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Bar News - December 13, 2013


Business Law & Business Litigation: Social Media and Commercial Litigation: Dealing with Crisis

By:

When a business has a communications crisis, the impact on the brand is decided in the court of public opinion long before the court of law. For some consumer-facing companies, the loss of trust and confidence in products or services is a commercial death sentence.

Social media has accelerated the pace at which the public passes judgment on such issues. This new reality means that a trial lawyer counseling a company through a crisis must be skilled and facile with Internet-friendly crisis communications.

Smartphones provide ubiquitous Internet connectivity. Information – accurate or not – moves fast and reaches far. Information about catastrophic events involving the health and safety of consumers moves particularly fast. Company brands – painstakingly built and burnished over years – can be irreparably damaged or destroyed very quickly through the movement of this information.

Fundamentally, brands are promises made to consumers by companies about the essential attributes of their products or services. Brands are either reinforced or damaged based on each consumer interaction or experience. Catastrophic brand damage may result when a situation calls into question important attributes such as health and safety. Social media magnifies the reach and impact of such disastrous events.

When helping a client through a crisis situation, it’s important for attorneys to take a step back and ask: As outside counsel, what should we do?

Stop the active harm. In most circumstances, the first priority is to intercede and stop whatever damage is being done. Stop and think like a physician in an emergency room. First, move quickly to triage the situation. Identify the emergent problems and prioritize action. Work to stop the active harm. Stabilize the circumstance. This process often requires mobilizing internal or external “experts” who have the specialized knowledge or skills to abate the problem, to help identify the cause, and to help build a remediation or recovery plan.

Communicate what you know when you know it. Immediate and transparent action is necessary to repair this broken promise and to restore confidence in the health and safety of the product or service. Companies need someone to become the face of the crisis. That person needs to provide timely and accurate information about what happened, how it happened, and the plan for remediation. Create a website where interested parties can get timely, accurate, and reliable information about the situation.

An effective communications plan is essential. The importance of this cannot be downplayed, but words themselves are never enough to deal with the aftermath of a crisis. Words must be accompanied by actions.

Brand restoration starts with demonstrating that the company understands the essential nature of the problem and that reasonable and appropriate action is being undertaken to address it. A detailed set of action items that is widely communicated is an important tool. Provide timely updates on milestones reached or new information material to the crisis. Don’t make promises – especially those about providing information – that cannot be kept. Discipline on these issues helps develop transparency and may restore some measure of confidence.

Use social media. We no longer live in a world that just operates through “traditional” media. Any communications plan should include a specific social media strategy as the Internet is a powerful tool both to gather and disseminate information material to effective crisis management. Established social media (i.e. Facebook, Twitter, etc.) may be effective channels to disseminate accurate information to consumers who follow the company’s products and services. This should be used in conjunction with websites and databases to provide easy access to responsive information. Getting such information out through such channels helps to ensure that there is no void of information, which itself can contribute the propagation of misinformation.

Listen to what is being said. Social media can be a valuable research tool. Follow the social media discussions in the midst of a crisis to help bring into focus the areas that need further clarity or information. Indeed, depending on the nature and extent of the misinformation, it may be appropriate as part of a communications response plan to address the inaccurate chatter.

Help your clients make good choices about disseminating information, even if it may limit options at trial. Among the hardest things for outside counsel to do in a crisis is to help clients strike the right balance between not overreaching in the communications, but also to not default into a public communications posture of “no comment.” Recognizing that crises are a different kind of legal problem requiring a different strategy is mission critical.

Defense counsel are largely hard-wired to be deeply thoughtful, analytical, and oriented to preserve all viable arguments for a trial years in the future. Catastrophic events often deny outside counsel that luxury. Actions are required long before all the facts, circumstances and implications of the crisis are known. For some, it is an uneasy reality that actions taken in the first days of a crisis may foreclose or limit trial positions.

To be a value-add counselor in a crisis, it is essential to refocus energies on dealing with the immediate consequences of the situation. Actions designed to limit harm, rebuild trust and confidence, and help impacted consumers may be the difference between survival and failure. Preserving arguments for a contemplated future day in court is a pyric victory if there is no client left to defend when the trial starts.


Scott O’Connell is the vice chair of Nixon Peabody’s 300-attorney national litigation department. He focuses on class action defense, governance litigation, and crisis management.

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