Biglaw, Media and Journalism

6 Tips For Law Firm Crisis Management

How should you react when your law firm turns into a sinking ship?

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The ship be sinking (photo by Reinhard Jahn via Wikimedia)

The ship be sinking. (Reinhard Jahn/Wikimedia)

How should we respond when our law firm ship starts sinking? Dewey know the best practices? Howrey going to survive?

Many people simply… panic! But that’s not very productive.

Earlier this month, I attended (and — disclosure — spoke at) the continuing marketing education conference of the Legal Marketing Association’s Los Angeles chapter. It was an excellent event, and I enjoyed and learned from the other speakers. One of the most interesting presentations came from Nancy G. Newman, who served as national director of marketing and business development at Dreier LLP when Marc Dreier’s infamous Ponzi scheme unraveled. (If you’re not familiar with the tale, which we covered extensively on Above the Law at the time, watch this short trailer for a documentary about Dreier’s downfall.)

Newman offered a fascinating, behind-the-scenes account of the Dreier saga from the other side — and offered wise advice on law firm crisis management, which I’ve distilled into these tips.

1. Keep calm and carry on.

Take yourself back to December 2008. The financial markets were crashing. Nancy Newman was boarding a plane at LAX to fly out to New York for the Dreier holiday party. Her cellphone rang literally as she was boarding the plane. It was a Dreier partner based in Santa Monica (the office that Newman worked out of). The partner asked her — never a good sign — “Are you sitting?”

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The partner informed her that Marc Dreier — founding partner of Dreier, and the only equity partner in the firm, as some of you may recall — just got arrested in Canada. The partner told her she needed to go back to the office. She called her husband and asked him to pick her up at the airport and take her back to the office.

At the office, she discussed the situation with two of the partners, and they soon realized she needed to be back in New York — where the real crisis was unfolding. So she summoned her ever-patient husband and asked him to take her back to LAX.

As she got ready to take off for New York (again), she checked her phone. It was a voicemail from a legal journalist seeking comment on Marc Dreier’s arrest. And then, right after she heard the message, the pilot directed the passengers to shut down all mobile devices.

Newman had six hours, without phone or email access, to think about how to handle the situation. She said it was a welcome respite from the chaos.

2. Honesty is the best policy.

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When she arrived in New York, she learned more about the situation. Millions of dollars were missing from client escrow accounts. Dreier had been arrested in Canada for fraud and impersonation. Media outlets — including but not limited to Above the Law — were circling. Newman and the partners needed to come up with a response.

They decided, first of all, to cancel the holiday party. That was obviously the right call — especially when it turned out that CNBC was waiting with cameras at the Waldorf-Astoria, hoping to get footage of Dreier lawyers partying while their firm fell apart.

In the email sent to the entire firm about the cancellation of the party, they decided to be honest and inform employees of Marc Dreier’s arrest. There was some talk of being euphemistic — e.g., March has been “detained” abroad — but that was quickly overruled.

“Don’t sugarcoat,” Newman advised. “Your employees are your first line of defense” in a crisis — and they appreciate the truth.

3. Get all the help you can get.

During the chaotic hours after Marc Dreier’s arrest, there was some confusion over who was in charge and who should be handling what. Needless to say, this was… suboptimal.

Newman told the conference attendees: line up a crisis team before crisis strikes. Figure out who is on it, both internal and external — yes, external. If you can, you should retain an outside PR firm to be available to you in crisis situations. When a real crisis strikes, the amount of work to be done can be overwhelming. And it can help to have an outsider to view the situation more objectively as well.

4. Remember: it’s not personal.

When you start getting hounded — by angry or anxious colleagues, by journalists hungry for a scoop, by vendors wondering if they’re going to get paid — remember that it’s not personal. It’s not about you, and it’s not about “you versus them.” It’s just a complicated, perhaps unfortunate situation that everyone is trying to navigate, each in their own way.

You’re being paid to be calm and professional. That’s your job — so do it.

“Strengthen your spiritual muscles,” Newman recommended. To quote the old antiperspirant commercial, “Never let them see you sweat.”

Need to vent? That’s what your family and friends are for. When in the office or when dealing with professional contacts, remain unruffled (see tip #1 above).

5. Try meditation. Consider getting a pet.

Everyone’s different, but meditation and pets help some people make it through troubled times. (For more on meditation for lawyers and legal professionals, see ATL columnist Jeena Cho, here and here.)

6. Embrace the crisis — you will learn from it.

This is admittedly easier said than done. But you will get through this — and you’ll be stronger when it’s over.

Newman urged everyone to remember: this crisis experience does not define you. So don’t hide. Circulate, put yourself out there, and hold your head up high when you do.

Surround yourself with supportive people in tough times. And don’t forget to thank them when it’s all over.

You will survive, and even thrive — just as Nancy Newman did. After Dreier’s demise, she worked at a great law firm, Robins Kaplan, for six years. She now has her own firm offering marketing, business development, and communications advice — advice that’s informed, of course, by her own experience in the trenches of crisis management.

Ideas In Motion [Legal Marketing Association of Los Angeles]

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