Monday, December 6, 2010
Thursday, November 18, 2010
The ship's famously saucy cruise director, John Heald, has just posted a lengthy, startlingly candid account of the first few minutes of the crisis on his personal blog, which is widely followed by cruise fans. . . . In an account that mixes both seriousness and Heald's trademark humor, the longtime Carnival staffer goes on to explain both the severity of the situation that he witnessed on the ship's bridge and the crew's heroic response.
Chris Gidez, head of US crisis/issues management group for Hill & Knowlton, calls the early blog post by Heald "brilliant. The first rule in crisis management is to regain control of the agenda and conversation." [Gidez] says that's especially important in a situation like this, where passengers are now starting to talk to media and no doubt will share their own detailed accounts online. "The cruise community is very engaged and active online. There will probably be video shared too, and it will likely go viral," says Gidez. "While we can expect to hear stories of long lines, no air conditioning, rude crew members, etc., there will be just as many who applaud the performance of the line."
Monday, November 8, 2010
In my last post, Monitoring Social Media, I discussed how Gatorade is monitoring social media to, among other things, protect its brand. Gatorade has constructed “Mission Control,” a social media monitoring operation staffed by four Gatorade employees 24 hours a day, seven days a week. According to an article in the Wall Street Journal that described Mission Control:
Sitting in a glassed-in converted conference room at Gatorade headquarters [in Chicago], Meg Poulelis tweets encouragement to high-school athletes before big games and taps out responses to Facebook queries such as when to use the new protein drink. . . . Whenever someone uses Twitter to say they’re drinking a Gatorade or mentions the brand on Facebook or in other social media, it pops up on a screen in Mission Control. On Saturday, the staff jumped into a Facebook conversation to correct a poster who said Gatorade has high-fructose corn syrup. . . . Aware that consumers may be wary of intrusion, Ms. Poulelis and her colleagues have to figure out when to pipe up – and when to hang back – when someone is talking about Gatorade. “If they’re directly asking where to buy products, we’re going to weigh in,” Ms. Poulelis said. “If they want to talk about working out, we let them have that conversation.”
Putting aside what some consider an intrusive practice, when the staffers at Mission Control jump into an online conversation to talk about Gatorade, they use the Gatorade logo as their avatar and identify themselves as Gatorade employees, which, of course, is the correct way to do things. Doing it the wrong way can have serious legal repercussions.
That is because in October, 2009, the Federal Trade Commission (FTC) announced that it had approved revisions to the Guides Concerning the Use of Endorsements and Testimonials in Advertising to specifically cover bloggers and social networking sites. Specifically, the FTC’s revised Guides made clear that any online posts by a blogger connected to a marketer must disclose the blogger’s connection to the marketer in such posts. Then, in late August of this year, the FTC announced a settlement with a California based public relations firm, Reverb Communications, Inc. and its owner, Tracie Snitker. The settlement resolved claims that Reverb and Snitker had engaged in “astroturfing” on behalf of its video game developer clients.
Specifically, the FTC alleged that between November 2008 and May 2009, Reverb employees posted reviews about its clients’ video games using account names that gave readers the impression that the reviews were written by disinterested consumers, not by individuals who had been hired to promote certain games. The employees “astroturfed” by consistently giving the Reverb clients’ applications four or five stars or by positively commenting on them with testimonials such as “amazing new game,” “one of the best,” and “one of the best apps just got better.”
As part of the settlement, Reverb agreed to remove any posted endorsements that misrepresented the authors of such posts as independent users or ordinary consumers, and that failed to disclose the connection between Reverb and the video game developers. The settlement also prohibited Reverb from engaging in such deceptive practices in the future.There are two interesting aspects to the Reverb matter. The first is that the FTC chose to go after the public relations firm and not the video game developers, thus establishing that the employees of a marketer’s public relations firm have the same duty of disclosure as the marketer’s own employees. Second, the FTC went after conduct that occurred before the December 1, 2009 effective date of the revised Guides, thus establishing that it has always considered “astroturfing” a deceptive practice.
Wednesday, October 20, 2010
- One out of eight couples married in the United States in 2009 met via social media
- YouTube is the second largest search engine in the world
- More video was uploaded to YouTube in the last two months of 2009 than if ABC, NBC, and CBS had been airing content 24/7/365 since 1948, the first year ABC broadcast television
- Seventy percent of eighteen to thirty-four year olds have watched television on the web
- Facebook tops Google for weekly traffic in the United States
- With 500 million users, if Facebook were a country, it would be the world's largest after China and India, numbers one and two, respectively
- 60 million status updates happen on Facebook daily
- More than 1.5 million pieces of content (web links, news stories, blog posts, notes, photos, etc.) are shared on Facebook daily
- Ashton Kutcher and Britney Spears have more Twitter followers than the combined populations of Sweden, Israel, Switzerland, Ireland, Norway, and Panama
- Eighty percent of Twitter usage is on mobile devices
- Fifty-four percent of bloggers post content or tweet daily
- Thirty-four percent of bloggers post opinions about products and brands
Gatorade staffers monitor social-media posts 24 hours a day in the glitzy hub, hoping what they see and learn will help the company more effectively promote its new G-series of drinks, which launched last spring. Whenever someone uses Twitter to say they're drinking a Gatorade or mentions the brand on Facebook or in other social media, it pops up on a screen in Mission Control. On Saturday, the staff jumped into a Facebook conversation to correct a poster who said Gatorade has high-fructose corn syrup. "It's like we're a person in their social circle now," says Chief Marketing Officer Sarah Robb O'Hagan . . .The ability to track social media conversations in real time may not sell more Gatorade, but it has tremendous potential for use in crisis communications:
[F]ew [companies] have staff monitoring blog and other posts alongside those tracking online-ad traffic, producing a consolidated picture of the brand's Internet image. Gatorade hopes such coordination will help head off potential crises like a brouhaha last year over PepsiCo's slow response to consumer complaints that an Apple iPhone application for its Amp energy drink was sexist.
Thursday, October 14, 2010
Lawyers for three defendants in a wrongful death suit stemming from the murder of Washington attorney Robert Wone have asked a judge to ban the attorneys in the case from speaking publicly about the litigation.
Tuesday, October 5, 2010
Monday, October 4, 2010
Thursday, September 23, 2010
Communicators should expect that journalists will attempt to present a 360-degree view of the story and anticipate and answer questions the media will have when writing the story. The company messages should include responses to these questions to clearly present the company position on potential issues that will arise.
Communications professionals need to be aware of who is blogging about their content and how their messages are being presented in social media in general. Reaching out to bloggers and Twitterers where appropriate can foster a dialogue that enables the company to clarify its messages for bloggers and keep the communications on target. Also, monitoring, responding to and [re]tweeting bloggers'/Twitterers' posts helps generate a dialogue and gives the company an opportunity to refine the social media message. As with mainstream journalists, anticipating and providing the information that bloggers may want to discuss, including comparisons to competitive offerings and broader issues can help a company position itself in the context that bloggers are likely to write about.
Tuesday, September 14, 2010
Friday, September 10, 2010
The restraint on speech is narrowly tailored to achieve [the State's] objectives. The regulation of attorneys' speech is limited - it applies only to speech that is substantially likely to have a materially prejudicial effect; it is neutral as to points of view, applying equally to all attorneys participating in a pending case; and it merely postpones the attorneys' comments until after the trial. While supported by the substantial state interest in preventing prejudice to an adjudicative proceeding by those who have a duty to protect its integrity, the Rule is limited on its face to preventing only speech having a substantial likelihood of materially prejudicing that proceeding.
An attorney's duties do not begin inside the courtroom door. He or she cannot ignore the practical implications of a legal proceeding for the client. Just as an attorney may recommend a plea bargain or civil settlement to avoid the adverse consequences of a possible loss after trial, so too an attorney may take reasonable steps to defend a client's reputation and reduce the adverse consequences of indictment, especially in the face of a prosecution deemed unjust or commenced with improper motives. A defense attorney may pursue lawful strategies to obtain dismissal of an indictment or reduction of charges, including an attempt to demonstrate in the court of public opinion that the client does not deserve to be tried.
(c) Notwithstanding paragraph (a), a lawyer may make a statement that a reasonable lawyer would believe is required to protect a client from the substantial undue prejudicial effect of recent publicity not initiated by the lawyer or the lawyer's client. A statement made pursuant to this paragraph shall be limited to such information as is necessary to mitigate the recent adverse publicity.
Tuesday, August 31, 2010
Pre-Trial Publicity, the First Amendment, and "The Fugitive" - Part One, Gagging the Parties and Controlling the Media
[T]he court should have made some effort to control the release of leads, information, and gossip to the press by police officers, witnesses, and the counsel for both sides. Much of the information thus disclosed was inaccurate, leading to groundless rumors and confusion. . . . Under such circumstances, the judge should have at least warned the newspapers to check the accuracy of their accounts. And it is obvious that the judge should have further sought to alleviate this problem by imposing control over the statements made to the news media by counsel, witnesses, and especially the Coroner and police officers. The prosecution repeatedly made evidence available to the news media which was never offered in the trial. Much of the "evidence" disseminated in this fashion was clearly inadmissible. The exclusion of such evidence in court is rendered meaningless when news media make it available to the public. . . . The fact that many of the prejudicial news items can be traced to the prosecution, as well as the defense, aggravates the judge's failure to take any action. . . . Effective control of these sources—concededly within the court's power—might well have prevented the divulgence of inaccurate information, rumors, and accusations that made up much of the inflammatory publicity, at least after Sheppard's indictment.
More specifically, the trial court might well have proscribed extrajudicial statements by any lawyer, party, witness, or court official which divulged prejudicial matters, such as the refusal of Sheppard to submit to interrogation or take any lie detector tests; any statement made by Sheppard to officials; the identity of prospective witnesses or their probable testimony; any belief in guilt or innocence; or like statements concerning the merits of the case. . . . Being advised of the great public interest in the case, the mass coverage of the press, and the potential prejudicial impact of publicity, the court could also have requested the appropriate city and county officials to promulgate a regulation with respect to dissemination of information about the case by their employees. In addition, reporters who wrote or broadcast prejudicial stories, could have been warned as to the impropriety of publishing material not introduced in the proceedings. . . . Had the judge, the other officers of the court, and the police placed the interest of justice first, the news media would have soon learned to be content with the task of reporting the case as it unfolded in the courtroom—not pieced together from extrajudicial statements.
Tuesday, August 24, 2010
I never took HGH or Steroids. And I did not lie to Congress. I look forward to challenging the Governments accusations, and hope people will keep an open mind until trial. I appreciate all the support I have been getting. I am happy to finally have my day in court.
There has already been extensive media coverage about the case fueled, at least in part, by the comments made by the defendant, the defendant's counsel [and] individuals who presumably will be witnesses if this case proceeds to trial . . . To issue public comments to the media that, whether intentional or not, may affect the ability of the court to empanel an impartial jury (and to maintain the jury's impartiality throughout the trial if one is empaneled) the undersigned member of the court will not tolerate such behavior from anyone."Judge Walton added that any violation of his order "will be confronted with the full authority of the Court."
Monday, August 23, 2010
The author returned to this theme later in the article in the following discussion about Toyota's public relations problems:
The company had to contend with a classic corporate quandary of balancing advice from counselors with starkly different considerations, according to people familiar with BP’s deliberations who requested anonymity because the advice was confidential. In times of crisis, communications professionals and lawyers often pursue conflicting agendas. Communications strategists are inclined to mollify public anger with expressions of concern, while lawyers warn that contrition can be construed as admissions of guilt in potentially expensive lawsuits. For BP, this tension burst into view in May, when executives went to Capitol Hill with officials from two of its contractors: Transocean, which owned the offshore rig that exploded, and Halliburton, which aided BP in drilling. Executives from the three companies each disowned culpability while pointing fingers at one another. “What that screamed is the lawyers are in control,” says Mr. Reeves. “All it did was get everybody all the more peeved at them.”
Above all, crisis management is conducted with stress and sleeplessness layered atop the usual factionalism and politics afflicting any big organization. Mr. Dezenhall, the strategist, is amused by crises as glimpsed in movies, where people sit at banks of synchronized computers, speaking calmly into headsets. “The reality is absolute chaos,” he says. “Nobody knows what the facts are. The lawyers are trying to get the P.R. consultants fired and the P.R. consultants are criticizing the lawyers. Everybody despises each other. It’s a totally unmanageable situation. A corporation in crisis is not a corporation. It is a collection of panicked individuals motivated by self-preservation.”As a lawyer and communications consultant, one of my objectives in a crisis situation is to make sure that the communications professionals and lawyers are working together instead of pursuing potentially conflicting agendas. Often this involves convincing the legal team that effective crisis management and brand preservation can work hand-in-hand with the legal strategy, while at the same time convincing the communications professionals that legitimate concerns about corporate liability must be taken into account in designing the communications strategy. The client is the ultimate beneficiary when each group of professionals gives a little rather than seeking to dominate the other.
Monday, August 9, 2010
Thursday, August 5, 2010
Wednesday, July 28, 2010
"unbalanced and often inaccurate press reports about [Stewart] created a clear risk that the prosecutors and regulator conducting the various investigations would feel public pressure to bring some kind of charges."Not surprisingly, the government subpoenaed witnesses and documents from Brunswick regarding its representation of Ms. Stewart. Brunswick employees declined to appear or provide the subpoenaed documents on the ground that the information sought by the grand jury had been generated in the course of Brunswick's engagement by Ms. Stewart's lawyers, as part of their defense of Ms. Stewart, and were therefore protected by the attorney-client privilege and constituted attorney work product.
"some of their most fundamental client functions - such as (a) advising the client of the legal risks of speaking publicly and of the likely legal impact of possible alternative expressions, (b) seeking to avoid or narrow charges brought against the client, and (c) zealously seeking acquital or vindication - would be undermined seriously if lawyers were not able to engage in frank discussions of facts and strategies with the lawyers' public relations consultants."According to the court,
"there is no practical way for such discussions to occur with the public relations consultants if the lawyers were not able to inform the consultants of at least some non-public facts, as well as the lawyers' defense tactics, free of the fear the consultants could be forced to disclose those discussions."
1) Confidential communications
2) Between lawyers, the client, and public relations consultants
3) Hired by the lawyers to assist them in dealing with the media in cases such as this one
4) That are made for the purpose of giving or receiving advice
5) Directed at handling the client's legal problemsApplying this test, the court protected all but two conversations between Ms. Stewart and Brunswick - one where Ms. Stewart asked Brunswick for its opinion of a day's particularly heavy media coverage and the second when the discussion concerned a problem with a wire service story.
Wednesday, July 21, 2010
Last week I compared the litigation websites Viacom and Google have used during their legal tussle. Litigation websites have become a key weapon in the litigation communications arsenal. Some of the traditional communication tactics, such as interviews and op-eds, involve uncontrolled media and thus are subject to the vagaries inherent in using such media. Litigation websites, however, provide the individual or company on trial with a method of reaching stakeholders directly, with unfiltered, controlled messages.
Having established herself as a trend setter in many areas, it should come as no surprise that Martha Stewart was the first person to use a personal website as a tactic in litigation communications. The day after the Justice Department filed criminal charges against her for securities fraud and lying to investigators, she launched "Martha Talks" at www.marthatalks.com, a personal website on which Stewart posted an open letter "to her friends and loyal supporters," a legal segment on the facts of the case titled "Setting the Record Straight," and links to various press articles, editorials, and consumer letters that had been supportive of her during the ImClone scandal. In the site's first day, more than 2 million hits were logged and more than 20,000 visitors took the time to send messages of "support and encouragement." In assessing the website's impact, Global PR Blog Week commented:
"Martha Talks proved the effectiveness of the Web in crisis communications. ... Martha Talks tells Stewart's side of the story. It generates support and presents her as a normal person, not the uber-perfect home heroine her shows and the media make her out to be. The site is humble, subtle and presented in a way that communicates, while Stewart maintains her innocence, that she realizes the serious nature of her legal issues. Timely trial updates, statements from Stewart's legal team and a library of different op-eds written on her behalf populate the site. It's become a news source, getting Stewart's point across without her having to field interviews."As one would expect, Martha Stewart started a trend. On March 19, 2003, the Securities and Exchange Commission sued Richard Scrushy and the company he founded, HealthSouth Corporation, for "massive accounting fraud." Seven months later, on October 28,2003, Scrushy launched www.richardmscrushy.com, which included the following statement from his attorney:
“This website fulfills two immediate needs: First, people have been asking what Richard’s side of the story is, and second, people have wondered why misinformation has not been corrected. This website gives us a medium to help set the record straight and level the playing field. No longer will the public have to be content with a single, one-sided presentation of the facts filtered through and reflecting the personal prejudices of various news reporters. Those stories will be challenged and corrected.”Michael Jackson, a trend setter in his own right, also became a follower in the use of litigation websites. Four days after his November 20, 2003 arrest on child molestation charges, he launched his website, mjnews.us, called "the official press room" to tell his side of the story. Jackson's website was relaunched on March 1, 2004 as mjjsource.com, and included more entertainment elements as well as more detail than the previous website.
Wednesday, July 14, 2010
On March 13, 2007, Viacom (the parent company of BET, Comedy Central and Paramount Pictures) filed a $1 billion lawsuit in federal court claiming that YouTube and Google, Inc. profited from the posting of thousands of unauthorized copyrighted clips. Viacom also claimed that YouTube did not do enough to keep copyrighted material off the site. On June 23, 2010, Judge Louis Stanton of the Southern District of New York granted YouTube’s motion for summary judgment against all of Viacom’s direct and secondary copyright infringement claims. Judge Stanton ruled that YouTube was entitled to the “safe harbor” protection of the Digital Millennium Copyright Act. The judge recognized Viacom’s claim that YouTube was generally aware of and even encouraged copyright-infringing material to be placed on its site, but he found that when YouTube was notified of specific infringing works, it took them down as required by the DMCA.
For three years the litigation had proceeded largely without any public comment because all of the legal documents had been filed under seal. That changed in March, 2010 when both sides agreed to make public their summary judgment motions and other related materials.
After the seal was broken, it is fascinating that the two large, content driven entities would use sharply contrasting litigation communications strategies to court public opinion. Viacom quickly launched a robust website dedicated to the litigation, and filled it with content, such as the pleadings, press releases, and Viacom’s perspective on its legal claims and YouTube’s defenses. On the other hand, YouTube’s employed a "less is more" litigation communications strategy. Its first communication of its public position appeared in a March 18, 2010 posting on its official blog, immediately after a March 17, 2010 posting inviting the submissions of questions for a James Cameron interview, and followed by a March 25, 2010 posting announcing the launch of YouTube Edu.
Even though it appeared to be buried on its website, the March 18, 2010 posting did garner media attention. This may have occurred because it was authored by YouTube’s chief counsel, Zahavah Levine, and it contained three attention getting messages: 1) that “YouTube and sites like it will cease to exist in their current form” if Viacom wins; 2) that Viacom “continuously and secretly uploaded its content to YouTube, even while publicly complaining about its presence there;” and 3) the lawsuit was motivated by sour grapes, in that before Google bought YouTube, Viacom had tried to buy it and negotiate a content-sharing agreement. Google and YouTube subsequently put up a dedicated website, which can be visited here, but it is not as user-friendly or as content rich as Viacom’s. However, the litigation was not mentioned again on YouTube’s official blog until this posting after Judge Stanton’s ruling.
Viacom has stated that it will appeal Judge Stanton's decision.
Thursday, July 8, 2010
As I have noted in previous posts, one of the goals of litigation communications is to protect the client’s image during a lawsuit. A litigation communications specialist should understand the law, the legal process, and the media in order to be able to effectively work with the client’s legal counsel and ensure that the client’s positions are presented to the general public and all key stakeholders, such as shareholders, customers, and business partners, in a way that protects the client’s image without compromising its legal positions.
The widespread use of social media has raised the stakes even higher, such that in some instances the actual outcome of a case may be insignificant when compared to the reputational damage inflicted during litigation. As a result, an increasing number of general counsels are deciding to make litigation communications part of the response to lawsuits. For example, Corporate Counsel recently reported on the legal dispute between Westwood College, Inc., a for-profit college, and some of its former students who contend that the school violated consumer protection laws. The plaintiffs were allegedly recruited through a Facebook page, Warnings About Westwood, which was started by a law firm in Tampa, Florida. The use of social media to recruit the students and to spread word of the lawsuit led Westwood College’s general counsel, William Ojile, to decide to use litigation communications to protect Westwood’s reputation. The article, which can be read in full here, offered the following explanation for why Ojile decided to use litigation communications:
“The smear tactic and the use of social media have caused us to challenge traditional norms on how you respond to the portrayal of your company when you’re in litigation,” he said. Typically he doesn’t respond in the press when asked about a suit. But in this case he not only discarded the “no comment” approach, he hired a public relations firm to reach out to reporters. “You have to show your faculty and staff and students that you’re not just out there getting pasted,” he explained. The college created a Web site that responded to the allegations and anticipated students’ questions. “How does Westwood battle this? We battle it with transparency,” Ojile said. “Every school has complaints,” he added. “I don’t care if you’re Westwood or Harvard. We try to deal with complaints as they arise.”
Wednesday, June 23, 2010
In May 2004 Grasso’s co-defendant, Kenneth Langone, pictured above, retained Jim McCarthy of CounterPoint Strategies as his communications adviser. While Starkman counseled Grasso to use a ‘non-engagement’ litigation communications strategy, McCarthy counseled a starkly contrasting ‘full-engagement’ strategy for his client. The strategy’s three components had a distinct PR flavor; improving Langone’s public image, tarnishing Attorney General Spitzer’s public image, and confronting reporters that McCarthy and Langone felt were biased, inaccurate, and in collusion with the Attorney General. In an interview with PR Week two weeks after the lawsuit was filed, McCarthy explained the strategy: “We will be very aggressive in defending Ken’s long track record of integrity. . . . We are also going to be pointing out some of the ulterior motives going on here, such as Mr. Spitzer’s political ambitions, the arbitrary way he’s put this case together, his egregious grandstanding on this. He’s flat wrong in this case. . . . [Spitzer has] relied on these bullying tactics for so long, but my practice is built on standing up to these bullies.”
McCarthy’s strategy was evident from the beginning of the litigation. On the day the lawsuit was filed, Langone issued a written statement insisting that the NYSE board’s compensation decisions were “diligent and sound” and accused Spitzer of grandstanding from “a very shaky soapbox.” Friends of Langone, such as Ross Perot (“There is no way you’d ever get Ken Langone to do anything that was purposely wrong”) and Rudolph Giuliani (“He’s a very, very honest man”) were made available to the press to vouch for Langone’s integrity.
Like Grasso, Langone also succeeded in getting an Op-Ed in the Wall Street Journal. Langone’s Op-Ed, “Let’s Bring on the Jury, Mr. Spitzer,” was a defense of Langone and a very personal attack on Spitzer: “Reasonable observers are far more likely to see through the political cynicism of Mr. Spitzer and his cheerleaders. This is a man, after all, who sent out photos of himself wielding a flaming baseball bat, asking people to pony up $100,000 apiece for his political bank account. . . . There appears to be an idea that a court fight – that is to say, a public fight – would be unseemly. But the vulgarity lies with an attorney general who believes he can bend honest men to disgrace their own hard work.”
Shortly after the Op-Ed ran, McCarthy said that Langone would be doing more outreach “fairly soon,” which would include media interviews. However, Langone did more than give interviews; he gave speeches, such as one before the Cato Institute where he asserted “I believe business leaders have a responsibility to take [Spitzer] on, not for personal reason, but for civic responsibility,” and openly raised money for Spitzer’s political opponents. Unlike Grasso, there does not appear to be any point during the litigation where Langone went “radio silent.” Not surprisingly, it did get personal between Langone and Spitzer. For example, Langone accused Spitzer of sending a message to him through an intermediary, Jack Welch, the former head of GE, that Spitzer “would drive a stake through his heart.” Spitzer denied using those exact words, and said in an interview that what he said to Welch was: ''Ken's kind of like a vampire -- you kind of have to put a stake through his heart to stop him.''
Although their litigation communications strategies were very different, the advisors for Grasso and Langone both achieved the goal of protecting their clients’ public images. After the litigation ended, the Wall Street Journal published an editorial entitled “Langone’s Heart” - a sly reference to the organ Spitzer wanted to put a stake through. The Journal opined: “This week’s dismissal of the case against Dick Grasso is sweet vindication for the former New York Stock Exchange CEO. But beyond the debate over his $190 million pay package, there are lessons here about prosecutorial discretion, pack journalism and business courage under political pressure. These columns defended Mr. Grasso from the beginning, not because we cared a whit about his pay but because it looked like one more case of overreach by Lord High Executioner Eliot Spitzer. . . . Mr. Grasso is fortunate he had the resources to fight back. He’s also fortunate he had an ally in Kenneth Langone… . Mr. Spitzer no doubt figured the pair would settle under his publicity barrage, but Mr. Langone had the guts to defend himself and the principles at stake.”
Thursday, June 17, 2010
( This is the fifth of six posts examining the litigation communications strategies in the lawsuit challenging the $139.5 million paid by the New York Stock Exchange to its CEO, Richard Grasso, shortly before the NYSE Board asked for his resignation. The four previous posts can be found here, here, here, and here.)
Shortly after the New York Stock Exchange Board asked for his resignation, Richard Grasso, pictured above, retained the services of Erik Starkman, president of Starkman & Associates and a former financial journalist, as his communications professional to help him deal with the media frenzy his termination caused. Grasso's co-defendant, Kenneth Langone, retained Jim McCarthy of CounterPoint Strategies as his communications adviser. Starkman and McCarthy pursued starkly contrasting styles of communications counsel in guiding their clients through the litigation.
The Starkman/Grasso Strategy - Litigation Communications Is Not Public Relations
For his legal representative, Grasso retained Brendan Sullivan of Williams & Connolly, a lawyer most known to the public for his representation of Oliver North in the Iran-contra affair. The collaboration between Starkman and Grasso’s legal team highlights one of the subtle differences between public relations and litigation communications. Public relations focuses on improving the client’s general image. Litigation communications, on the other hand, is designed to protect the client’s image by providing the context and clarity needed to give the general public a common sense understanding of the client’s legal position, and to articulate the position in a way that supports the client in the public eye without compromising legal arguments. In this particular instance, Starkman’s advice to Grasso was that actively engaging the media was not the best communications strategy. As Grasso explained in his PRWeek interview: “I had the good judgment of Eric Starkman saying there’s no way in the current environment that you’re going to effectively counterpunch. There [was] no need to try and parry in the press.” Instead, Starkman devised a ‘non-engagement’ communications strategy that had three components. The first component involved monitoring the media. As Grasso related in his interview: “Eric and I spoke multiple times each day for the better part of a year and a half. His team at Starkman & Associates covered the landscape of media through their use of electronic monitoring. I knew every morning exactly what was being said about me, where it was being said, and he didn’t just give me an abridged version of stories appearing in the US and around the world. He gave me a strategic understanding of why, for the most part, we weren’t going to respond. And if we were going to respond, how we would. He was more than just an aggregator of news services.”
The second component involved providing background to reporters, but not granting any on-the-record interviews, something Grasso admitted he found frustrating: “Given the environment that my lawsuit was wrapped in – we were in the middle of the period of Adelphia, Enron, Tyco – I got swept up in that current. It’s very easy for me, as a principal, to believe if you can sit down with a reporter, you’re going to change someone’s perspective. Eric was [the] best objective source to remind me that you couldn’t do that. It was a very difficult period.” Starkman, who also participated in the PRWeek interview, added: “A lot of what I did was behind the scenes with reporters. As a courtesy, every major news outlet made their cases about why they should get an interview with Dick Grasso. I heard them out, set them straight about where they were going wrong, but [at] the end of the day, it didn’t make any sense to grant on-the-record interviews.”
After Attorney General Spitzer filed the lawsuit, the third component of the strategy was to issue a response in a way that allowed Grasso and his team to control the message. The message Grasso wanted to communicate was aimed not so much at the general public as it was at the Attorney General. Spitzer was perceived as an adversary who used the weight and resources of the attorney general’s office, along with a compliant press, to bully his targets into settling. The message Grasso wanted to deliver was that he was prepared to fight the lawsuit and that settlement was not an option: “The message was a very simple one: I was firmly of the belief that my vindication would come in the courtroom when all the facts were laid out objectively for an unbiased audience to evaluate … [m]y belief from the start … was if I were to settle, it would be an admission that I did something wrong. I hadn’t and therefore settlement was not an option.”
The editors of the Wall Street Journal were willing to provide Grasso with a vehicle for him to deliver his message, an Op-Ed to run the day after the lawsuit was filed. Starkman explained that after the lawsuit was filed, “Every major business outlet wanted to speak to Dick, and we decided as a team that there was no point in making him available. The bias and support of Mr. Spitzer were so overwhelming. Our logic with the Op-Ed was we wanted Dick’s message to be delivered in his own words and in his own way. We negotiated with the Journal that we would do the Op-Ed but there were certain conditions: that they wouldn’t share it with their own newsroom. They agreed. The next day’s stories were all based on the Op-Ed, but people who really cared would just go to the Op-Ed.”
The Op-Ed, "My Vindication Will Come in a Courtroom", which you can read here, was written by Grasso, Starkman, and the lawyers at Williams & Connolly. In it, Grasso tied the lawsuit to Attorney General Spitzer’s gubernatorial ambitions and defended his compensation and the methods used to decide how much he was to be paid. Grasso believed the Op-Ed was very effective: “It was extremely effective in communicating without any ambiguity that this was not going to be a lawsuit I was prepared to settle. The Journal, to its credit, allowed my piece to run as the collaborators wrote it.” Starkman added that the Op-Ed worked because of their decision not to grant interviews: “Had Dick given media interviews, the Op-Ed wouldn’t have had the same value or impact. That was the first public comment that he made since Mr. Spitzer brought the charges. If he had given interviews and all his positions were known, the impact would have been severely diminished and The Journal may not have even wanted it.”
Even though the litigation continued until July, 2008, Grasso and Starkman’s working relationship ended in 2005. Explained Grasso: “Beginning in June 2005, we were getting to the phase of the litigation where the lawyers felt it essential to go on radio silence. . . . As much as I value the media, you’re not going to be tried in the court of public opinion. You’re going to be tried in the courtroom. That’s when you have to listen to the lawyers who say it’s time to go radio silent.” Even though Starkman's representation of Grasso ended before the lawsuit, Grasso found Starkman’s services as important as Williams & Connolly’s: “From the client standpoint, in the issues that were embedded in my litigation, the beauty of a top-flight professional communications strategist is that he’s a partner to the process. He doesn’t practice law and the lawyers don’t practice communications. They compliment and work with each other. And collectively, the two disciplines are responsible for managing the client’s best interests.”
Next: The McCarthy/Langone Strategy