Arthur Andersen: A Cautionary Tale

No matter how diligent and scrupulous your "disaster recovery" plans may be from the perspective of IT business-continuity and "hot" off-site locations, have you ever considered another type of disaster and the recovery that is required?  That is, a disaster not to a major downtown, but to your firm's reputation?  As Arthur Andersen taught us—lest there was doubt before—the reputation of a sophisticated professional service firm can be destroyed overnight, with fatal consequences.

Surely, you protest, nothing of like magnitude could befall a firm that trades on its reputation every day, and knows it.  Beware, however, that what we illustrious cognoscenti of the bar view as sophisticated or aggressive advocacy can be seen in an utterly different light by the public—including those in a position to apply pressure to your clients.  Perhaps the most shocking aspect of the depressing, despicable, and dishonorable Abu Ghraib prisoner-abuse scandal, after all, was not that some soldiers went haywire, but that Justice Department lawyers argued torture was legal. 

Should you, then, have a contingency plan in place should the equivalent of Tylenol or Bhopal hit your firm?  Yes:  But make it more of a contingency "structure."  That is, know in advance:

• who speaks for the firm;
• ensure that it's the right combination of astute and media-savvy lawyers, and communications experts;
• who can deliver a pithy and, above all, believable message ("we did nothing wrong" rang a bit hollow for Andersen as clients such as Delta Airlines were deserting);
• like a political candidate, stay "on message"—more strongly, take any challenge as an invitation to reiterate the message.

Sound anti-intellectual?  Sound manipulative?  Sound superficial and transparent?  Welcome to 21st-Century media:  They're not going to play by decorous rules. 

Here's more on the topic.  The bottom line is that the hardest part is that lawyers in a personal business crisis will instinctively clam up when it feels as though there's nothing good to say. But you must play against type: A charge unrebutted is a charge deemed admitted.