By: Cathleen Flahardy

September, 2004, Corporate Legal Times

Excerpted from the larger article: "SuperConference04; A Behind-The-Scenes Look At The Conference For In-House Counsel"

In-house counsel have been paying a hefty price for their role in the demise of some of America's corporate giants. Since the Enron scandal broke a few years ago, legal departments have become the central focus in many corporate misconduct investigations. That means general counsel aren't only facing angry judges, but also inquisitive reporters. The problem, though, is that most GCs aren't prepared to go head-to-head with journalists.

According to a recent survey of corporate counsel by Hill & Knowlton, in-house lawyers are aware of the impact the media can have on high-profile cases, but are falling short in creating and executing effective PR strategies. Panelists at two SuperConference sessions tried to change that by offering attendees advice on what to say and how to act when facing reporters. But more importantly, attendees also discovered how to turn potential crises into positive press_an opportunity many companies miss.

Opportunity Knocks

Mercedes-Benz faced a crisis in 1998. Shortly after releasing its A-Class model, two Swedish journalists put the car to the "moose test" -- a non-scientific experiment to find out whether a vehicle will flip over when a driver swerves to avoid hitting a moose (a common critter on the country roads of Sweden). The A-Class failed.

Mercedes found nothing wrong with the car aside from a minor alignment problem, which didn't contribute to the car's shortcomings in the test. But it was too late. The European media got hold of the test results and deemed the A-Class a failure.

But the company saw its chance to put a positive spin on the negative press.

"Mercedes could have called the cars in, fiddled with the suspension and given its customers a cup of coffee and a T-shirt," said Daniel Diermeier, a panelist at the session "From Blackbelt to Managing By Objectives" and a professor at Northwestern University's Kellogg School of Management. "It would have cost between $ 5 million and $ 10 million, and everyone would have been happy."

But that's not what it did. The company wanted its A-Class owners to receive the same treatment as its other customers. It recalled all 18,000 cars and installed an electronic utility package, a $ 600 option on the company's premium-line vehicles. Mercedes also provided each owner with a C-Class to drive during the two weeks it took to fix their vehicles.

In the end, Mercedes shelled out more the $ 150 million. But the media loved it, and the A-Class survived a near disaster.

Not all companies, however, see these potential crises as opportunities.

When the Exxon Mobile Corp.'s Exxon Valdez ran aground off the coast of Alaska in 1989, spilling more than 10 million gallons of crude oil into Prince William Sound, the company remained tight-lipped according to Diermeier. Shortly after the incident, a reporter asked Exxon CEO Lee Raymond when he was going to Alaska to clean up the mess. Raymond responded by saying he wasn't because he had a business to run.

Diermeier said that was Exxon's pivotal moment to turn a disastrous incident into a positive opportunity for the company.

"At that moment, we learned the company only cared about the bottom line," Diermeier said, adding had Raymond shown more interest in the problem, public opinion may have turned out drastically different. "To this day, that incident is what everyone associates the Exxon company with."

While the Mercedes and Exxon events are extreme examples of media crises, companies often face reporters interested in more routine situations. And maintaining poise and knowing what to say in those situations is almost as important.

Interview Tips

Margie Elsberg, a panelist at "Master the Art of the Media Interview" and a communications consultant with Maryland-based Elsberg Associates, said honesty is your best friend.

"Nothing destroys public trust faster than being caught in a lie," she said. "If something has gone wrong, acknowledge the truth and look and sound like you care."

Elsberg's other top tips for dealing with the media are: be yourself, prepare quotable messages, use plain language, avoid anger or defensiveness and deliver a positive message.

"Even when you're dealing with serious concerns, your messages should be positive," Elsberg stresses. "Avoid denying accusations. Denials simply add credibility to the charges."

Knowing the facts about an incident also is critical in times of crisis. "Support your messages with specifics," she explained. "Put technical information in terms people can relate to."

And finally, never say "no comment."

"If you can't answer a question, explain why," Elsberg said.

CBS Chicago anchorman Antonio Mora, who also spoke at the session recommended pretending the media interview is a first date. "Look the reporter in the eye," he explained. "And act as though they're the only person in the world you want to be with. Be interesting."

Although dealing with the media may be intimidating, Elsberg said it's important to remember that reporters need their stories.

"TV reporters need pictures. Radio reporters need sound bites. And print reporters thrive on telling complex stories," she said. "By recognizing the needs of different kinds of reporters, you can decide where in the media world your story belongs, and you can help reporters tell your story with greater clarity and impact."3