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Crisis? What crisis?

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Cite as: (2003) 77(4) LIJ, p.24

A session at this month’s 13th Commonwealth Law Conference will examine the best ways to keep a cool head in a crisis.

With the pace of business speeding up and corporations becoming more accountable in the wake of the corporate collapses of HIH and Enron, many lawyers face the increasing likelihood of having to deal with a corporate crisis at some stage in their career.

Crisis management is a test of a lawyer’s skill. It tends to raise varied issues, requiring judgments that cross from the purely legal to technical, commercial and strategic.

In a crisis there is generally little time to prepare or research and advice is frequently given in a “pressure cooker” environment, generally with limited facts.

Managing a crisis will be the focus of a hypothetical at this month’s 13th Commonwealth Law Conference in Melbourne.

The session, titled “The Emperor’s New Suit – A Hypothetical”, will be chaired by Smorgon Steel general counsel and LIV Council member Kirsten Mander. It includes a wide range of legal and non-legal participants, including Qest Consulting Group chairman Tony Pooley and TABCORP’s general manager of corporate affairs Tricia Wunsch. Michael Brindle QC, chair of the UK Commercial Bar Association, will moderate the session which will take place on Tuesday, 15 April at 4pm.

Ms Mander said the session would provide invaluable advice to attendees.

“It’s an enormously difficult area because you have legal issues colliding with other concerns, such as media, government, other businesses and community demands. Everyone has expectations which collide at a crisis point. You can’t learn about how to deal with a crisis out of a book and it’s too late to start thinking about it when you’re in the middle of it. You need to learn from those who have actually been there.”

Mr Pooley, whose company provides advice, planning and training in crisis management to companies such as BHP, Shell and Mobil, stressed the importance of being prepared.

He said that his work in crisis management had shown the difference in attitude between lawyers and other professionals. “Media people, for example, often come in to our exercises with draft media statements for various scenarios. But I’ve never seen any of the legal advisers ever come in with the logic charts, generic categories or the like. The attitude seems to be, ‘I will listen to what happens and make a judgment at the time’,” he said.

Mr Pooley said the key to crisis management was to outline a framework of solutions to various possible crises, be prepared to deal with unforeseeable outcomes and tailor advice to suit. “It is important to recognise the difference between likelihood and consequence.

“Many decisions are made on the basis of the likelihood of an event occurring, but in a crisis management situation it’s extremely important to also understand the possible severe or unacceptable consequences of situations or decisions, even if they are less likely.

“A decision or action with the risk of unacceptable consequences should not be taken, even if the likelihood is low. It’s funny how many people in these situations don’t treat it like it’s their own money.”

Ms Wunsch, who has 16 years experience in corporate affairs, including reputation management and crisis communications, also highlighted the importance of addressing community demands for transparency.

“Tell the public, via the media, as a top priority. Do it even before you have all the answers – as hard as this can be for lawyers, particularly – and do it often.”

The hypothetical is one of many sessions in the Commerce and Corporations Law stream. Other sessions cover issues such as corporate conduct and ethics, international business, protecting intellectual property rights and regulation of competition.

About 2000 delegates from around Australia and the world are expected to attend the conference. Other issues to be discussed at the conference include women and the law, HIV/AIDS, the law and judicial ethics, and jurisdictional issues arising from international e-commerce and publications on the Internet.

The brochure and registration form are available at http://clc.efirst.com.au.

Jason Silverii

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