In Court of Public Opinion, Companies Guilty Until Proven Innocent
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In Court of Public Opinion, Companies Guilty Until Proven Innocent

General counsels at major corporations believe overwhelmingly that corporations are considered “guilty until proven innocent” in today’s regulatory and litigation environment, according to the results of a new study.

Holmes Report

General counsels at major corporations believe overwhelmingly that corporations are considered “guilty until proven innocent” in today’s regulatory and litigation environment, according to the results of a new study sponsored by Hill & Knowlton and executed by its sister company, research firm Penn Schoen & Berland Associates.

More than three-quarters (76 percent) of counsel surveyed agreed that media coverage of alleged corporate wrongdoing over the last five years has made it substantially harder for corporations to secure a fair and impartial jury.

“Try it in the courtroom or try it on TV,” said Harlan Loeb, director of Hill & Knowlton’s U.S. litigation services specialty. “More than ever, companies must engage in strategic communications planning when high-stakes litigation looms. A coordinated communications strategy that articulately lays out a company’s legal position to non-legal audiences is crucial to preserving corporate reputation and business goals.”

In high-profile or high-stakes litigation, the hearts and minds of the American public are sometimes considered the “extra juror” and the role of general counsel is increasingly expanding to include active participation in the battle waged beyond the courtroom in the court of public opinion. Ninety percent of general counsels agree or strongly agree that engaging in a strategy that helps protect a firm’s corporate reputation in the court of public opinion is a priority for them.

Attention to public opinion is particularly critical to a company facing litigation as it can substantially impact settlement amounts, jury and regulatory decisions and even a company’s ability to achieve larger business objectives.

Twenty-six percent of survey respondents reported that public opinion increases dollar amounts in damage awards or settlements by 10 to 20 percent in high-profile or high-stakes corporate litigation, 14 percent said they saw increases of 20-30 percent, and sixteen percent (16 percent) asserted that public opinion increases awards or settlements by thirty percent (30 percent) or more.

Yet, while the majority of those surveyed agreed that public opinion has a substantial influence on litigation, general counsel do not see themselves as prominent members of the communications strategy effort. In fact, when asked which groups concern general counsel the most when they are engaged in high-profile or high-stakes litigation, more respondents cited non-party regulators or government bodies (36 percent) and industry analysts (26 percent) than the media (16 percent).

“The disconnect between the importance general counsel place on the ‘extra juror’ on the one hand and the lack of primary involvement of the general counsel in the strategic communications process poses a clear and present danger for a company engaged in high-stakes litigation,” said Loeb. “Like never before, litigation lures the watchful eyes of a variety of critical stakeholders including shareholders, industry analysts, customers, employees, and regulators.

“Corporate counsel and corporate communications share the responsibility to respond with strategic transparency and an integrated approach to communications.”

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