Wednesday, June 23, 2010

Litigation Communications in People v. Grasso - The McCarthy/Langone Communications Strategy

(This is the last 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 five previous posts can be found here, here, here, here, and here.)

The McCarthy/Langone Strategy– Litigation Communications Is Public Relations

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

Litigation Communications in People v. Grasso - The Starkman/Grasso Communications Strategy

( 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

Wednesday, June 9, 2010

A Litigation Communications Strategy Gone Awry?

By now I suspect that you have become aware of the saga of Debrahlee Lorenzana, the JPMorgan Chase banker who has filed a discrimination claim against her former employer, Citigroup. The media blitz began with a June 1, 2010 Village Voice article and in less than a week included columns by opinion makers such as Maureen Dowd and appearances on the morning news shows. In her lawsuit, Ms. Lorenzana claims that she was unlawfully terminated from her position at Citigroup because her attractiveness and attire were considered too distracting to her fellow employees. The case is headed to arbitration soon, and anyone who believes that this burst of publicity concerning a claim filed in November 2009 is serendipitous has not been reading this blog. This media flurry has all the earmarks of an orchestrated campaign by her media savvy lawyers to court public opinion in order to "soften-up" Citigroup for the arbitration, and perhaps persuade it settle prior to arbitration. It is a frequently employed tactic.

There are, of course, dangers in pursuing this strategy when your client has appeared in "Plastic Surgery New York Style" on the Discovery Health Channel, which chronicled her multiple cosmetic procedures so that she could achieve her goal of being "t*** on a stick." The above picture is a screen grab from the show, at the point where Ms. Lorenzana is in a grocery store with two of her friends using various fruits and vegetables to show them what she wants to achieve with her next cosmetic procedure. The complete segment can be seen here.

This is not a problem for Ms. Lorenzana's legal claim. Having had cosmetic surgery in no way negates Ms. Lorenzana's claim against Citigroup, and her attractiveness was not a justification for discrimination. It has, however, caused the media that Ms. Lorenzana's lawyers have been courting, and which seemed very sympathetic, to turn on her and begin to question many of the statements she made during her media tour, such as that her attractiveness is a product of her genes; that her attractiveness has been a lifelong problem; and that she would "definitely" want to be less attractive to avoid the problems her attractiveness has caused. It also may have the opposite effect the lawyers intended, by firming Citigroup's resolve to continue with the arbitration.

UPDATE (6/14/2010): American Banking & Market News is reporting that Ms. Lorenzana has retained new legal counsel, Robert Wolf.

UPDATE (6/15/2010): The New York Post is reporting that Ms. Lorenzana has retained California based attorney Gloria Allred and New York based attorney Mariann Meier Wang.

Monday, June 7, 2010

Handling the "Ambush" Interview

Corporate Counsel recently posted a story, along with video, of a lawyer trapped in his office by a reporter and camera crew hot on a story:

'I Can't': TV Reporter Forces In-House Counsel to Tap Dance on Air

It's every corporate counsel's worst nightmare: Being forced to tap dance, dodging questions from a pushy TV news reporter on air. "I can't give you a legal opinion," a huffy Huron County, Mich., corporation counsel Stephen Allen tells WNEM reporter Randy Wimbley, who's firmly wedged in the doorway of his office. Wimbley peppers Allen with tough questions for a WNEM story on a controversy over local officials profitting [sic] from putting wind turbines on county property. And somehow, Allen doesn't cut the interview short, but allows it to continue until Wimbley is literally reading the definition of "conflict of interest" to him out of a Michigan zoning and planning guide book. "Sir, what part of 'I'm not going to give you legal advice' don't you understand?" a peeved Allen fires back at him.

Click here to watch the video from

Many lawyers, particularly litigators, feel that if they can handle a hostile adversary, witness or judge, they can handle a hostile reporter. However, an interview by a reporter is not the same as an appearance in court. There are rules that apply in a courtroom, along with a judge to referee and enforce the rules. The rules governing the conduct of a news interview, to the extent that they exist, are not always clear and well known, there is no referee, and a lawyer lacking knowledge on how journalists gather news can be at a disadvantage.

I shared the video with my colleague Sallie Gaines, a senior vice-president of media relations for Hill & Knowlton. Sallie is well known in Chicago as a former business reporter for the Chicago Tribune, and is knowledgeable about the rules of journalism. Sallie is often called upon to conduct media training of Hill & Knowlton clients.Sallie shared the following tips with me on how a lawyer should handle the “ambush” interview:

Rule One is to not allow yourself to be ambushed. You should know that, when an issue is likely to be controversial, the media will come knocking. HAVE YOUR MESSAGE READY, and you decide when/where to deliver that message.

Mr. Allen should have expected these questions to arise and had his response prepared. Then, when he opens his office door to discover the “ambush,” he should have politely said he would love the chance to sit down with the reporter and wished he had known the reporter was coming. He is rushing to a meeting. Can the reporter meet with him in 15 minutes? Smile. Have the reporter –and camera—taken to a neutral place (probably a conference room, or have them wait in the lobby) while Mr. Allen collects his thoughts and reviews his messaging, and goes for a quick interview on HIS terms.

Remember: The public dislikes and distrusts the media as much as they distrust politicians and government bureaucrats. If you do not react like a guilty person, but rather a cooperative person wanting to talk about this important issue – but not at this exact second—the viewers will be on your side (as long as you do follow up quickly and give that interview).

If the topic is one that you absolutely MAY NOT discuss in any fashion for legal reasons, you need not be defensive or embarrassed about saying that. You need not look defensive. You simply look straight at the reporter and in your calmest, most professional voice say, “I would like to discuss that with you and explain it to your viewers. But you need to understand that Judge Jones has imposed a strict gag order in this case, and I am barred from doing so. All I can do is strongly urge you to attend the trial each day.” Or “I would like to discuss that with you and explain it to your viewers, but you need to know that my client has signed a nondisclosure agreement and he—and I –would be breaking the law by doing so.”

If you cannot respond, is there something you CAN legally or ethically say? If so, add, “What I can tell you is that ….”

A few other tips:

Never repeat the negative language in the reporter’s question. Instead of “my client is not guilty of conflict of interest” say, “Oh, I strongly disagree with that. My client has clearly disclosed…”

Don’t look frightened or angry. That looks like guilt in the eyes of the viewer. Look calmly at the reporter and keep your professional composure.

If you are accosted on your way into the office—e.g. in the parking lot—look the reporter in the eye, smile, shake his/her hand and KEEP WALKING. Say, “Sure, I’d be pleased to talk to you, but let’s not clog up the street. Won’t you and your camera crew please come into the office so we can have a conversation without distraction.” Smile and keep walking. Nobody can accuse you of dodging the question. The reporter and camera crew will follow, but not be able to do anything. If they have to go through security in your building lobby, great. Go ahead, and tell them to come up to Floor X. Get on your cell, call up and get a conference room. All of this delay gives YOU time to pull together your thoughts and clarify what you want to say. Have receptionist/admin show reporter/camera crew to the conference room. You don’t have to be standing there to greet them. Take the time to pull together your thoughts. Make a call to your client or colleague if necessary to get more information or clarify what you should say.

You say how long you have. “Thank you for coming up. I have 10 minutes before my next meeting. Can you repeat the question please?