Author: Simon Pugh
Lawyers are increasingly asked to provide clients with advice beyond the purely legal realm. Rather than simply, “How can we reach a settlement?” or “How do we win at trial?” they are being asked “What will our customers think?” or “Will it inhibit our ability to attract investment from an ESG fund?”.
Understanding and mitigating the risk to reputation is now a fundamental part of the legal strategy – or at least it should be.
Here, we look at some practical steps can be taken to protect a brand that is involved in litigation.
Understanding who matters
Traditionally, legal teams have been focused on directly persuading the court of the merits of their case. There exists a presumption that the court cannot be swayed by external factors. This is almost certainly correct but that is not to say that these external factors do not have an impact on a business, and that a business shouldn’t take into account external factors when thinking about how to mitigate reputational impact of litigation. They are, therefore, intrinsically linked to the litigation. As a result, this is a problem that the full suite of advisors to the case need to solve.
Undertaking a thorough mapping and scenario planning exercise will help the team to think through the wider implications of litigation, understand where the risk areas lie and, crucially, prepare for them.
Of course, your opponents will understand this all too well. They may well to seek to leverage any perceived weaknesses as a way of applying pressure. Therefore, as you undertake this exercise you should consider how the story could evolve if stakeholders are deliberately briefed by your opponents.
In some instances, it may be the case that litigation is being brought not for the purpose of winning and securing damages but for some other cause. Claimants may be seeking to alter a businesses’ position on a certain issue or force a change in commercial operation. With the noticeable rise of ESG related cases, we see this more and more. In these instances, the litigation might simply be providing the claimant with a reason to apply pressure via investors or the media. In cases like these, understanding and managing external factors is even more important.
“In god we trust, all else must bring data”.
Businesses should consider how they can asses the impact litigation will have on different stakeholders. Commissioning primary research such as polling provides data rather than simply relying on conjecture. Research can be highly targeted, allowing you to drill-down on groups within groups. Most organisations will have a head-start because they will already possess a significant amount of information about the makeup of these groups.
In line with British Polling Council standards, polling can be ‘double-blinded’ meaning respondents are not aware of the specific brand in question. Questions do not contain direct references to the brand in question or contain specific details of the legal action.
Crucially this means that research can be conducted when the case, or aspects of it, are not in the public domain without compromising the confidentiality requirements of the legal process. This also enables you to test different scenarios before the outcome is known.
As well as collecting information to model the impact, research can be used to test and hone the response. There are a broad range of techniques available from large-scale quantitative surveys to much smaller focus groups that enable a business to probe on specific points. A/B testing can be used to determine which content, for example visual assets, is the most engaging and informative for your desired audience. Where time is on your side, a mix of different techniques will provide the most rounded outcome.
Whether to litigate is sometimes a difficult decision for senior leadership. Primary research is valuable to reassure internal stakeholders that the right path is being pursued and that reputation is being managed as part of the legal strategy.
Life goes on….
Claimant or defendant, win or lose, no one escapes major litigation without at least a scratch on their reputation. Businesses have to continue to sell their products, attract talent and secure investment after a case has concluded. For many businesses, that is the point that reputation recovery is first considered.
However, this approach is both riskier and generally requires more effort given the standing start. If reputation is considered over the full arc of the case, then the landing at the end should be less bumpy.
Simon is a Partner in the Litigation Communications and Disputes practice at Portland. He provides specialist communications advice to legal teams and their clients, with a particular focus on contentious situations and reputation management. His work spans a broad range of legal situations, including group litigation (both claimant and defendant), judicial review, regulatory and other investigations, IP and commercial litigation.