Richard Levick

Many corporate attorneys are used to driving the bus when it comes to crunch time and making executive decisions. It’s a natural reflex built on decades of awareness that legal risks are paramount.

Considering the immense challenges facing global brands in the Internet Age, however, it is long past time to reevaluate risk. Legal counsel needs to think about sharing that steering wheel. 

In an era fraught with uncertainty, the job of general counsel continues to take on new and unchartered dimensions. To operate effectively in today’s environment, the legal counsel responsible for crisis management need to comprehend what may lurk behind social efforts and distinguish the difference between a solitary angry tweet and the preliminary stirrings of a full-blown campaign. Understanding the motivations of adversaries needs to drive an institution’s strategy, not the dictums of past playbooks.

Unlike a decade ago when corporate advertising and carefully distributed messages largely drove the public conversation, today it emanates from the grassroots and is seldom controlled. But it can be anticipated. The canary in the coal mine is your ally. From EpiPen to Wells Fargo, the Keystone Pipeline to fracking, there are always early warning signs of trouble ahead, but executives have to think differently and know where to look.

While diving deeply into enterprise risk is something best done on a company-by-company basis, there are certain general trends that demand fresh thinking: 

 > The Cybersecurity Threat. Yahoo! Target. Anthem. Subway. It’s Murderers’ Row of corporate cyber hacking, with more victims ahead, including you. Cyber risk is now a when, not if proposition. That’s why cyber crime should be top of mind for legal counsel. It’s not just that the cost of data breaches will climb past $2.1 trillion globally by 2019, it’s that the risks are about to change. Very shortly it will not be only information that is compromised but tangible value, health, and life as hospital systems and health care services are breached and the inevitable blackmail takes root. The age of free credit reporting is already coming to an end as the salve to a cyber wound. Consumers are already increasingly demanding more tangible responses by companies. Why wait to become the posterchild for antiquated prophylactic and response? Now is the time to test your cyber defense, ensure it is constantly retested, and develop new response protocols. Sadly, there is going to be a company this year that will face earth-shattering losses due to a response that was oh-so-2016.

> The Unpredictable Presidency. The apparent absence of the post-election economic bump that traditionally occurs at this time is not the only thing absent from this historic presidency. Uncertainly, the bane of every market, is the new norm. Companies now face a new threat from Washington which is neither regulatory nor taxation, but imperial. Whether it is a Trump tweet or being called out from the Oval Office, these times call for four strategies to drive preparation.

  1. For companies that sell to the government, the strategy is the same as it was on November 8. If the President calls you out in a tweet, genuflect and give him the victory lap. You have one customer and keeping him satisfied is what drives your strategy. But run silent and run deep as long as you can; there is little perceived benefit in hugging him too closely.
  1. For everyone else, know your customers as voters, not just consumers. For Starbucks and Kellogg’s, the pro-Trump boycotts have not materialized; the social media sharing has been relatively tepid. Nordstrom’s, with its meteoric 7 percent increase in share value and 28 percent increase in web visits since the President blasted them in Twitter, eliminates for the time being presidential tweets as an enterprise risk.
  1. During peacetime, integrate your teams—and make them understand they’ve got to share the wheel, too. As in no time in history, IR and legal need to understand public affairs, government relations, and grassroots movements. Get everyone reading Saul Alinsky’s “Rules for Radicals,” The Washington Post and The New York Times, which are producing some of the best content on what’s happening and what’s likely to happen next. Get your PA/GR folks talking to IR, PR, brand, etc., so that you cast a wider net as you develop strategy. 
  1. Beware the wrath of social media by taking steps to inoculate yourself. Corporate attacks via social media are taking a severe toll on brands. Losses linked to reputational damage at publicly traded companies have increased 461 percent during the past five years, according to new research conducted by Steel City Re and Hanover Stone Partners. Anger among the general public and the weaponization of social media were cited as the top culprits.

 With all of these potential threats swirling around the company, it behooves legal counsel to move past the siloed approach which is not only antiquated but dangerous in a digital world.

Enterprise risk is multifaceted. Solutions needs to be as well. Smart companies need to make that bus driver’s seat wider.


Richard Levick, Esq., @richardlevick, is Chairman and CEO of LEVICK, a global communications and public affairs agency specializing in risk, crisis and reputation management. He is a frequent commentator on television, radio, online and print.