Preparing Today for Tomorrow’s Litigation Risk to Corporate Reputation

A new study provides some noteworthy insights into the expected rise next year in corporate spending on outside counsel for litigation matters – and, by extension, into the legal issues and accompanying reputational risks corporations should be preparing for.

Outside litigation spending by corporate America is projected to reach $23.71 billion in 2021, according to BTI Consulting Group’s Litigation Outlook 2021. This would represent an increase of about 4% from 2020 spending levels.

The study found that the specific practice areas expected to experience the bulk of spending growth are employment, class actions and cybersecurity litigation, with a lesser increase for commercial litigation spending. Of course the implications of this statistic must be considered in the context of the current global pandemic. With the battle against the coronavirus presenting unique challenges for businesses and upending traditional processes and practices, corporations are now facing additional risk factors and new legal liabilities in each of these three areas. Not surprisingly, legal issues in all of these areas could also bring significant reputational risk, prompt questions and concerns among key stakeholders, and/or disrupt the enterprise’s normal-course communications efforts.

As the scope of the pandemic and its lethal impact became clear, the public’s expectations for corporations and employers around health and safety matters shifted in dramatic ways. According to a McKinsey & Company study in July 2020, consumers now look for “visible safety measures,” “healthy and hygienic packaging,” and “demonstrated care and concern for employees” when deciding where to spend their money. Companies are expected to physically protect their employees and customers from exposure to the coronavirus, and should be prepared for the possibility of legal liability and associated fallout among an increasingly activist consumer base for failure to do so. Additionally, as so many daily routines have moved into the digital space, corporate protection of customer data has returned to the spotlight, and compromised digital information represents a growing legal and reputational threat as working from home has become the new normal.

Although the business environment is already turbulent, these thorny legal and reputational issues will continue for the foreseeable future. General counsels should take time now to make sure their in-house communications teams are prepared for increased litigation activity in these areas and any associated reputational impacts.

Enterprises should look toward outside communications counsel who specialize in litigation support, keeping them at the ready to augment the capabilities of an in-house PR department. External litigation communications support can allow in-house communications and marketing teams to remain focused on their core purpose of brand, product and executive positioning and promotion. Additionally, communications advisors with this particular expertise can help prepare a company for likely non-legal impacts of litigation proceedings, and help determine whether and how existing marketing and PR plans or other company messaging needs to be altered to reflect and/or support the company’s legal position.

KARV has deep experience in providing strategic communications that support a client’s litigation strategy and in seeking the most effective way to articulate and present an enterprise’s position and rationale to critical audiences in times of immense change and challenge. Our expertise can help ensure your communications efforts around contentious litigation matters – actual or potential – are as effective as possible in advancing your chosen litigation strategy while defending your institution’s reputation.