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Article: March 2019: Crisis Law Update

March 29, 2019
Business Litigation Reports

Ten Lessons for Coping with Crisis — an interview with partners in Quinn Emanuel’s Crisis Law and Strategy Group. Several years ago, Quinn Emanuel launched a Crisis Law & Strategy Group to help clients in all facets of crisis management, from developing effective short-fused communications to providing advice on longer-term strategic legal and policy issues. As the rapidly-growing group heads into its third year, we interviewed partners from the group in early 2019 to learn their best lessons for managing a crisis.

  1. “Set the Narrative”

Quinn Emanuel’s Crisis Law & Strategy Group is co-chaired by firm Founder and Managing Partner, John B. Quinn. John built the firm’s reputation for winning “bet-the-company” litigation by assembling the most talented dispute resolution lawyers in the world into one firm, and by recognizing that winning at trial often starts with in-house early management of a crisis.

John’s goal in forming the Crisis Law Group three years ago was to organize an impressive team of lawyers and former government officials who bring decades of experience and contacts to bear, who can offer clients much-needed assistance and guidance as a crisis is first developing. He has assembled a group of lawyers with the experience to define the problem, outline your message, then help you get out front and set the narrative. In John’s experience, a successful crisis management strategy always begins with the long-term goal in mind. Step One in a crisis is figuring out the end-game from the very beginning: know what your goals and objectives are, who your audience is, what benchmarks will help define success, and where the obstacles and landmines are buried that must be avoided or overcome.

  1. “Three Dimensional Vision Helps”

According to Bill Burck, Co-Chair of the Crisis Law & Strategy Group and Co-Chair of firm’s Investigations, Government Enforcement and White Collar Criminal Defense Practice, there’s no such thing as a one dimensional crisis. Burck should know, in 2017 he was Benchmark Litigation’s “White Collar/Investigations/Enforcement Lawyer of the Year” and for four consecutive years has been named a “White Collar MVP’s” by Law360. He is also a former Deputy Counsel and Special Counsel to President George W. Bush.

Crisis management is always three dimensional chess — the crisis right in front of you, the one just ahead, and the one around the corner — and you have to be thinking about all three at once. When you are in crisis management mode, you have to start thinking that way on Day One, and keep thinking that way, every day. Congress is a court of public opinion, not a court of law, so it helps to know the ultimate audience for your strategy up front. Whether you’re in front of an international regulator, a jury, a Congressional Committee, all three, or more, specifically identifying your audience as you develop your strategy helps keeps everyone on your team focused on the goal.

  1. “Focus on the Facts You Know”

Tara Lee, Co-Chair of Quinn Emanuel’s National Trial Practice, joined the firm in 2016. She is a former military lawyer, and in 2017, after several high-profile trial victories on behalf of companies facing potentially debilitating whistleblower claims, she was recognized as the 2017 Benchmark Litigation Trial Lawyer of the Year.

Tara regularly serves as spokesperson for her clients’ crisis communications while shepherding their investigation and litigation efforts. In the recent deluge of cases involving allegations of sexual assault, her perspective has been invaluable because she has experience representing both defendants and plaintiffs in civil claims based on sexual assault, discrimination and harassment, in both individual and class action contexts, and has prosecuted and defended sexual assault cases as a criminal lawyer. As a result, she brings a particularly balanced perspective to #metoo cases, recognizing that there’s often a rush to judgment on both sides, in situations where getting to the truth can be elusive. She urges her clients managing crisis situations to keep their messaging focused on the facts they know, and on their ultimate objectives.

  1. “Keep Everyone Rowing in the Same Direction”

Lazar Raynal joined Quinn Emanuel in 2017 from McDermott Will & Emery, where he was Global Chair of the Litigation Practice Group and Chair of the Trust & Estates Practice Group. His practice involves representing some of the wealthiest families and well-known private businesses in the world.

Lazar advises clients facing crisis to focus on keeping the internal stakeholders aligned. This is often the General Counsel’s toughest task during crisis. But it can be done. Legal doesn’t have to operate at odds with PR, the Board needn’t be at war with its President. It takes some leadership skill and some diplomacy, but as the crisis evolves and as facts develop, a good General Counsel will keep seeking input and sharing information. It’s almost impossible to ultimately have a successful external message without your internal stakeholders aligned. If you’ve got critical directors on your board, they generally don’t go away by ignoring them. Once you have outlined a strategy, communicate it with your internal stakeholders, and you’ll be better positioned to be able to hold the course.

  1. “Be Proactive”

Described by American Lawyer magazine as Quinn Emanuel’s “real-life Olivia Pope,” Crystal Nix-Hines rejoined Quinn Emanuel in 2017 after a stint as U.S. ambassador to the United Nations Educational, Scientific and Cultural Organization. She specializes in advising clients on proactive and prophylactic approaches to crisis management.

Crystal’s lesson for coping with crisis is that the best defense can sometimes be a good offense. Proactive responses are possible where prophylactic programs are institutionalized, and cultural values are already in line with the message you want to promulgate. Having a strong, positive company culture doesn’t just help you formulate positive messaging quickly, it ultimately mitigates your legal risk and improves your brand. And when crisis does hit, that engrained culture puts you in the best position to retain the trust of your Board, your shareholders and the public.

  1. “Turn Class Action Litigation Into Opportunity”

Shon Morgan heads Quinn Emanuel’s National Class Action Practice, specializing in collective action defense and multi-district litigation. He has defended over 250 class actions in over 20 different states, and has developed a reputation for finding creative and often early-stage solutions.

These days, a lot of crisis management situations eventually morph into class action litigation. But class action litigation can be turned into opportunity, whether defended or resolved. There is no “right” response to class litigation that seeks to capitalize on a brand in crisis. Plaintiffs’ attorneys bank on adverse publicity to drive a quick settlement, but the reality is that the public has largely become desensitized to class actions. Group litigation can be weathered, and presents a better forum than the press to tell the “long-form” story, i.e., that the company had been diligent; that very few plaintiffs were actually injured or at risk, etc. Perhaps even more often, the real opportunity lies in early resolution. A creative class settlement can often be layered onto voluntary initiatives the defendants were already offering or considering, with modest incremental cost. Such resolutions can convert the suing attorneys and plaintiffs from irritant to advocate, lauding the defendant’s swift and comprehensive response.

  1. “Not Every Crisis is Existential”

Ben O’Neil is a former federal prosecutor and Law360 Rising Star in White Collar who urges his clients in crisis to recognize that not every crisis is life-threatening. The crisis you are experiencing will likely feel like an existential threat to your company’s existence at some point, but over time, you develop a sense for what is truly bet-the-company, and what isn’t.

It often feels like every aspect of a crisis situation is all-out conflict. That’s when it’s especially important to be working alongside a team who has been through it before, so that they can serve as a guidepost for you. When you’re navigating your way through a crisis, you are going to have some good ideas, and some bad ones. And in all likelihood, some powerful, persuasive people on your Board will have at least one really bad idea. You will need an advisor at your side with the reps to know which are the bad ideas and someone strong enough enough to tell you so, or, better yet, to convincingly tell your Board so for you.

  1. “Crisis is Opportunity”

JP Kernisan brings a career in sports law and employment law expertise to his crisis management perspective. He joined the firm in 2018, just in time to manage the Carolina Panthers’ response to allegations that owner Bill Richardson had interacted inappropriately with female employees of the organization. Sports Illustrated described the resulting pivot in media coverage as a “brilliant stroke of crisis management.”

Many people see crisis as something to avoid at all costs, JP observes. But when managed properly, crisis can serve as a unique opportunity for positive change, a chance to do better and be better as an organization. When setting goals for the outcome of any crisis, the best organizations keep this in mind and hold their people internally and their external advisors to this commitment to improvement. JP’s experience in helping professional sports franchises through numerous crises has taught him that some of the most significant and positive organizational change opportunities stem from the crisis management process.

  1. “You Need Well Worn Pathways”

This lesson comes from Michael Liftik, who leads the SEC practice at QE. He joined in 2017 from his position as the Deputy Chief of Staff of the SEC, where he served as a senior legal advisor to Chair Mary Jo White on all aspects of the SEC’s operations, as well as the day-to-day management of the agency. In both his investigations practice and his advisory role to clients, he prepares them to weather the storm, whether that means preparing for congressional testimony or an existential threat to the company.

Michael has substantial experience handling the public relations and public testimony aspects of a crisis. Knowing that crisis management mode is not the time to be forging new paths or testing new relationships; his advice is to make certain you have well-worn pathways in place, routes you can traverse in the dark, routes that go directly to trusted press, accountants, and public relations specialists. When crisis hits, as a general counsel, you will want to have a tier of advisors already in place who are deeply connected and can bring to bear resources very quickly for you. These advisors have to be people you trust. And your crisis management strategy will be far easer to implement if the press already trusts you, if you have a go-to relationship with someone

at the most important newspaper to your industry. You might think you don’t need that now, but the crisis you don’t know about yet is the reason you need it now. Build that media relationship over time, while you can, and make it personal. You will ultimately need a spokesperson who can place a personal call to a reporter and be believed when you need that credibility. That’s a game changer.

  1. “You Do Not Need Blind Loyalty”

The most recent QE addition to the Crisis Law and Strategy Group is Sandra Moser, who joins the group as its new Co-Chair, and who joined the firm in February of this year as Co-Chair of the White Collar and Investigations Group. Sandra was most recently Chief of the US Department of Justice Fraud Section, which has exclusive criminal jurisdiction over the DOJ’s enforcement of the Foreign Corrupt Practices Act and routinely handles many of the world’s most publicized and noteworthy complex criminal cases brought against individuals and corporations. In 2018, she was named as one of the world’s “Top 100 Women in Investigations” by Global Investigations Review.

As an in-house counsel managing a crisis, your subject matter expertise matters less than your managerial judgment and investigatory skills. If those skills are not your strengths, elevate or hire someone who has them, because you will need those skills to make the tough calls that are coming. And know this: Blind Loyalty Kills. Often, your first impulse will be to protect your people, but if done reflexively, that can be the impulse that leads to your worst decisionmaking. It’s especially important while managing a crisis to look immediately and objectively at what your staff should have done or could have done differently and what decisions led to where you find your company now. If you can’t be dispassionate about who has to go, the person who has to go is probably you.