More Than Mere Survival: The GC’s Role in Moving Beyond Crisis
September 08, 2023
In-house counsel should coordinate inside leaders and outside advisors to respond to a crisis. But they also have a role in longer-term response.
The risk landscape is expanding for corporations around the globe. Greater governmental scrutiny, increased threats related to data security and privacy, rapid technological change and unrelenting pressures associated with sociopolitical issues all make it more likely that a business will confront an unexpected incident that threatens its future.
Not surprisingly, that landscape has increased the demands on general counsels (“GCs”) more than ever. According to the 2023 General Counsel Report by FTI Consulting and Relativity, capacity and budgets are strained for 79 percent of legal departments. Demand is rising across nearly every legal function, with all respondents reporting growth in work related to risk management and crisis incident response.
GCs and the Survival Phase of a Corporate Crisis
During a crisis, the GC’s role often expands beyond the strictly legal aspects of the response. For example, the GC often helps build a response team of functional leads who see across the full enterprise, taking on a role in both crisis remediation and determining the root cause of the organization’s predicament.
That means that a well-prepared GC will want to think in advance about how they will handle these roles, including who should be involved in dealing with the immediate fallout and in helping determine the root cause.
In the immediate response phase, the demands on the GC will likely include corresponding with corporate board members, responding to governmental inquiries and anticipating possible litigation. The GC’s role may also involve coordinating a crisis communications team including media and investor relations, government relations, employee communications, social media and human resources.
One of the GC’s biggest challenges early on is addressing the need for an internal and external communications plan. On the one hand, there’s the need to provide an explanation that reassures stakeholders; on the other, there’s consideration of the legal, regulatory and reputational risks of saying too much before all the facts are available. Finding the right balance requires input from senior management, business leads, the communications team and outside crisis communications experts.
One thing is certain: Long workdays will be even longer. With legal departments already strained, adding the many responsibilities that come with a crisis to an already full plate of daily activities is onerous. Drawing on the needed response team is important, but there are other strategies a GC can employ to successfully navigate a crisis and to make sure that the GC’s other responsibilities do not suffer in the meantime.
Know your capacity. Crises can create tunnel vision. While making an effective plan to deal with the fallout from a data leak, fraud, operational error or even social activist allegation, be sure the legal department can continue to address the organization’s day-to-day needs. A crisis may affect only a small percentage of a company’s business, but it can eat up a massive amount of the legal department’s time. There is a tendency to involve everyone in the immediate crisis, but that may not be necessary: A triage system that provides the resources needed to get through the current crisis without ignoring the needs and demands of the rest of the business is advisable.
Look for external expertise. Addressing a crisis demands specific expertise. Supplementing in-house talent with external experts like forensic investigators, data analysts and strategic communications experts provides needed capacity and an independent perspective. Crises, like is said about history, rarely repeat themselves but often rhyme. So collaborating with external people who have deep experience in the type of issue you face not only frees up internal resources, but also substantially enhances the likelihood of a better resolution.
Flex your own experience. Chances are, many executives have never handled a full-blown crisis personally. However, the GC likely has — winning the position often involves a long career that includes experience as an assistant GC, outside counsel or other role where they probably had hands-on experience addressing a crisis. That kind of experience can help assist every member of the crisis response team.
How GCs Can Help an Organization Go from Surviving to Thriving
Given all the demands on the GC and senior management, it is understandable that an organization will seek to transition away from crisis management as soon as possible. But the GC still has a major role to play even when the urgent legal and other ramifications of the crisis recede.
Here's how a GC can help an organization thrive after the worst of the crisis has passed.
Champion long-term solutions. The GC’s credentials put them in a unique position to encourage actions that will help an organization recover from one crisis and prevent the next. Because they are often seen internally as an honest broker, they can work closely with the areas of the company that have a stake in making sure the needed long-term changes are considered.
For example, the GC can collaborate with risk and compliance to help ensure they have sufficient resources to help avoid future pitfalls that led to a crisis. They can work with government affairs and external communications to ensure that a problem with a product that caused a crisis is not only remedied from a manufacturing perspective, but that the steps the enterprise has taken are made known to the appropriate regulators and other stakeholders.
Encourage future thinking. Moving beyond any crisis involves rebuilding a company’s reputation. That takes both time and commitment, and companies may shy away from making the same type of investment in long-term reputation rehabilitation that they made to manage the initial crisis. Because GCs are tasked with spotting emerging risk and managing it for the long term, they have a unique perspective on the type of thinking and investment necessary to truly rehabilitate a company over the long haul.
Speak truth to power. Recovering from crises sometimes involves making business decisions that preserve a company’s long-term ability to operate but are internally unpopular. These types of decisions may negatively affect margins or sales but are essential to protecting the company from falling back into crisis. The GC has experience in setting up legal guardrails that can prevent incentives for one internal group from inadvertently causing harm to the organization.
Ultimately, transitioning from surviving to thriving in the wake of a crisis is not about rewriting the record. It’s about learning from the experience, making genuine changes to how a company operates, regaining the trust of key stakeholders over time and successfully managing risk. Executing all these elements means stakeholders can be confident that the crisis is not only in the rearview mirror, but that the problem is unlikely to occur again. GCs play an important role in making this happen. After all, who is more familiar with risk than they are?
© Copyright 2023. The views expressed herein are those of the author(s) and not necessarily the views of FTI Consulting, Inc., its management, its subsidiaries, its affiliates, or its other professionals.
About The Journal
The FTI Journal publication offers deep and engaging insights to contextualize the issues that matter, and explores topics that will impact the risks your business faces and its reputation.