to shape media coverage may become public.  If a decision is made to hire a public relations firm, ensure outside counsel hires the firm to preserve privileges. 

You may watch the experts discuss the sixth tip on how to manage a company crisis below:

 

This article is the eighth of a 13-week part series that will discuss in detail how counsel can help their clients create a crisis management strategy and manage a company crisis.  Last week, the MSBA discussed the fifth of ten tips on how to manage a company crisis. Next week, the MSBA will discuss the seventh of ten tips to manage a company crisis with comprehensive suggestions and actions for implementation.  The immediate next three weeks we will address, individually, the other three tips to manage a company crisis.  The final week will include a comprehensive summation of all the myths and tips including the advice and counsel of the professional panelists listed below.  In week one of the series, the MSBA generally discussed the top ten tips on how to manage a company crisis.  Week two was a detailed summary of the 7 myths of a company crisis. Weeks three through seven addressed the first five tips to manage a company crisis.  The MSBA wishes to express sincere gratitude to the professional panelists, without whom it would not be possible to offer this series.

The top ten tips on how to manage a crisis were identified by the panel of crisis experts:

  • Determine What Activities the Crisis Management Plan (Before the Crisis)
  • Formulate the Crisis Management Team
  • Assess the Crisis
  • The Initial Response
  • Insurance
  • Manage the External Appearance:  Public Relations, Media and Customers
  • Manage the Internal Appearance: Advising Employees and Communicating with Key Opinion Leaders
  • Adjust the Company’s Promotional & Sales Practices
  • Response to Regulatory/Law Enforcement
  • Concluding the Plan

Join us in the coming weeks as we continue to cover in detail the 10 Steps in Managing a Crisis.  

Panelists:                                                                      

Aaron C. Burton, CEO of Sciton, Inc. Sciton, Inc. is the largest privately held dermatological and medical device laser manufacturer.  Aaron shared his experience as CEO and especially the crisis that developed at Sciton during his first year. Aaron also generously shared how Sciton handled and endured the COVID crisis.   

Linda Lenrow Lopez, Director of Operations, Risk Alternatives, L3 Management Innovations, LLC.  Linda has more than 25 years of experience in private and non-private sector risk management. Linda shared her experience as a project manager and Director of Operations at Bechtel Corporation. Other roles Linda served at Bechtel include corporate risk manager for a global business unit and project risk manager. Linda currently works at L3 Management Innovations and draws upon her years of professional experience in this area to share with the group.                                                         

Robert E. Scott, Jr., partner at Wilson, Elser, Moskowitz, Edelman & Dicker, LLP. Robert handles litigation on insurance coverage, drug and medical devices and many other areas.  Robert shared his expertise on crisis management and his insights on planning ahead to control future crises.

Sam Terzich, Gallagher Bassett. Sam is a current director of the company and manages specialty claims including product liability, cyber, environmental, pollution and product recall.  Sam has been in the claims industry for 25 years and will address the insurance issues that arise during a company crisis.                                                  

Marisa Trasatti, Esquire, partner at Wilson, Elser, Moskowitz, Edelman & Dicker, LLP, and also General Counsel to Sciton, Inc. Marisa is the moderator of the Top Ten Tips to Manage a Crisis. Marisa shares her unique experiences of managing a crisis as General Counsel for Sciton along with valuable lessons learned as counsel for an organization in the midst of a crisis. Marisa’s practice focuses primarily on civil litigation, with an emphasis on product liability litigation, including cases involving drugs and medical devices.  She is a past president of Maryland Defense Counsel and served as the DRI Maryland State Representative.