MARKET FOCUS: PR gavel-to-gavel

As courtroom battles become more public, litigation PR becomes more crucial.

As courtroom battles become more public, litigation PR becomes more crucial.

In the 1990s, a new practice area for large PR firms was born from the explosion of high-profile lawsuits over such things as breast implants, asbestos, and the murder of Nicole Brown Simpson: litigation PR. Companies have learned that the effect of a lawsuit on its reputation and stock price - even a lawsuit it views as frivolous - can be dire. Attorneys that represent these companies - a group of famously tight-lipped individuals - are coming to see that it's in their clients' best interests to sway public opinion in their favor. Such outreach might even have positive results inside the courtroom. Broadly speaking, the role of litigation PR is both to protect the company's reputation and to help it win the case, or at least reach a less painful settlement. No one seems to have numbers about the growth of litigation PR as a practice. Individual practitioners say their business is either holding steady or growing strongly. "To see the growth in litigation PR, all you have to do is turn on the TV or pick up a newspaper or magazine," says Karen Doyne, managing director of crisis and issues management for Burson-Marsteller, who oversees the agency's litigation practice. "Lawsuits have become such an important filler of the news hole." Harlan Loeb says that since he became US director of litigation for Hill & Knowlton about two-and-a-half years ago, the practice's revenues have grown by about 30% and are at least $7 million. He says it is among a handful of practices the agency has identified for growth. Loeb calls litigation PR an immature market. "If you look at the total revenue of litigation services versus the dollar spend on legal services, it is a very low number," he says. "If you weigh that number against the value we can provide in reducing that amount spent on litigation, there is enormous opportunity." Large corporations spend about $20 million a year on their legal tab. Obviously, if putting even $300,000 toward the communications aspect of a case can lower that bill by bringing an early settlement, the company should view it as cash well spent. Litigation PR can save companies money in several ways. It can help counter the often emotional appeals of the plaintiff side, which can convince the plaintiffs' lawyers to settle earlier and for less money. Offering an opinion Sometimes the communicators work to convince the firms that going to trial would be a losing proposition. Larry Kamer, SVP and director of issues and crisis management at MS&L, says several years ago at another firm, he worked on a large sex-bias lawsuit that the attorneys were determined to take to trial. He thought the facts were damning, and the court had a reputation for being pro-employee. He was able to convince the client to conduct a series of mock trials that showed it would lose the case. "There, I think, we saved them a ton of dough," he says. Loeb says litigation PR practitioners try to demonstrate their worth through surveys, such as of consumer opinions about litigation. For example, H&K has found that 80% of Americans are willing to suspend judgment pending the outcome of a dispute if a firm responds quickly to an accusation. The agency is conducting a study on litigation's effect on a company's stock price. A major part of what litigation PR pros do concerns countering the plaintiff side's messages. David Shapiro, a partner at Brunswick Group, says in a class action against Aetna, the lawyers for a group of doctors, who were the plaintiffs, portrayed them as trying to change public policy for the better. The defense side argued in the court of public opinion that, as Shapiro says, "a single judge in a single court is not the best way to make healthcare policy." PR professionals say lawyers and companies are learning to bring them in earlier on cases, even before a complaint is filed. That's one reason the line between crisis and litigation PR is often blurred (but it's a rare crisis these days that doesn't end up in the courts). James F. Haggerty, president and CEO of The PR Consulting Group, says that litigation PR differs from crisis in that the latter is usually an intense, short-term assignment, and lawsuits can go on for years and years. That's one reason clients like to pay for the litigation work hourly, so they're not shelling out a retainer during the many lulls in the action. But Shapiro says he prefers to work on retainer for fear that clients will cut him out of important calls to keep him off the clock and save money. The ebb and flow of litigation work is a factor that makes it challenging for PR firms to do from a business standpoint. Haggerty says the fees for litigation work can be a third to 50% higher than those for, say, product PR. Like crisis work, litigation PR also has attractive margins, as high as 30% - or even higher for matters that get resolved quicker than expected. One reason the margins are high is that it's a practice that can't be done by junior people. "There's not a lot of scut work in litigation communications," says Kent Jarrell, SVP and director of litigation communications at APCO Worldwide. Jarrell says clients are asking for a wider batch of services from litigation PR specialists. For example, in one case, the client wanted to know how the lawsuit was affecting consumers, so it conducted focus groups. For another client, APCO is placing issues advertising in the trade press to communicate with customers about a series of suits against the client. Litigation PR professionals also are involved in polling research and mock trials. "So suddenly, from doing very strict messaging around the legal arguments, sophisticated clients are asking for an array of services around the litigation," Jarrell says. Robert H. Bork, chairman and CEO of Bork Communication Group, who has been practicing litigation PR since 1993, says that websites devoted to a lawsuit are increasingly popular. He has one for client Huntleigh (www.bork.com/huntleigh/), the airport security firm that is suing the US government for its decision to federalize that work. Martha Stewart also has such a site (www.marthatalks.com). Increases in work Because litigation PR pros offer a premium service that grants them access to the highest levels of a firm, including the CEO and the board, they can often bring in other, non-litigation-related work, for the PR agency. For example, in 2000 H&K began working with Illinois energy firm Nicor Gas over lawsuits alleging mercury spillage when the company removed gas regulators from homes. Loeb says the agency now does marketing and brand, issues, and crisis management for the company. Practitioners say they see an increase in work here from non-US firms. Loeb says half of H&K's US litigation revenue comes from foreign firms doing business in the US; one is a Swedish company being sued by Cantor Fitzgerald for trademark infringement. Doyne says Burson is representing the US subsidiary of a Japanese company involved in a tort class action. Crisis and financial communications boutiques are also getting more involved in litigation. With today's many financial scandals, it's understandable that financial PR experts are being sought. Perhaps most famously, George Sard of Citigate Sard Verbinnen has been advising Stewart on her trial. MD Ron Culp says litigation PR is one of the firm's core competencies. Sitrick & Associates is an example of a crisis boutique that does litigation PR, and Jonathan Bernstein, president of Bernstein Crisis Management, says 60% of his business is in litigation PR, and lawyers are his most fruitful source of referrals. Then there are a number of boutique firms that started out offering PR and marketing services for law firms and have branched out into litigation PR. Jay Jaffe started such a firm, Jaffe Associates, in Washington, DC, in 1979. Richard Levick, president and CEO of Levick Strategic Communications, also in Washington, DC, started with law firm PR but now litigation PR is almost a third of his business. He now represents professionals involved in the Enron and Adelphia situations. (The firm also publishes a book, Stop the Presses: The Litigation PR Desk Reference.) Haggerty says his firm, PR Consulting Group, started out doing law firm marketing, but now 70% of its business is litigation PR. He expects his revenues this year to double to somewhere between $2 million and $3 million. (And he has his own book, In the Court of Public Opinion, published by John Wiley & Sons.) Two practitioners at agencies said they know of in-house PR people at client companies who dedicate their time in whole or in part to doing litigation communications, though they declined to name them for the record. Some law firms also have an in-house communications person who bills out hourly for working on the messages surrounding litigation the firm's lawyers handle. In addition to doing PR for Bingham McCutchen, Boston's largest law firm, Hank Shafran, director of communications, handles litigation PR for its clients, billing out hourly just like the attorneys. "It's nice not to be 100% overhead," he says. Former White House special counsel Lanny Davis heads a six-lawyer team at law firm Orrick, Herrington & Sutcliffe in Washington, DC, that practices law and litigation communications, an approach he calls unique. Two high-profile cases Davis has been connected to are Metabolife's ephedra controversy and HealthSouth's financial scandal. In an indicator that the litigation PR practice is still evolving, from 2001 to 2003, Bernstein's agency was owned by Quarles & Brady, a Milwaukee law firm, to offer litigation communications to its clients. Bernstein calls it an experiment that didn't pan out. "Despite the many litigation matters my parent firm had, we couldn't get the attorneys thinking about getting the referral," recalls Bernstein. But he still gets business from the law firm.

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