The Role of Law Firms in Crisis Management

Crisis prevention and management has become a top priority for organizations across various sectors. To understand how advanced companies are in this critical discipline, FTI Consulting sponsored a global Economist Impact survey of 600 primary legal decision-makers. FTI’s EMEA Chairman, Lars Faeste, provides insights into this survey, calling out the biggest risk areas and what companies can do to prevent new crisis events.

The survey highlights a clear need for stronger collaborative alliances between GCs, their organizations, their law firms and other expert advisors to avoid the preventable and overcome the unavoidable. The survey reveals a worrying trend: companies are least prepared for the crises that pose the greatest threats.

Worse still, many fail to learn from past events. More than two-thirds of those surveyed said their organizations do not engage in crisis stress testing or scenario drills, missing key opportunities to improve their crisis strategies by integrating learnings from past crisis events.

Least Prepared For Crisis Proposing The Greatest Risk

role law firms crisis management graph

Source: Role of general counsel in a crisis survey, Economist Impact, 2024

Reputation, Reputation, Reputation

Corporate reputation is particularly vulnerable — only around 30% of organizations have crisis communication playbooks. This gap leaves many exposed. By working together, law firms and strategic communications experts can shape crisis and litigation communication strategies, ensuring that public statements, media responses and all stakeholder engagement throughout the crisis mitigate the risks to an organization.

Supply Chain Checkpoints

Supply chains are another significant risk. It will be no surprise to learn that nearly half of the respondents in North America, and slightly fewer in EMEA, are investing in supply chain redundancy plans to mitigate potential crises. Law firms can help by supporting their clients in the review and monitoring of supply chain arrangements and conducting due diligence in transactions. Extending this scrutiny to subcontractors will also help to identify legal, regulatory and business risks before they snowball.

Training for Prevention

Another key issue is insufficient crisis management training. Nearly a third of GCs report insufficient resources in this area. Post-crisis reviews, realistic simulations and board-level involvement are essential to ensure everyone understands their role during a crisis. Law firms provide valuable input alongside other experts in areas where organisations have limited skills.

Rapid Response

The first 48 hours of a corporate crisis are critical. Emotions run high and can cloud leadership’s judgment. Again, law firms have a critical role to play as part of the GC’s standing crisis response team. With their deep understanding of a client’s crisis plans, they can help to guide decision-making in those early hours.

Twenty-three percent of GCs cited regulatory or compliance crises as a top concern. Getting these wrong can cost organizations dearly — both financially and reputationally. With regulatory challenges on the rise, particularly in areas like AI and data, law firms enable GCs to keep up with developments by fine-tuning compliance strategies, providing tailored training and sharing best practices that benchmark compliance frameworks to set out what good looks like.

This article is part of the “Mastering Crises” series, a collection of insights on crisis management, featuring thought leadership from Lars Faeste. Explore the other articles in this series below.

Operational Resilience: A Cornerstone for Value Creation in Private Equity
The private equity (“PE”) industry drives growth and transformation, but focusing on operational resilience is often overlooked yet vital for PE success.
Click here to read the full article.

How Boards Can Navigate Crises in an Era of Upheaval
An article on how Boards must lead crisis management, ensuring resilience, agility and strategic oversight that strengthens governance in uncertain times.
Click here to read the full article.

Beyond Crisis Management: General Counsel Takeaways in a Changing World
Key crisis management takeaways for General Counsel, who play a vital role in helping organisations navigate fast-changing geopolitical and economic risks.
Click here to read the full article.

Turbulent Waters, Trusted Anchors: The General Counsel’s Evolving Role in Navigating Crises
As the general counsel role evolves into crisis leadership, what measures can organizations take to prepare for more severe events in today’s environment?
Click here to read the full report.