The Crossroads of law and public relations

By Jim Middlemiss Web Only

The Crossroads of law and public relations

Photo licensed under Creative Commons by Niuton may.

When Mirko Bibic left private practice to join Bell Canada Enterprises (BCE) as a regulatory lawyer, little did he know that one day he would be playing a key role in the government and public relations efforts of his company.

During his 10-year rise to Chief Legal and Regulatory Officer, and Executive Vice-President of Corporate Development, Bibic acted as spokesperson at times, and became the corporation's public face at the Canadian Radio-Television Commission (CRTC), BCE's primary regulator. As part of the deal-making team, he would often be dragged into media and investor relations issues. Now, his responsibilities include both legal and government affairs.

Reputation risk driving change

Bibic says one of the biggest changes he has seen in corporate boardrooms since joining BCE is the attention being paid to risk. “Ultimately, it comes down to reputation risk and brand risk.”

It’s forcing chief legal officers and their corporate law departments to garner a better understanding of things like media, public relations and government affairs.

A decade ago, he says, reporting on regulatory matters at the CRTC was “fairly esoteric,” and if there was mainstream media coverage of an issue, it played out over time. However, with the rise of a 24-hour media cycle, and an increase in media outlets and instantaneous coverage, it has changed the way companies must manage their corporate reputation. Something that might not have garnered traction a decade ago can go viral on the Internet in a matter of minutes.

“Stakeholders don't have to rely on an intermediary like the media to take an esoteric issue and make it mainstream,” Bibic explains.

Bibic is not alone in branching out beyond the traditional legal role expected of a chief legal officer or general counsel. Over the past decade, there has been a growing shift of power in the corporate ranks, as the law department plays a more important role in a corporation's public face. More and more CLOs and GCs are being handed oversight for some form of the three Rs of communications—government relations (GR), investor relations (IR) and even public relations (PR).

Take Melissa Kennedy, Executive Vice-President, Chief Legal Officer and Public Affairs at Sun Life Financial. She oversees enterprise legal, compliance, corporate secretarial, and corporate and public affairs functions. That includes government and public relations, but not investor relations.

Like Bibic, she represents a new breed of chief legal officer that is emerging in corporate Canada. “I have always been quite attuned to the PR aspect of my work given the profile nature of the things I have historically done in my career.”

That includes heading up the litigation groups at the Ontario Securities Commission and the CIBC, where she became “very attuned to the potential reputational risk” posed by litigation, particularly class actions. She later took on a broader role at the Ontario Teachers’ Pension Plan, which extended beyond law and included corporate affairs, before joining Sun Life in 2014.

“I think most lawyers have in their background explicitly or implicitly an affinity for policy, and that is at the heart one of the threads that run through a legal and PR group,” she explains.

Kennedy says she started noting a shift in the extent of the legal department’s reach into other divisions following the Enron crisis in 2000, which led to the Sarbanes-Oxley reforms in the United States that focused on governance. The shift picked up steam following the financial crises in 2008, which led to a number of risk reforms. It’s that increased focus on risk management that is driving a closer collaboration between legal departments and other divisions within companies.

KPMG’s 2012 Beyond the Law survey notes that “in a very challenging business world, general counsel are being called upon to play a greater role in the running of companies, particularly in the management of risk.” The survey of 320 general counsels in 32 different countries found an increasing need to develop closer working relationships with other parts of the organization. Respondents cited finance (61 per cent) and internal audit (59 per cent) as the top two areas. However, right on the heels were sales and marketing, cited by 55 per cent.

When it comes to reporting lines, CLOs are increasingly seeing their reach extend beyond purely legal functions.

PR in the CLO target zone

Of the three Rs, investor relations remains largely within the purview of chief financial officers, but legal remains closely integrated, providing advice and direction. Government relations, however, is increasingly reporting to legal, and public relations is also in the CLO’s target zone.

The USC Annenberg School of Communication and Journalism undertakes an annual survey of generally accepted practices within public relations departments at public and private companies. In the 2014 survey, the legal department is the fourth most listed company division that has oversight of PR. About 43% report to the CEO directly, while 26% report to marketing. Human Resources is third at 7.3%, followed by law at 6%. A further 28% indicate they have dotted-line reporting to legal.

The study also found the greater the integration of PR and communications functions in departments like finance and law, the higher the company scores in internal success factors, such as strategic planning and financial success.

Interestingly, the legal and PR departments suffer some of the same challenges, which is embedding and integrating their operations into the business, and getting the respect they seek from company decision makers.

However, there are challenges when PR reports to legal, says Jerry Swerling, Director of PR Studies at the school. Those surveyed who report to legal are less likely to say that their company has a good reputation and is successful. Swerling says one of the criticisms is that “legal tends not to understand this complex, explosive media environment we live in today.”

Part of the problem, he explains, is cultural. Lawyers by their nature “take too long to develop a point of view” because they are gathering facts and considering all the possible implications. “Legal tends to lean towards caution,” putting legal risk ahead of reputational risk. In a time of crisis, delay can be fatal, he says.

Another aggravating factor, according to Swerling, is that “management doesn't want to believe the shit is going to hit the fan. They still believe that it can be contained, and still believe that nobody is going to find out, despite evidence to the contrary every day.”

Savvy CLOs need to understand the various dynamics at play, he advises, and leverage their PR departments, despite the lack of trust or skepticism that often exists between the two functions. In fact, an argument can be made that the legal reporting line can actually prove to be a viable home for PR. As Swerling points out, the survey also found that “the reporting line isn’t necessarily as important as access and influence. This surprised us.”

Coveted access to the C-Suite

PR executives say it is access to the C-suite that they covet the most, which permits them to do their best work. Few departments have better access to the C-suite than law.

So that can actually be an advantage to a “real visionary chief legal officer,” Swerling says. “You need to have a solid communicator who can represent the communications point of view with his or her boss. You need an environment and culture that facilitates that kind of interaction.”

However, Anne Giardini, Chancellor at Simon Fraser University and former President of Weyerhaeuser Company Limited, the Canadian subsidiary of Weyerhaeuser Company, warns that there is a risk in too close of an alignment between legal and PR. “I think the value of the two is diversity of thought,” she explains. Putting them under one roof could diminish that. “Involve in groupthink at your peril.”

Nonetheless, ask in-house lawyers who have worked closely with the PR operations and they will tell you that integration among the disciplines is critical to the successful management of a crisis or issue.

Rob Landry, a former in-house lawyer at Magna International Inc., Paperlinx North America and ING Direct Canada, where he was also Chief Operating Officer, says, “While my team wasn’t accountable for PR, I linked closely with the chief marketing officer. He and I would talk about goals and objectives.”

Landry, who is now Chief Operating Officer at Gowlings, explains, “You cannot work in silos and be effective at staying on top of what’s happening in the media.”

His advice is simple: “I would lock myself at the hip with whoever is accountable for PR. It moves so quickly. Unless you are on top of the issues, you are in a very deep hole before you are responding.”

Understanding PR

Lawyers who find themselves highly involved in the PR task need to rethink how they approach problems and understand how their PR colleagues operate, according to lawyers who have been there. PR professionals are essentially storytellers who operate in a fast-paced environment that can change with an inadvertent tweet, an executive misstep or a corporate foul up.

“Social media has accelerated people’s engagement in issues that affect them,” warns Maura Lendon, Vice-President, Chief General Counsel and Corporate Secretary at Primero Mining Corp. “Things happen so quickly that no one has the luxury of pushing the pause button while they do the legal analysis. You have to be responsive to things that are raised by shareholders, customers, investors or regulators. It's really important for in-house lawyers to be able to write a publicly digestible message.”

She likens the lawyer’s role in PR issues or crises to that of an advocate: “The role of the advocate requires the story to be communicated in a way that is clear and compelling.” While PR professionals are good at creating narrative, she believes it’s the lawyer’s job to deal with the nuance of language. She notes that while an apple and a pear are both fruit, they are very different. “It’s the nuances, distinctions and subtleties that I think is the domain of the lawyer.”

Scott Ewart, CEO of consulting firm HelixLegal Ltd. and former Chief Legal and Public Affairs Officer at Molson Coors Canada, stresses the need for a coherent message across an organization when dealing with strategic issues. But that doesn’t always happen when GR, PR and law operate in their own silos. “You’d be surprised how many times that there is not a coherent message among the three.”

He likes the idea of having GR and PR report to the CLO or GC, and stresses the need for a collaborative approach to build a well-oiled machine leveraging the talents of the three disciplines: “It’s a good idea to be in charge of that function. If [general counsels] are not, they spend most of their time battling turf wars. That’s counterproductive. It’s far better to deal with GR and PR to get a consensus around the messaging.”

Moreover, he says, the talent and skill sets complement one another. “In my view, lawyers are very, very good at managing risk, and very good at evaluating that risk and mitigating it.”

When it comes to government relations, he says, “you don't want to send a lawyer into the government.” That only raises suspicions, and government officials think if the lawyer has arrived, there must be a “big problem. You are not going to get anywhere.”

In that case, the best thing to do is to “get a very, very good government relations person who knows his or her way around and knows all the people and can communicate all those messages within the strategic plan you have created.”

Moreover, it's his view that, in general, lawyers are “not so good at talking to the public. You never want a lawyer talking to reporters, particularly on camera. You get the sense that they are guarded and worried about what they are saying.”

Not everyone shares that viewpoint. Bibic, who has had his share of media interviews, concedes that it’s not easy being the spokesperson but he has worked hard to master it. “I’ve relied primarily on the good advice and discretion of our comms [communications] team. That’s where I learned it, by listening to them, taking their advice and doing a lot of media interviews and appearing at committee hearings. You can really only get good at it by doing it.”

“You don't realize how bright the lights are until you experience it,” Bibic says of on-camera interviews. As well, scrums—where journalists circle their prey rapidly firing off questions—can be a challenge to master, though Bibic says scrums “feel a little more natural in some sense than one-on-one interviews, particularly when the interviews are live.”

He says the toughest interviews are double-enders, where the anchor is in one studio and the guest is in another staring at a camera and they can't see the other participant. “They take the most getting used to because you are trying to be natural, but can’t see anyone,” Bibic says.

His advice for other lawyers who might be called upon to handle media interviews: “Never ask your kids how you did. They’re your harshest critics.

This article was first published in the Winter 2015 issue of CCCA Magazine.

 

Jim Middlemiss is a writer based in London, Ontario.

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