Through the Mud

For more crisis management advice from the experts quoted in this story, click here.

David Dunn recalls a classroom scene from his first year of law school. The students were discussing a 1930s case involving a railroad company, and the professor asked them to name the rule of the case.

People came up with all sorts of exotic answers," recounts Dunn, a litigation partner at Hogan & Hartson. "And after about 15 minutes the professor turned, pounded on the table and said, 'No, the rule in this case is that in the 1930s the railroad always loses.'" In May, California's East West Bank faced what it feared would be a similar fate--that in the early years of this century, the bank always loses.

"That is just a fact you have to deal with," Dunn says. "Be cognizant of the general public perception of your client's company, in particular the business your client is in and the environment or market in which your client functions. Those are all factors and pieces of baggage a juror brings to the jury room."

That's why Miller contends that when facing a jury, voir dire is "the single most important phase of a trial." When he goes through the jury selection process, his strategy is to even out the playing field in terms of juror bias as much as possible, employing a jury consultant when necessary. But Dunn points out that jury selection is hard to predict: "Every jury is different, and juries are very hard to fathom in terms of the dynamic that is likely to develop between them."

Reputation Maintenance

Particularly for companies that deal directly with consumers, that rebuilding process is vital. Depending on how severe the situation is, this may require the help of a crisis management expert. "If you are, for example, a financial services company, anything having to do with a conflict of interest and protecting clients is really critical because the business is so based on trust," Diermeier says. "Even an issue that may look small or isolated can have a tremendous reputational impact."

Of course, companies should not wait until litigation arises before protecting their reputations, especially in these days in which cynicism toward corporations is high and trust is continuing to diminish. Critical situations require going beyond the specific facts of one case to show more generally that a business has processes and values in place to make problems as unlikely as possible. So don't just place blame on a rogue employee, Diermeier says. When it comes to situations that threaten a business' ability to function, the company should be able to demonstrate that the behavior is inconceivable to its employees and that, if issues do arise, general managers can quickly detect them and act on them.

Associate Editor

Melissa Maleske

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