Crisis management is a constant reality for corporate boards, where legal teams are often the first responders to incidents ranging from cyberattacks to allegations of executive misconduct. Lawyers are often expected not just to answer the legal questions associated with such crises, but also to guide corporate leaders in identifying problems, preserving attorney-client privilege, selecting appropriate resources, and satisfying fiduciary duties, all while maintaining legal and ethical standards throughout the process. The session, moderated by Mac McCoy of Carlton Fields, featured Margarita Rohaidy Delgado of MRD Consulting, Cara Bradley of Brooks Automation, Ami N. Wynne of Morgan, Lewis & Bockius, and Forrest J. Deegan of Spark Compliance Consulting.
Three Scenarios and Their Risks
The panelists led an interdisciplinary, thought-provoking conversation by walking through three fictional case studies- (1) a cyberattack, (2) a CEO ethics crisis, and (3) a patent and trademark war-and discussed best practices for tackling the issues in each scenario. The first case involved a national healthcare company facing a ransomware attack that threatened patient data. In this situation, in-house counsel must move quickly to impose order on chaos rather than slowing down the process.
It is important for counsel to adhere to the incident response plan-which requires that companies and organizations have an incident response plan in place and ready to be executed. Beyond the plan, Bradley noted that identifying the right team is critical. A core crisis team typically includes in-house counsel, a designated executive lead, outside counsel, an information security specialist, a communications professional, and a risk management lead. Ultimately, it becomes the job of the assembled team to collaborate by carrying out their respective tasks and following the plan in place.
The second scenario presented a CEO ethics crisis, where a publicly traded company’s leader was accused of receiving luxury travel and gifts in exchange for consulting arrangements. In these instances, the panelists stressed the importance of accountability. it is important for the investigation team not just to focus on the policies and procedures in place to address such situations, but to consider the accountability factor, as that is ultimately what can have major implications here.
Delgado highlighted that communication is equally critical, as audiences will be waiting for responses. Effective disclosures may include acknowledging the situation, stating that an investigation has begun, noting the retention of counsel, and assuring stakeholders that the company takes the issue seriously. In this particular situation, the lawyers assigned to this crisis should evaluate legal liability, regulatory exposure, fiduciary duties, disclosure obligations, employment consequences, insurance coverage, contractual obligations, litigation risk, privilege and waiver, and reputation and stakeholder trust.
The third case study centered on a patent and trademark war following the launch of a new artificial intelligence platform. Competitors quickly filed lawsuits alleging infringement and theft of property concepts. The panelists agreed that one of the best practices in this context is to avoid discussing active litigation publicly. Anything discussed in the media may be used against the company in court.
Another best practice in this instance is that, given the high litigation stakes, attorneys need to be involved in approving all messaging, both internally and externally. It is important that attorneys review messaging for accuracy, consistency with public statements, preservation instructions, confidentiality obligations, media response guidance, whistleblower and anti-retaliation issues, and litigation hold language. Communications teams also require a clear legal contact to prevent delays, a detail that must be planned for in advance.
Panel Discussion and Best Practices
Prior to diving into the case studies, the panelists set the stage for the discussion by sharing their thoughts on what consumes their minds in moments of crisis. Bradley emphasized the need for a proper team and resources before a crisis arises. Deegan stated that when it comes to a crisis, it is not a matter of how it will happen, but when it will happen. Delgado emphasized concerns surrounding communication strategies and understanding vulnerabilities and communication risks before a crisis. Wynne stressed the overarching theme shared by all: proper preparation.
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