The American Bar Association this summer changed its code of conduct for corporate lawyers, a move that could have a huge impact on how communications executives do their jobs.
Under the new rules, attorneys can now breach client confidentiality in the greater interest of protecting a company from harm caused by an employee's illegal actions. The bar
says lawyers also can breach confidence in order to prevent a client's crime, if doing so would save the company from suffering financially.
To breach client confidence means, of course, to go public in some form or fashion -- and that means PR had better get with the program. Should attorneys begin taking action
under these new codes of behavior, PR executives may find themselves with new sorts of stories to tell. "Disclosure is not just hanging out the dirty laundry. It is effective
communication, and that is where the PR people are most effective," says Stanley Keller, an attorney with the law firm Palmer & Dodge LLP in Boston.
Keller should know. Until mid-August he chaired the ABA's federal regulation of securities committee, and served as a special advisor to the association's task force on
corporate responsibility. Increasingly, it seems, one of those responsibilities includes spilling the bad news, and if lawyers are going to be talking top PR execs need to be in
the loop.
"Whenever the lawyers are involved, it takes it to a higher level. I have a whole PR team here, but if the lawyers are involved, I always handle it myself," says Denise
Kaigler, VP of global communications at Reebok International. "People tend to look more closely and read the news more carefully if it involves legal action. So we handle those
things very carefully and with great sensitivity."
When lawyers step in, words take on new meaning and every nuance is parsed. Hence, the "great sensitivity" exercised by Kaigler and others. But there is another consideration
at play here, one that perhaps demands even greater care: the difference between "the storm sank our boat" versus "Our captain got drunk and ran into something."
A couple of years ago, the 9,500-person tech firm Fairchild Semiconductor was forced by an ice storm to take a semiconductor plant off-line for a couple of days, requiring PR
to unleash some bad news. "But that was an external event, something that happens to you," says Senior Director of Corporate Communications Fran Harrison.
Suppose now that corporate counsel were to ask Harrison to announce a very different kind of news, the kind where an employee broke the law or perhaps the whole company went
astray. As bad news goes, the we-did-bad message requires a different tact. For Harrison, the first consideration would have to do with the firm's own response. "Part of the
nuance on your message will depend on how the corporation decides to handle that situation. In the case of an employee's actions, is this person going to be immediately forced to
resign? These are decisions that are going to be made at the level of the CEO and the board of directors," she says. To have the full range of options, PR has got to have some say
into how that situation is handled. Clout in the executive suite today will make the work less painful tomorrow.
No Comment?
Of course, the mere presence of attorneys suggests that the matter may not be settled in the boardroom. In fact, it may not be resolved any time soon, in which case PR will
need to tread gingerly. The case may have sparked an ongoing investigation. If so, you can break the news, but you cannot divulge details.
"The details at that point are speculation, and I don't think communicators should be engaging in speculation," she says. In this case, the optimal course is to release certain
details and then declare candidly that certain ground cannot be covered. Even more problematic is the specter of legal action. Very often a PR executive will assume that ongoing
legal action leads directly to a "no comment."
Even in cases where legal action seems imminent, there's still wiggle room for effective communications. "The legal situation often is the most important consideration. We
don't want a client to say something now that will hurt them in defending themselves later," says Marcia Horowitz, senior executive vice president at New York-based PR firm
Rubenstein Associates. That said, "It still is possible to balance the PR needs of the client against the legal consideration."
In practice, this means that while it may not always be possible to tell the whole story, there still may be a way to work constructively with the media without giving away the
store. "There is always a middle ground. Often the lawyers will move a couple of degrees and will give us some leeway to get the client's message across" without doing any legal
harm, Horowitz says.
Chain of Command
The new bar association guidelines make it clear that no lawyer should breach confidentiality without exhausting all other options. So, a lawyer who smells something funny
internally needs to first take his concern to the executive suite and the boardroom. Public disclosure becomes an option only when corporate leaders fail to act.
Indeed, there are shades of gray, and these areas of ambiguity give the PR professional some room to maneuver. "A lawyer can say, 'I told them and they refused to change,' but
I would have to think that the client would have a good reason why they didn't think they were doing something wrong," Horowitz says.
She and other PR pros agree that the paramount rule in spinning bad news of this or any other stripe is to spin as little as possible. "If you have an issue where you wish
something had been different, it is clearly best to be open and honest about what has happened, and in that way to be ahead of the debate," says Peter Debreceny, vice president of
corporate relations at Allstate.
Contacts: Peter Debreceny, 847.402.3111, pdebrece@allstate.com; Fran Harrison, 207.775.8576, Fran.Harrison@fairchildsemi.com; Marcia Horowitz, 212.843.8000, mhorowitz@rubenstein.com; Denise Kaigler, 781.401.7869, denise.kaigler@reebok.com;
Stanley Keller, 617.239.0217, skeller@palmerdodge.com
Courting Attorneys
Under new bar association guidelines, lawyers can sometimes break client confidence and go public with corporate malfeasance. That could leave PR with a mess to clean up. How
can PR pros prepare for the possibility of corporate lawyers spilling bad news?
For Peter Debreceny, vice president of corporate relations at Allstate, it begins with strong interdepartmental connections. "What sort of partnership is there between the
communications function and the legal function? How closely do they work and do they understand each other's issues?" he says. At Allstate, PR and legal teams meet formally once a
week and engage informally all the time. "It is just part of normal daily operations."
Some say the groundwork for such situations is laid even earlier - before the first day of work, in fact. At Fairchild Semiconductor, that's how Senior Director of Corporate
Communications Fran Harrison approaches the issue.
"My bottom line on this would be that this same question existed pre-Enron, pre-SEC rules, pre-ABA rules. It is a fundamental question for any communications professional,"
she says. "Before you go to work for any corporation, you need to fully explore the question of how they conduct themselves."