Page 24 - CCCA 247020 Magazine Spring 2016

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Now in-house counsel must be concerned about the organiza- ent to the company. There’s quantifable damage and it has a
tion’s reputation. substantial effect. With GM and Volkswagen, the share prices
“Increasingly General Counsel are not just tasked with legal dropped and sales dropped. There’s a cost there.”
issues but with reputation management,” says John Ratchford,

Principal and General Counsel at Navigator, a public strategy Step 2 Assess the Risk
and communications frm specializing in crisis management.
“In the past, litigators focused on legal jeopardy. That was fne To help keep costs down, in-house counsel must manage risk.
in the pre-Internet days. Now lawyers have to do legal and This is accomplished through crisis management plans, which
reputation at the same time. Lawyers want to get all the details include contingency plans and a list of responsibilities and du-
before they say anything. Communication people want to say ties for each department.
more but in the simplest way possible. General Counsel realize “In-house counsel have the critical job of putting in place
more that they need to do both.” appropriate crisis management plans.” says Todd Burke, a se-
One of the major decisions for management will be if the nior litigation partner at Gowlings who practices in the crisis
organization should apologize. In-house counsel must carefully management area. “They are part of helping to create good gov-
weigh whether an apology is appropriate, and make sure that if ernance so their organization should be in a ready position. In-
an apology is issued, it’s sincere. Apologies can help alleviate any house can take the lead in effective planning.”
public outrage and maintain confdence in the organization. A good crisis management plan includes representatives
GM CEO Mary Barra apologized in March 2014 to employees, from multiple departments with a centralized offce or commit-
one month after the early recalls, and publicly in front of a U.S. tee to coordinate tasks. To help identify risks, Burke says organi-
congressional committee. Volkswagen issued a public apology zations need to use vulnerability audits. Creating a crisis man-
through a full-page ad in several American newspapers. agement plan shouldn’t be a once-for-all task. Plans must be
“Most jurisdictions have apologies legislation that enables practiced and fne-tuned through training and practice drills.
organizations to say sorry without litigation risk,” says Ratch- “You need a multidisciplinary plan that incorporates legal,
ford. “Saying it early is good. It is a challenge and there’s no way communications and regulatory aspects,” says Burke. “The plan
to make it easy.” has to address your constituency and who your stakeholders
Apologies are part of keeping a strong reputation. Crisis are. A good plan is one that takes a holistic view of the organi-
management plans must include steps to maintain an orga- zation. You also don’t want a crisis management plan to sit on
nization’s reputation, particularly after the emergency is over. the shelf and is never revisited so keeping it current is key.”
Ratchford warns in-house counsel not to minimize the fnan- While the organization is working to fx the problem, in-
cial cost of damaged reputations. house counsel must keep an eye on statutory and regulatory
“The tendency is to view legal jeopardy as quantifable in concerns. Volkswagen was forced to admit wrongdoing by the
terms of damages whereas reputation is seen as nebulous and Environmental Protection Agency (EPA), not the National High-
unquantifable,” says Ratchford. “I see defnite quantifable loss way Traffc and Safety Administration (NHTSA), the major U.S.
in reputation with loss of sales, loss of senior management, agency that regulates vehicles. Have a clear plan in place to priori-
share prices going down and the inability to recruit new tal- tize what legislation must be checked for different emergencies.

“I’ve been practicing law for 29 years “lawyers want to get all the details
and in the beginning we said we don’t before they say anything. Communication
answer questions except in front of the people want to say more but in the
courts. We can’t do that anymore. don’t simplest way possible. general Counsel
try to avoid questions. Take your lumps. ” realize more that they need to do both. ”

Mary Ellen Bench, City Solicitor, John Ratchford,
City of Mississauga Principal and General Counsel, Navigator

24 CCCa MaGazInE | SPRInG 2016 PRInTEMPS