Legal

Monday, July 13, 2009

Imagine a web without links

Repent, all ye sinners. The end of the Web is nigh.

Well, okay, that may be a bit extreme. But when you consider that links are the Web’s foundation, a disturbing trend doesn’t bode well at all.

Consider these two news items:

• U.S. appeals court judge Richard Posner wrote last month that expanding copyright law to bar online access to copyrighted material, or to bar linking to copyrighted materials, without the copyright holder’s consent, may be necessary to keep a viafble newspaper industry alive.
• The UK’s Newspaper Licensing Agency (NLA) is pursuing a plan that would require payments from anyone linking to their member newspapers’ online content. In fact, PR agencies would be charged for emailing a link to a client!

Both of these stories (which, by the way, Neville Hobson and I covered in today’s episode of today’s FIR) are worthy of commentary, but I’m more concerned about their collective impact. As more and more organizations seek ways to stop others from linking to their sites, or force payment in exchange, the value of the Web could decline precipitously.

This is serious. You can’t shrug it off by wondering how anybody could be so stupid as to want to reduce traffic to their own sites. Clearly, protection of copyright is a higher priority to some organizations than traffic.

I used to get this question from clients all the time, back in the early days of the Web. “Do I need to get permission to link to content?” I did my reseach, even asked lawyers, before I answered. Case law up to that point said that any content you put on the Web is subject to linking. From a linking standpoint, every page is equal; every page is the equivalent of a home page. If you don’t want someone to link to it, don’t put it on the Web or, at the very least, password-protect it.

As for the notion that copyright was violated by linking to copyrighted content, the courts—with a few narrow exceptions—found that links were not violations. After all, the content resides on the copyright holder’s server. All you’re doing is pointing people to that content.

What if all cases brought to court wound up like these two:

• A decade ago, U.S. District Judge Tena Campbell ordered Mormon church critics Jerald and Sandra Tanner to remove links from their site to copyrighted Mormon text.
• Three years ago, U.S. District Judge Sam Lindsay granted a preliminary injuction against Robert Davis, who provided links to live audiocasts of motorcycle racing events copyrighted by SFX Motor Sports.

It would be devastating to the prospects of a useful World Wide Web. Google, which indexes all Web content through automated spiders, could be liable for search results that point to copyrighted content. The same would be true of Bing, Yahoo, and other search engines.

But that’s not the scariest part. The Southern Poverty Law Center (SPLC) maintains its Hatewatch blog to keep “an eye on the radical right,” specifically neo-Nazi, racist, anti-Semitic and other hate groups. Imagine the courts telling these groups they could no longer link to such sites because they didn’t get permission from the copyright holder! (I can just hear someone from the SPLC calling the grand wizard of the KKK and saying, “Our blog keeps an eye on assholes like you. Can we have your permission to link to your website?”)

The case of Robert Davis isn’t nearly as momentous, but consider that a Firefox Greasemonkey script that automatically turns any link to an MP3 file into an embedded MP3 player. SFX Motor Sports sued Davis because people could listen to their audiocasts directly from Davis’ page, which means they never saw the ads or other associated content on their own site. What does that mean for anybody with the Greasemonkey script? Could they all be at risk for any MP3 file visitors could play directly from their sites?

The more you peel back the layers of the onion, the more questions arise. What about links people leave in comments to blog posts? What about shortened links to copyrighted content from Twitter and Facebook?

This is a no-brainer. Hyperlinks are to the web as cables are to a suspension bridge. No links, no Web. If copyright extends to links to content, then the value of the Web—not to mention searches of the Web—will diminish precipitously.

There needs to be more outrage over this trend, and a more coordinated effort to put a stop to it.

Wednesday, June 03, 2009

“Deny-delay-defend” crisis strategy isn’t sound just because it comes from the legal department

In the countless battles between communicators and corporate attorneys over what to say in response to reputation-threatening situations, the lawyers’ advice to say nothing (or little) usually prevails.

The result is often disastrous for the organization, but CEOs and senior leaders presume that mitigation of legal risk is of paramount concern. Industry pundits often agree, arguing that corporations are legal entities, requiring leaders to sweep legal concerns under the rug.

There is no need to characterize this situation as a battle between PR and Legal, however. The fact is that, viewed strictly through the legal prism, the counsel coming from corporate attorneys is frequently bad legal advice. The reasons bad advice comes from the general counsel’s office:

• In a crisis, lawyers are no less inclined to jerk their knees and make bad decisions than any other unprepared member of senior management
• Law schools do a lousy job of equipping their graduates to address the long-term consequences of short-sighted legal counsel

Still, bad legal advice is followed with barely a thought simply because it’s coming from a lawyer who has a seat at the management table. In far too many organizations, management does not share that same level of built-in trust with its top communicators.

Bad advice

The typical advice from legal counsel—silence or something close to it—is usually designed to minimize the risk of judgments awarded to plaintiffs in lawsuits filed in the wake of whatever situation prompted the statement in the first place. That same silence, however, is construed as guilt by a risk-averse public, which can have consequences far more dire than a large judgment. Stakeholders are inclined teo assume the worst about companies in a crisis, so they lose confidence when they resort to typical non-responses.

This isn’t opinion. In a study conducted 12 years ago, the year-end closing stock prices of companies that experienced crises were compared. Those that responded well saw their share value 4%, then rebound and remain 7% above their pre-crisis close, while those responded badly (that is, did what their lawyers told them to do) experienced initial declines of 10% with share prices remaining down, closing the year 15% below pre-crisis levels. That’s a 22% difference in year-end share value between companies that responded honestly and candidly versus those lawyered up over the possibility of lawsuits.

(The Oxford Executive Research Briefing that reported these findings is detailed in this Wharton Leadership Digest, a PDF file.)

Another study, this one from the Stanford Graduate School of Business, found that companies taking responsibility in a crisis outperformed those that blamed someone else by 14-19%.

Expressing regret, apologizing, and acknowldging blame (if there’s blame to acknowledge) do more than help a company’s reputation, though. They actually produce better legal results. While this flies in the face of conventional wisdom—that same conventional wisdom that drives CEOs to buy into the say-nothing strategy promoted by their attorneys—just isn’t supported by the facts. Just ask Jim Golden.

Golden served as general counsel for a company in the trucking industry, a litigation-prone business if ever there was one. He practiced what he calls the “deny-delay-defend” approach to crises, but has since concluded tehat the legal results are far better if companies embrace the responses so often advanced by their PR advisers. Golden, now a negotiation counsel for a Tennessee law firm, says that doing the right thing and telling the truth results in fewer cases going to trial and smaller judgments from those cases that do make it to the inside of a courtroom.

In those cases that do go to trial, Golden says, juries believe that justice has already been done and see no bad guys in the case; there’s nothing left to be proven in court. Golden’s clients that have taken this approach have had their insurance premiums reduced by up to 30%.

This isn’t just Golden’s experience. A study of doctors accused of malpractice found that those who apologized for the outcome (without necessary taking blame) experienced fewer trials and lower settlements. That’s counterintuitive to the legal advice most doctors get, to keep their mouths shut so the lawyers can deal with it in court.

Blame law schools

Golden—who recently participated in an FIR Live discussion on lawyers and communicators—blamed law schools for the deny-delay-defend tactic. Corporate counsels, Golden says, “don’t know their options” because law schools aren’t presenting them. Mid-career attorneys, however, are increasingly seeking training on just those options, with bar associations and litigation departments bring the training in-house.

In the meantime, communicators can do a better job of making the case against deny-delay-defend by pointing out that there are more options than saying nothing (what the lawyers prefer) and self-destructive blathering (what the lawyers fear). According to Fred Garcia, founder and president of crisis management firm LOGOS Consulting Group—and another guest on the recent FIR Live—there’s a lot of room to maneuver in between those two extremes.

It would help, though, if the top communicator’s views were held in the same regard as the top legal counsel. A Financial Post article suggests that’s not the case, with communications relegated to middle management where they don’t have leadership’s ear:

Whether it is due to arrogance, entitlement or a sense of invulnerability among senior executives, as one expert suggests, the reality is that many kings of the corporate world no longer put communications at the top of their agenda. Such isolation has made them more vulnerable to crisis.

It is this inattention to the reputational issues at the heart of communications’ agenda that has led (at least in part) to “the AIG spa scandal, the car manufacturers’ jet debacle and the bonus blowup,” the Post article concludes.

We in communications have been talking about that seat at the management table for at least as long as I’ve been in the profession—more than 30 years. The obvious approach to securing that seat is to prove the bottom-line value of our counsel. But I’m curious: What’s your approach to being taken as seriously as the lawyers in your organization?

Tuesday, May 26, 2009

FIR Live #14: May 26, 2009—Lawyers and Communicators

Content Summary: Communicators are often frustrated in their efforts to protect or restore an organization’s reputation by attorneys who simply block any communication at all, or minimize the response. In today’s FIR Live, attorney Jim Golden and crisis expert Helio Fred Garcia discuss the relationship between attorneys and communicators and how it should change.

Discussion participants were FIR co-hosts Neville Hobson and Shel Holtz. In addition, we were joined by the following guests:

Jim Golden negotiates early reasonable settlements in complex accident and commercial disputes, avoiding or shortening litigation and significantly reducing client costs. Adapting theory learned at the Program on Negotiation at Harvard Law School to the practical needs of firm clients, he provides leadership in an area of legal practice he describes as “negotiation counsel.” He has spoken in venues including the Harvard Law School, Harvard Business School, International Institute of Conflict Prevention and Resolution, Corporate Counsel Summit, Association of Corporate Counsel and the ABA Transportation Megaconference.

Helio Fred Garcia is the president and founder of the crisis management firm LOGOS Consulting Group, and is the executive director of the LOGOS INSTITUTE for Crisis Management & Executive Leadership. He is widely regarded as a leading expert in crisis management and crisis communication. He has 29 years of experience counseling securities firms, banks, insurance companies, specialized financial and professional service firms, corporations, not-for-profits, and governments. He has particular expertise in crisis management, corporate litigation support, struggles for corporate control, international financial transactions, securities offerings, corporate governance, and business ethics.

(Our third guest, UK-based law academic and commentator Mike Semple Piggot, was unfortunately unable to join us for the discussion.)

Get FIR Live:

• Download the MP3 file (25Mb, 1:02:26)
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Share your comments or questions about this show, or suggestions for future shows, in the FIR FriendFeed Room. You can also email us at fircomments@gmail.com; call the Comment Line at +1 206 222 2803 (North America), +44 20 8133 9844 (Europe), or Skype: fircomments; comment at Twitter: twitter.com/FIR or at Jaiku: fir.jaiku.com.

You can email your comments, questions and suggestions as MP3 file attachments, if you wish (max. 3 minutes / 5Mb attachment, please!). We’ll be happy to see how we can include your audio contribution in a show. To receive all For Immediate Release podcasts including the twice-weekly Hobson & Holtz Report, subscribe to the full RSS feed.

This FIR Live Call-In episode is brought to you with Lawrence Ragan Communications, serving communicators worldwide for 35 years. Information: www.ragan.com.

(Cross-posted from For Immediate Release, Neville’s and my podcast blog.)

Thursday, May 21, 2009

Lawyers and communicators: Next on FIR Live

It’s not unusual for communicators to feel stifled by corporate attorneys whose counsel, often viewed as contrary to the organization’s reputational interests, is rubber-stamped by CEOs. IN the next FIR LIveNeville and Shel will look at communicators’ perceptions of lawyers (the myths and the realities), explore ways legal and communications can work together, and discuss whether attorneys’ judgments are always best for the company. Our special guests include Helio Fred Garcia, president and founder of the crisis management firm LOGOS Consulting Group and executive director of the LOGOS INSTITUTE for Crisis Management & Executive Leadership, and law academic and commentator Mike Semple Piggot, aka CharonQC, the man behind Charon QC The Blawg and Insite Law Magazine podcasts.

JUST ADDED: Jim Golden, Chattanooga, Tennessee-based attorney specializing in negotiation of early reasonable settlements in complex accident and commercial disputes, avoiding or shortening litigation and significantly reducing client costs. Adapting theory learned at the Program on Negotiation at Harvard Law School to the practical needs of firm clients, he provides leadership in an area of legal practice he describes as “negotiation counsel.” Golden, who has represented the trucking industry, among others, has views about what companies can and could say that run counter to what you hear from most corporate counsel.

FIR Live #14 is set for Tuesday, May 26 at 10 a.m. PDT, 1 p.m. EDT, and 6 p.m. London.

Please join us with your questions, observations, and stories. Call in at +1.347.324.3723 to listen or to join the conversation, or listen in on the FIR Live page at BlogTalk Radio.

Friday, June 13, 2008

Weighing legal counsel against other issues

A significant portion of my family is made up of lawyers. My brother, an uncle, several cousins all practice law of one type or another. I’ve also worked closely with corporate attorneys over the course of my career, and I can’t think of one who wasn’t a good, decent person. So I don’t view lawyers through the stereotypical filter that has produced volumes of lawyer jokes. They’re real people and most of them work hard to do a good job for their clients.

That doesn’t always mean their advice is always best. In the business world, a lawyer’s job is, in large part, the mitigation of risk. That’s why so many communicators seeking to implement social media in their organizations run into legal roadblocks. It’s not that launching a blog or participating in social networks is illegal per se, but rather that the lawyers—who are only doing their jobs—are obliged to report the potentially negative consequences that could result from such activities.

Some would have us believe that companies must—are required to—comply with every recommendation from the legal team. The fact that every corporation came into being as a legally-based form of organization does not mean that its purpose is legal in nature. As Encyclopaedia Britannica puts it, a corporation is a “specific legal form of organization of persons and material resources, chartered by the state, for the purpose of conducting business.”

So a corporation is born of legal standing but its reason for existence is the conduct of business.

That’s why the general counsel reports to the CEO, not the other way around. It is the job of the CEO to weigh legal counsel against other counsel and make a decision about what is best for the business. Of course, no CEO in his right mind (and there evidently are plenty who are not) would embark on any venture that is illegal. Conversely, a CEO can decide that the benefits of an activity outweigh the risk that a law might, maybe, be violated, particularly if safeguards are put in place to minimize that risk.

Such is the case with organizational engagement in social media. There are some leaders who simply bow to the legal department and reject blogging or other online social engagement. Then there are legal teams—like the one at Dell—that wholeheartedly support company blogging, even by the top investor relations official. In between, there are organizations whose leaders make judgments based on the company’s best interests.

Michael Hyatt, president and CEO of Thomas Nelson (one of the largest trade publishers in the U.S.), is one of these. Interviewed for the new book I have co-written with John C. Havens, “Tactical Transparency.” Hyatt’s outside counsel advised against his plan to encourage employees to blog, citing several risks. Hyatt thanked them for their input and went ahead with his plan which, he says, has produced none of the risks but has returned huge dividends to the company. When asked how he could reject the lawyers’ counsel, Hyatt said:

Leadership, whatever else it takes, it takes courage. You’ve got to be willing, as a leader, to set the pace, to be the example, to model what you’re asking others to do and to be courageous in the face of people who might be fearful or are only looking at the downside. You have to focus also on what’s the upside, and with very, very modest investments, the returns are huge.

(You can listen to the entire interview here.)

History validates Hyatt’s view. The let’s-mitigate-risk approach led legal teams to advise companies against adopting fax machines and email and instant messaging for many of the same reasons they are advising against social media today. Imagine business today if CEOs had listened to their lawyers and rejected email and fax machines! Besides, the lawyers are looking only at what could happen, not necessarily what is inevitable. The development and communication of policies has been incredibly effective at keeping company representatives from stepping on legal landmines. Besides, as Lynn Tyson—Dell’s vice president of investor relations—put it:

The ability for an investor relations department to execute this and do it well quite frankly is predicated on how well they do their jobs every day. And if there’s confidence in their ability to exercise sound situational judgment over the phone or over e-mails or in one-on-one meetings with investors or group meetings with investors or drafting press releases, then there should be that same level of confidence by the company in their ability to have a dialogue over the Internet.

The same goes for an engineer, a human resources manager, or a front-line employee.

As a senior communicator in two Fortune 500 companies, I worked hand-in-hand with the companies’ general counsels. Given their druthers, these top lawyers would have preferred the company didn’t communicate at all. The absence of communication means the absence of legal risk associated with communication. But, of course, these same lawyers recognized that the non-legal risks of not communicating were far greater. That’s why we worked together: to ensure solid communication while also minimizing the potential legal consequences of a misstatement.

I even worked with one associate general counsel who was very clear in a meeting where we were each making our case to management: “My advice is just the legal perspective. There are always other considerations.”

Every now and then, though, a leader had to intervene. In my first job, as an internal communications representative at ARCO in the mid-1970s, I wrote an article based on an interview with the president of the company’s minerals division. At that time, the threat of Congressionally-mandated vertical divestiture was looming, which caused the lawyers to excise a quote in which the president insisted that, should divestiture occur, the minerals division would be able to survive as an independent company.

In a meeting, the president listened respectfully to the lawyers’ arguments. When they were finished, he asked, “But is it true?” The lawyers agreed it was true. The president turned to me and said, “So print it.”

That’s courage. The lawyers did their job and the president made a decision based on all the factors. And wouldn’t you know, none of the lawyers’ concerns ever materialized.

There’s a reason, after all, that lawyers are called “counselors.” I have no issue with lawyers invoking legal risks when advising on social media. I just have problems with leaders who fail to weigh those risks against all other factors to make a decision based on the best interests of the business.

Saturday, April 19, 2008

Overcoming key resistence to adopting social media

I’ve talked before about the reasons companies resist social media. The Arthur W. Page Society and the Corporate Executive Board are out with a study that puts some numbers behind the top reasons for organizational resistance. The study, which targeted more than 30 chief communications officers who are corporate members of the Page Society, revealed nothing surprising, but still, it’s easier to offer counter-arguments when you know what’s holding companies back.

Resistance from the legal department

Lawyers take too much heat for opposing social media. Their job is to be cautious, to advise their employers/clients against things that pose legal risks. The fault rests with leaders who blindly follow legal advice rather than balancing it against other factors. When faced with lawyers who want to put the brakes on new media, offer the following points:

• Lawyers have okayed blogs of all stripes at 58 of the Fortune 500.
• Sun Microsystems’ general counsel is blogging.
• Few of the legal concerns have materialized among companies with blogs.
• The value of engagement in social media, applied intelligently, will easily outweigh the risks (see next item).

Lack of ROI

There have been a lot of developments in the ability to assess the return on investment for engagement with social media. See Kami Huyse’s example of ROI from a social media effort on behalf of her client, Sea World. PR measurement guru Katie Delahaye Paine also addresses measurement of social media quite nicely in her new book, “Measuring Public Relationships.”

In any case, the days of shrugging off social media because there’s no ROI are over. We need to educate the decision-makers about the kinds of ROI being attained by others and how it can be measured for our organizations.

Too labor-intensive

I remember speaking to the CEO of a Dutch company who said his board was concerned about the amount of time spent blogging. He answered that he wasn’t spending any more time communicating than he was before. However, some of the total time allocated to communicating had shifted to his blog because the blog was a more effective tool, in many circumstances, than phone calls, speeches at industry association meetings, and newspaper interviews. He hadn’t given up on those (and other) older forms of communication, but adding blogs to the mix allowed him to use the most appropriate tool for the job.

On the other hand, some social media will require additional labor. Southwest Airlines had to hire additional staff to monitor and approve comments left to its blog. It wasn’t something Southwest hesitated to do, though, given that they had already concluded that the ROI from the blog would far outweigh the cost of managing it (see previous item). If the company takes a strategic approach to its social media activities, the ROI will already be understood (a far better approach than saying, “Hey, we gotta have a blog!”).

It’s also easy to start small in order to get comfortable with social media before diving in. I advised one colleague that his company could start with a blog focused on recruiting (a key issue for his company) rather than a Southwest-like blog or a CEO blog. The audience is more limited and the discussion more focused. When the value of that blog proves itself, additional online social activities simply become the next step.

Lack of expertise

This is actually a valid concern, but shouldn’t be a deal-breaker. The solution is to get some expertise.

There are several ways to do this: Hire someone, start small (see previous item) in order to develop the expertise, find someone in your organization who is already engaged and take advantage of their experience or contract with any of the agencies or individuals out there who can help provide you with the expertise you need.

Challenges, not obstacles

I always rolled my eyes at the corporate-speak that positioned problems as “opportunities.” But we who advocate our companies’ involvement in social media should see the resistance as challenges to overcome rather than roadblocks that send us packing. That’s what Northwest Mutual Life Insurance did, according to the Forrester case study. The conservative, 150-year-old financial services company identified the areas of resistence, then found the means to overcome them, ultimately launching an internal blogging initiative. Applying the principles of sound business management to a company’s entry into the social media space doesn’t have to be an oxymoronic concept.

Thursday, March 06, 2008

Blogging in a regulated environment