Top Ten Tips on How to Manage a Crisis

First Step: Determine What Activates the Crisis Management Plan

This week we will be discussing the first of ten tips on how to manage a crisis.  Materials and content for this article were provided as part of the MSBA Legal Summit Series, “Top Ten Tips on How to Manage a Crisis” and moderated by Marisa Trasatti, Esquire, partner at Wilson, Elser, Moskowitz, Edelman & Dicker, LLP.  

Crises come in many forms.  The panelists discussed the billions of dollars weather and climate disasters cost businesses annually including wildfires, drought, tornadoes, hail storms and hurricanes. Risks can also be in the form of product recalls, food-borne illnesses, toxic torts, and health hazards, pollution-related issues, cyber security issues, ransomware, building collapses, and regulatory violations. The key is to recognize that the unexpected can happen along with the derivative and inevitable lawsuits.  

The top ten tips on how to manage a crisis were identified by the panel of crisis experts:

• Determine What Activates 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

First Step – Determine What Activates the Crisis Management Plan (Before the Crisis)

Have a management plan before the crisis!  The panelists strongly emphasized that it is imperative to have a crisis management plan in place when a crisis hits so that your organization is not reinventing the wheel when a crisis arrives.  Your company should clearly identify the types of crises that activate the plan.  For example, some crises are major, some are limited in scope and others are issue-driven. Define the type of emergency response that is proportional and tailored to the unique crisis.  Identifying the crisis levels as Level 1 (low level), level 2, and level 3 also helps articulate the appropriate response.  The most important key is to be ready when it happens.

The plan should also provide for and define the crisis management team and what role each person plays in the crisis.  The crisis management team’s authority to shut down communication until the key points of the crisis are identified, deliberated, and agreed upon by the team should be articulated in the plan.  

Other key components the panelists identified that should be included in the crisis management plan include emergency response, disaster recovery, and business continuity with appropriate crisis levels identified.

Plan, plan, plan

It is vital to plan for the unexpected.  Robert Scott, partner at Wilson Elser and one of the key panelists, emphasized that you may have the best-laid plans, but the circumstances that unfold during the crisis will ultimately dictate what you do. He also emphasized that the appropriate response to the crisis will be based upon the circumstances and may not be what the crisis plan provides.  It is important to be nimble enough to make sure the appropriate response is implemented.  All the panelists agreed that the vetting of various alternatives pre-crisis is critical.

Summary: Pre-crisis planning is vital.  Develop a crisis management plan now with defined goals and strategy, but be flexible enough to adjust the crisis management plan according to the unique circumstances of each crisis.   To listen to the experts discuss this important first tip of the Top Ten Tips to Manage a Crisis watch the video below:  

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This is the third 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 crisis when it comes knocking.  Last week, the MSBA discussed the 7 Myths of a Crisis.  Next week, the MSBA will discuss the second of ten tips to manage a crisis with comprehensive suggestions and actions for implementation.  The immediate next eight weeks will address, individually, the other eight tips to manage a 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.  The MSBA wishes to express sincere gratitude to the professional panelists, without whom it would not be possible to offer this series.

Join us in the coming weeks as we continue to cover in detail the Ten Steps in Managing a Crisis.  

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.