Texas Freeze: Crisis Management Best Practices for Businesses Picking Up the Pieces

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TAKEAWAYS

  • Be proactive in considering and protecting potentially applicable attorney-client and work product privileges.
  • Communications during and following crisis should always be examined through a lens of compassion.
  • Dedicate time afterward with a multidisciplinary group to surface and memorialize lessons learned to build an increasingly resilient organization.

After an unprecedented freeze that impeded travel and disrupted electricity, heat, internet, cellular and water services for days—upending lives and businesses across the state on a massive scale—the cleanup continues, with losses still to be tabulated, and for many, water still to be restored. And, it all happened against the backdrop of the ongoing COVID-19 pandemic in which vaccination efforts are in a race against new virus variants. For businesses picking up the pieces, deploying a few key crisis-management best practices will help:

Protect attorney-client and work product privileges as the Company responds.

As with any event that has human resource implications or that impairs business continuity, errors in judgment as to whether and how action is taken and communicated can lead to significant liability if handled incorrectly. For example, a decision about employee travel can be later questioned if employees are injured in transit, or conversely, if decisions made to protect personnel disrupt service delivery to customers and counterparties.

Significant business and supply chain interruptions are having direct financial fallout that will need to be managed, with plenty of property damage, as well. Wage and hour concerns will also pop up as businesses try to figure out how to get caught up. Companies are well-advised to be proactive in considering and safeguarding potentially applicable attorney-client privilege and attorney work product protectionsas they mitigate, assess and document their own losses, plus anticipate potential claims against the Company. Practically, that means the general counsel’s office and outside counsel may take a heightened role in recovery efforts compared to regular business events and operations.

Don’t forget the compassion in the haste to return to “normal.”

For Texans, last week was quite a week, one that seemed to collapse and expand time all at once. Many businesses are rapidly trying to catch up as their bedraggled personnel patch up their plumbing and wade through their backed-up inboxes and task lists. As with any crisis, there is both a physical and mental aspect to it, and businesses that respond with compassion for personnel, customers, counterparties and the broader community in which they operate will reap the benefits with a quicker return to normal, fewer hiccups along the way, and less potential blame for fallout. Communications during and following crisis should always be examined through a lens of compassion.

Invest time and effort in an after-action analysis.

Once crisis passes, it is human nature to want to move on as soon as possible. But, dedicating time afterward to put a cross-disciplinary set of heads together to surface and memorialize lessons learned and go-forward implications can go a long way toward increasing the Company’s resilience for the future. It’s not just about lessons learned, either; it’s also about opportunity spotting. The only constant about crisis is that it is inevitable, and those businesses that use each crisis as an opportunity to strengthen their organizations will fare best in the long run.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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