In last week’s blog, we reviewed the dire circumstances faced by Kaye Scholer and Jenkens and Gilchrist that rendered the short-term survival of each questionable. Against significant odds, each resolved apparently unmanageable claims. But how? For both firms, the ability to face daunting claims yet live to another day is attributable to five key factors. In both cases:
Great Leadership Stepped Up. At Kaye Scholer, a highly regarded lawyer stepped forward with a solution that rejected the wisdom of a long-term fight with the government. As tough as that may have been for Kaye Scholer to forego clearing its good name, the solution placed greater priority on a fight for survival instead of a fight over the merits. Jenkens’ crisis lasted years, but it endured the slow drip-drip-drip of client claims through guidance from a steadfast leader universally respected for his honesty, candor and fairness. Notably, in both cases neither leader was the architect of the circumstances that created the crisis.
A Strong Culture Existed. In time of crisis, great leadership qualities are wasted if the rank and file are unwilling to follow. Kaye Scholer’s solid foundation came from decades of lawyering together. The lawyers that defined the firm’s culture strove to save what had taken years to build. Likewise for Jenkens. Although it had grown dramatically in the years prior to the advent of the crisis, it retained a core of like-minded professionals that were loathe to see their firm slip away.
A Good Plan Was Created. In both firms, leadership developed a plan for dealing with crisis and implemented it immediately. Kaye Scholer’s plan focused on removing the asset freeze. Once the freeze was lifted, the firm was able to function. Further, by resolving its issues with the government, it put behind it the controversy that had threatened its existence. In Jenkens’ case, however, its plan could not quickly resolve its crisis and involved an extended implementation period. The plan to settle with its former clients through a class action settlement required a commitment to stay on-task over a long period of time. But because the solution was something that the owners and employees could believe in, the time needed to implement the plan was bought.
All Relevant News, Good or Bad, Was Shared. The Kaye Scholer crisis was dealt with promptly. The quick resolution of the crisis allowed the delivery of welcome news that the firm’s assets were unfrozen. Not only did that news relieve tensions-it allowed payroll to be paid and benefits honored. Jenkens’ crisis lasted over an extended period of time and necessitated dealing with a long-running ebb and flow of good and bad news. It realized that while good news was far preferable to bad news, the absence of any news could be as problematic as bad news. Its commitment to keeping its people informed, even when there was nothing to report, smoothed out the peaks and valleys and maintained an even keel of emotions.
Hope Was Created. The combination of leadership stepping forward, having plans and communicating constantly, set in the back drop of a solid cultures, were key to overcoming crisis. These steps gave the owners and the employees a sense of hope for the future. Instilling a feeling that the crisis would pass and a return to normalcy was possible paid huge dividends.
Other “survivor stories” undoubtedly exist. What factors were critical in causing those firms to survive a crisis created by a catastrophic claim?”
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