Crises come in many forms.  Expert panelists at the MSBA Legal Summit recently discussed the Top Ten Tips on How to Manage a Company Crisis.  The program was moderated by Marisa Trasatti, Esquire, partner at Wilson, Elser, Moskowitz, Edelman & Dicker, LLP.  The top ten tips on how to manage a company crisis were identified by the panel of crisis experts:

• Determine What Activities the Crisis Management Plan (Before the Crisis)
• Formulate the Crisis Management Team 
• Assess the Crisis 
• The Initial Response 
• Insurance
• Manage the External Appearance: Public Relations, Media, and Customers 
• Manage the Internal Appearance – Advising Employees and Communicating with Key Opinion Leaders
• Adjust the Company’s Promotional & Sales Practices
• Response to Regulatory/Law Enforcement
• Concluding the Plan

Last week we discussed the importance of formulating a crisis management plan before the crisis hits and the critical role that the  plan plays in navigating the crisis.  The panelists urged identifying the crisis levels as Level 1 (low level), Level 2 and Level 3 (most severe) so that your response is proportional to the severity of the crisis.  This week we will be discussing the second of the above ten tips that the experts identified on how to manage a company crisis.   

Second Tip – Formulate the Crisis Management Team (“SWAT Team”)

On day one of a company crisis you should establish a crisis management team (“SWAT Team”) not only to evaluate the impact of the crisis, but to lead the company through the crisis.  Like the crisis management plan, it is critical to create the SWAT Team before the crisis occurs and then add the experts necessary that can uniquely address the specific type of crisis, i.e., for a regulatory issue you may need an expert in regulatory matters.  Other qualities for team members should be organizational skills, good communication skills and dependability.

Identifying the role of each team member is also vital.  Examples of good team members include a leader or “quarterback” who leads the team through the crisis, a C-suite level employee (CEO, CFO, COO or CIO), a person experienced in compliance or regulatory affairs, or public relations, or in-house or outside counsel, or all three, said Ms. Trasatti.   

Aaron Burton, CEO of Sciton, Inc. shared his experiences navigating two separate crises: a regulatory crisis and the COVID pandemic.  “You need to have the team preset and know who they are and depending on the crisis and different levels you will have a different quarterback.”  Burton partnered with Sciton’s President to lead their SWAT Team through the regulatory issue. However, with the pandemic he was the sole quarterback. “The pandemic required all hands-on deck as with most companies – daily calls, then weekly calls.”  The more severe the crisis, the more leaders you need involved, he added. Burton recommends that you determine how many teams you want,  and then communicate regularly with your teams.  

It is important to identify in your crisis management plan the levels of crisis and identify when the SWAT Team begins to take their role to contain the crisis, assess it, and understand what is happening, said Linda Lenrow Lopez, an expert in private and non-private risk management.  By example, Ms. Lopez indicated a good rule of thumb is that if the Wall Street Journal calls then in less than an hour the top executive offices need to be placed on notice and the SWAT Team should be activated.  She also recommends that a Level 3 Crisis Team (most severe crisis) should always include your director of communications, your CFO, and your COO, at least until the quarterback is identified.  Also, the quarterback should be someone that is incredibly organized, incredibly able to influence in order to coordinate all of the efforts on the SWAT Team and keep things moving with regular follow up. “That is a really critical thing,” said Lopez.

The experts all agreed that your crisis management plan should identify when you need internal or external teams or both.  The experts also all agreed that your crisis management plan should specifically identify the membership of each SWAT Team and be delegated the appropriate authority to contain the crisis.  Likewise, membership on the team should be directly proportional to the severity of the crisis. A CEO may not need to be a member of a Level 1 SWAT Team, but will be an excellent selection for a level 3 crisis.   

You may watch the experts discuss the Second Tip – Formulate the Crisis Management Team (“SWAT” Team) below: 

Join us in the coming weeks as we continue to cover in detail the Top Ten Tips on How to Manage a Company Crisis.    

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This is the fourth of a 13-week part series that will discuss in detail how counsel can help their clients create a crisis management strategy.  This series is designed to assist you, as counsel, in weathering a company crisis when it comes knocking.  Last week, the MSBA discussed the first of ten tips on how to manage a company crisis. Next week, the MSBA will discuss the third of ten tips to manage a company crisis with comprehensive suggestions and actions for implementation.  The immediate next seven weeks will address, individually, the other seven tips to manage a company crisis.  The final week will include a comprehensive summation of all the myths and tips including the advice and counsel of the professional panelists listed below.  In week one of the series, the MSBA generally discussed the top ten tips on how to manage a company crisis. Week two was a detailed summary of the 7 myths of a company crisis.  Some of the material to support this article was taken from “Top Ten Steps in Managing a Company Crisis,” by Marisa A. Trasatti, Zachary A. Miller and Sean M. Fox.  The MSBA wishes to express sincere gratitude to the professional panelists, without whom it would not be possible to offer this series.

Panelists:                                                                     

Aaron C. Burton, CEO of Sciton, Inc. Sciton, Inc. is the largest privately held dermatological and medical device laser manufacturer.  Aaron shared his experience as CEO and especially the crisis that developed at Sciton during his first year. Aaron also generously shared how Sciton handled and endured the COVID crisis.   

Linda Lenrow Lopez, Director of Operations, Risk Alternatives, L3 Management Innovations, LLC.  Linda has more than 25 years of experience in private and non-private sector risk management. Linda shared her experience as a project manager and Director of Operations at Bechtel Corporation. Other roles Linda served at Bechtel include corporate risk manager for a global business unit and project risk manager. Linda currently works at L3 Management Innovations and draws upon her years of professional experience in this area to share with the group. 

Robert E. Scott, Jr., partner at Wilson, Elser, Moskowitz, Edelman & Dicker, LLP. Robert handles litigation on insurance coverage, drug and medical devices and many other areas.  Robert shared his expertise on crisis management and his insights on planning ahead to control future crises.

Sam Terzich, Gallagher Bassett. Sam is a current director of the company and manages specialty claims including product liability, cyber, environmental, pollution and product recall.  Sam has been in the claims industry for 25 years and will address the insurance issues that arise during a company crisis.                                                   

Marisa Trasatti, Esquire, partner at Wilson, Elser, Moskowitz, Edelman & Dicker, LLP, and also General Counsel to Sciton, Inc. Marisa is the moderator of the Top Ten Tips to Manage a Crisis. Marisa shares her unique experiences of managing a crisis as General Counsel for Sciton along with valuable lessons learned as counsel for an organization in the midst of a crisis. Marisa’s practice focuses primarily on civil litigation, with an emphasis on product liability litigation, including cases involving drugs and medical devices.  She is a past president of Maryland Defense Counsel and served as the DRI Maryland State Representative.