When it comes to litigation, people often forget that there are two courts: the court of law and the court of public opinion.
Balancing the two can be the difference between a reputational crisis and a smooth outcome.
People are dragged into court every day. Business disputes, divorces, arrests, employment matters—any of which can end up in a courtroom. Eventually, they are all resolved, but, as they’re being litigated, they present a special reputational challenge for businesses and executives.
How litigation impacts reputation management
Journalists have broad protections in what they report, provided the information they rely upon comes from official documents. Libel and defamation suits are hard to win to begin with. They are almost impossible to win when journalists simply report on allegations made in arrest reports, indictments or civil actions.
As a result, any litigation could lead to a boatload of negative media, often only depicting one side of the story—even if you’re not in the wrong. It’s not uncommon for plaintiffs to make a series of explosive allegations: suggestions of racial discrimination, sexual harassment (an especially potent charge nowadays) or knowledge of fraud or improper behavior on the part of the business. While litigants have to certify that what they say is true, how they present information they have can often make small matters look large.
As a hypothetical, you fire an employee for poor performance. Shortly later, your company is slapped with a wrongful-termination lawsuit, with the former employee claiming he had knowledge of financial misdeeds that amounted to a Ponzi scheme. It isn’t true, but it doesn’t necessarily have to be. Journalists can write a story that essentially says an ex-employee is accusing your company of engaging in a Ponzi scheme. Clearly, that kind of press can hurt your reputation with customers, regulators and employees.
It’s easy to see why litigants would make these spurious allegations. Often, they feel that it gives them leverage in negotiations. Even if a company or person is in the right, they don’t want to endure the reputational risk of litigation, so it might push them to settle early in the process. Indeed, the framework for allegations are often made in initial demand letters to companies before a suit is even filed. If that sounds like extortion, it is. But it is largely legal, though not always ethical.
Many attorneys avoid bringing in communications help for fear that a media strategy will complicate the legal strategy. After all, statements made in the press are usually admissible in lawsuits and a misstatement or botched interview can hurt your cause in court.
However, that’s short-sighted. Even if you prevail, the reputational hit you and your business takes can be hard to fix.
Take these five steps to protect your organization in the face of a lawsuit, frivolous or otherwise.
1. Call for crisis help quickly.
The first call after your lawyer should be to a crisis-communications specialist. Reporters look for lawsuits as a matter of course in their work, so a call from a reporter could come at any time.
Savvy plaintiff’s attorneys will alert journalists to their suits to heighten the leverage they have in negotiations. You must have a plan in place before a reporter ever calls.
2. Find a way to comment.
It’s common for spokespeople to decline to comment to reporters, citing the ongoing litigation. While that might help in the courtroom, it leaves your reputation vulnerable to your opponents. Your customers, business partners and employees are not going to be sitting in a courtroom listening to you defend yourself, nor will they pore over your legal responses.
You have to forcefully lay out your position in every media piece written about you. Prepare a statement that at minimum denies the allegations and lets audiences know you will not let charges stand unchallenged.
3. Work to stop stories from happening.
Journalists are generally an ethical bunch of folks. Just because they call with an inquiry doesn’t mean they will write the story. When they call for comment, they are seeking facts and perspectives.
In many cases, you can provide enough information on background or off the record (knowing the difference is important) to make them decide that writing a story based on allegations from a lawsuit won’t give their readers a true picture of a situation.
4. Own your mistakes.
It’s rare for there to be zero basis to allegations made in lawsuits. Be prepared to fess up to ways in which you behaved badly. That context will be important in telling your story and in reclaiming your reputation when the litigation passes.
Remember: Rarely do these suits end in a definitive verdict. There is almost always some kind of settlement and those leave lingering questions about who was wrong and who was right. Providing an honest narrative is a great way to maintain or restore trust with customers and partners.
5. Don’t do it again.
If you did wrong, remember that you can redeem yourself. Most audiences will give you a second chance and true contrition leads to business redemption.
The exception to that rule is if you make the same mistakes over and over again. Learn from your mistakes and you’ll likely not have to face judgment again.
Ray Hennessey is the Chief Innovation Officer for JConnelly. A version of this article originally appeared on the JConnelly Blog.