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Plan for the worst, pray for the best

By: dmc-admin//May 26, 2008//

Plan for the worst, pray for the best

By: dmc-admin//May 26, 2008//

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An employee attends the company Christmas party and overindulges on “holiday cheer.”

On the way home, the employee swerves into oncoming traffic, collides with another car and injures the other driver.

A company may never plan for this scenario, but according to attorney Bruce J. Lindl, it should if it wants to stay in business.

Lindl and other attorneys spoke about the critical need for companies, especially small ones, to develop and implement crisis management strategies, before disaster strikes.

“I think a lot of companies are not sure what the definition of a crisis is,” said Lindl, who serves as in-house counsel for Regal Ware, Inc. in Kewaskum. “It’s not just an explosion or a product recall.”

Pick a Plan

While defining a crisis may be difficult, planning for one should not be, said Lindl, regardless of the size of the company.

As the lone attorney on staff at the international stainless steel cookware company, Lindl said he, along with other solo in-house lawyers, frequently plays a variety of roles when defusing a potentially explosive situation.

Whether it is communicating with shareholders, dealing with the press or possibly working with outside counsel, Lindl said the fact that he is just one person is no excuse for a company not to plan for the worst.

But attorney Nathan A. Fishbach said in his experience, it is not always easy for a smaller company to justify the initial expense of a compliance plan for crisis management.

“A smaller company may look at a compliance plan as an unnecessary expense and that’s fine until something bad happens,” said Fishbach, who practices business and commercial litigation at Whyte Hirschboeck Dudek, S.C., in Milwaukee.

By then, it could be too late.

When a problem does arise at a small company without an effective crisis strategy in place, Fishbach said his job as outside counsel is doubly difficult because of the time he spends getting caught up on the situation.

“It’s kind of like getting a second surgery because the first one wasn’t done right,” said Fishbach. “It’s a difficult situation, but if it’s a crisis that impacts the company’s survival, you have to get the best possible advice.”

As a starting point, Lindl recommended that companies without plans visit the Federal Emergency Management Agency’s (FEMA) Web site. The site offers several tips and general plans to help guide businesses.

Think Small, Act Big

Fishbach noted that the size of the company will likely dictate the type of plan which will best suit its needs.

In other words, a locally-owned corner hardware store will not have the same plan as a Fortune 500 company.

“A larger company has a bigger brand identity they are concerned with, and the problems are often more sophisticated,” said Fishbach.

Attorney Patricia M. Whaley serves as vice president and general counsel for Rexnord, LLC, and said the complexity of the Falk explosion forced the company to retain outside counsel and communications personnel to manage the situation.

While Whaley dealt with some of the issues in-house, she filtered many out to specialists who were part of the company’s crisis management plan.

“What we try and be careful about is if we don’t have expertise in an area, or we’re just overwhelmed by the amount of issues, as with the Falk explosion, we needed other people to start working right away,” said Whaley.

Lindl said the same sense of urgency applies for a small company. Even though the in-house attorney might be able to get a handle on the first stage of a crisis, that does not mean he or she has things under control.

At the same time, a company does not need to “break the bank,” when bringing in specialists.

“A smaller company can work with outside public relations and counsel and get through and manage a crisis without using all of the necessary money if they turn the corner on the problem in one stage,” said Lindl.

If not, at least the company has the right people working to resolve the problem, added Lindl.

So even though the employee may still celebrate too much at the holiday party, the company will have a plan in place if that employee makes a poor decision that could hurt another person, as well as the employee’s company.

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