How you respond when a difficult situation arises can make a real difference to the outcome for your business. Whether the issue is financial, reputational, operational, or a combination of all three, it is important to take a considered approach and have the right support around you from the outset.
Anna Bewley Goodman, a LegalEdge in-house lawyer with experience advising brand-driven and scaling companies through high-stakes crises, sets out the steps you can take to safeguard your business when a daunting situation arises.
What triggers the need for crisis management?
⚠️ Common triggers include:
- Disgruntled employees, customers, or competitors – complaints or disputes that can escalate if not addressed promptly;
- A cybersecurity incident – such as a data breach, ransomware attack, or other unauthorised access;
- Negative media coverage – a social media post can be picked up by another media source and quickly attract attention;
- A complaint to a regulator – even a single complaint can prompt a formal investigation;
- Compliance gaps – areas of non-compliance with regulation applicable to your business;
- Operational failures – service disruptions, supply chain issues, or product problems.
How can you minimise the impact on your business?
- Pause before you respond. Often the instinct is to jump to the defence of your business, but a hasty public response or an ill-judged email can escalate matters. Take a moment to get the full picture and strategically plan your response.
- Check any legal or regulatory timelines that apply. For example, if there has been a personal data breach, you must report the breach to the ICO (UK’s Data Protection Regulator) within 72 hours of becoming aware of the breach.
- Consider how to protect privilege before investigating – where an internal investigation may reveal wrongdoing, bringing in legal support from the outset will help you to maintain “privilege” for certain documents and communications (this means that they are protected from disclosure in legal proceedings) while still being able to discuss them with your legal advisor.
- Understand the potential risks involved – this will help you shape your response and prioritise next steps. Consider each of the following:
- Financial – get a sense of your exposure, whether from impact on revenue, potential regulatory fines, contractual claims, or impact on investor and customer confidence. This will help you prioritise next steps and work out what support you may need.
- Reputational – investor and customer perception can change quickly, often before the full picture has emerged. Your ability to steer your business through a difficult situation calmly and effectively may be crucial to your reputation.
- Operational – if the issue relates to your product or service, engage your internal team and relevant suppliers promptly to manage the impact on operations. It is also worth reviewing your supplier contracts and customer terms and conditions to understand your obligations.
- Be prepared – it is well worth putting a crisis management plan in place before you need one. Your plan should identify the key individuals (internal and external) you will call upon, set out your communications approach, establish clear escalation paths, and always include a cyber incident response plan (something that every business should have given the speed at which a cyber incident can escalate – see our blog here).
How can legal support help you handle a crisis?
Ideally, the right legal support should be involved as soon as possible so that they can:
- get to grips with the legal risks and obligations quickly, giving you a clear picture and managing these risks from the outset;
- look for early resolution options, keeping things proportionate and avoiding unnecessary escalation;
- take the time to understand your wider business priorities, not just the legal position, so that the steps you take actually serve your business at this stage of growth;
- work as part of your team and adapt to the resources you have available, understanding that not every scaling company has dedicated people in PR, IT and Operations and working with that reality rather than treating it as a problem;
- help you maintain stakeholder confidence throughout. A difficult situation handled well – and learned from – can build lasting trust with customers and investors.
How LegalEdge can help
If you would like to discuss your crisis preparedness or need support with a situation you are currently facing, get in touch with the LegalEdge team today.
At LegalEdge, we work closely with scaling companies and understand the particular pressures that come with rapid growth. We can move quickly to provide practical, commercial support – and where a situation calls for specialist input beyond legal advice, such as PR or cybersecurity expertise, we have a trusted network of advisors we can bring in alongside us. Once the immediate situation has been resolved, we can help you put measures in place so you are better prepared going forward.
