Can a firm effectively service competing clients without a conflict shop?

Edelman's Ethan Rasiel and LG Electronics' John Taylor debate whether PR firms can service competing clients without conflict shops

Yes

Ethan Rasiel
EVP at Edelman and head of the firm's technology practice in New York; 13 years of experience in PR

Other professional service organizations, such as law firms, accounting firms, and management consultancies, commonly serve clients that compete with each other. The PR industry, on the other hand, has overcorrected in the opposite direction.

The fact is, we're quite capable of handling clients that compete with one another if we take to heart a few simple measures.

Not all conflicts are created equal. A company usually has a short list of “peer” competitors that can't be touched. Outside of this list, it may be fine to handle competitors of a different size or scale. We must document those “can't touch” competitors in contracts – along with the global scope, breadth, and extent of that restriction – and stick to those agreements.

Be honest and transparent. Nothing damages our industry's credibility more than taking on a competitor without notifying an existing client first. We need to be up-front and raise the issue proactively when appropriate.

Have strict policies to limit information exchange between groups. This may include physical separation of groups, distinct file servers and printers, or scope of work defined by geography or practice area.

Terms like “Chinese wall” are used so broadly, they've lost a lot of their meaning. Edelman is among a rising number of firms to employ a full-time ethics and compliance officer to oversee such issues. We are now revising our “Code of Conduct” to precisely define the usage of conflict mitigation tools, including firewalls, as well as policies for training, audits, and enforcement.

Due to convergence, evolving product feature sets, and a steady pace of acquisitions, the competitive landscape is an ever-shifting web – particularly in the tech world. If firms tried to truly and fully avoid any competitive conflict, we'd be constantly resigning accounts.

This instability is just the opposite of what clients need from us. What they want is access to top talent and subject-matter experts who will be there for them.

The above measures will let us successfully service clients that compete – while still respecting existing relationships and continuing the upward trajectory of the PR industry.


No

John Taylor
VP, public affairs and comms, LG Electronics USA; 28-year PR veteran, 16 years as company's senior comms executive

It's understandable that agencies will do their utmost to convince clients that they have “Chinese Walls” and the conflict management processes that will allow conflicting clients to live side-by-side in a single agency. And I don't wish to inadvertently cast a slur on the ethics of agencies. They will generally go to great lengths to keep conflicted clients away from each other.

But it's always a compromise. I know from experience, agencies are very fluid environments. Young people moving up in their careers switch from one account group to another. Client updates are delivered at staff meetings. Management meetings review strategy, weighing one client's prospects against another's.

And if you're a global client of a firm – as is the case with LG Electronics – then the challenges of preventing sensitive planning and strategic information accidentally crossing conflict-management boundaries become even more complex. LG is a worldwide leader across multiple consumer product areas, including mobile phones, home appliances, air conditioners, and home entertainment products. This adds further challenges to the management of our account and information.

It's cleaner, more effective, and in the best long-term interest of both the client and the agency to handle conflicts by putting one client into a separate conflict shop. It creates a situation that is clear cut, accountable, and manageable for the team that works on our business, the management of the agency – and especially for the client.

If that was ever in doubt, it was confirmed in our recent review in which LG was looking for a single agency to serve our needs globally. We understood that no global agency network would be without conflict.

Lots of possible solutions were suggested to us by several very good firms. The one that stood out as the strongest, with the best possible conflict safeguards while still offering a high level of service and resources, was LG-One – a specially created team, custom-built to our specification, using the best of several WPP companies.

Why compromise?


PRWeek's view
With the proper measures in place to ensure that teams are kept separate and that the privacy of integral information is maintained, firms can service competitive clients without the need for a conflict shop.

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