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How Law Firms Must Deal With Bad News in an Internet Age

According to this article, Gibson Dunn Linked to Wolfowitz Scandal (Law.com 5/16/07), a report by a special committee of The World Bank Group are questioning Gibson, Dunn & Crutcher's role in the scandal involving World Bank President Paul Wolfowitz's transfer of his girlfriend to a high position at the Department of State. According to the report:

Documents released by the bank show that Wolfowitz asked Gibson to review the deal [whereby Wolfowitz transferred his girlfriend] in the summer of 2005. A Gibson Dunn team, including Theodore Olson and Eugene Scalia, concluded that the contract was "a reasonable resolution of the perceived underlying conflict of interest." But on Monday a special committee of the bank charged with investigating the scandal concluded that the limited and after-the-fact review by Gibson "is squarely at odds with the high degree of ... concern for the interests of" the World Bank, which is required by the institution's rules. Gibson Dunn declined to comment.

Experts quoted in the article disagree as to the extent of Gibson Dunn's ethical culpability. Deborah Rhode, a Stanford professor, opined that those who believe that the transfer was a solution are "ethically challenged." On the other hand, Stephen Gillers at NYU said that much of the uproar in the case stems not from the conduct involved but rather from distaste for Wolfowitz's policies at the bank.

From Rich Klein's perspective at Riverside PR, what's worse for Gibson Dunn isn't so much its conduct in the scandal but, rather, its decision not to make a statement. Klein writes:

Instead of declining to comment, Gibson Dunn should have issued a statement. Any statement. It could have said: "Due to client confidentiality issues, we cannot comment on this matter". Or, even better, it could have said: "We stand by our work on behalf of Mr. Wolfowitz."  Or, "Like all matters before us, we treat each of them with utmost seriousness and with careful attention to ethics." Heck, the firm even could have pulled a line from its website that states the firm "is committed to excellence."

Klein concludes that in this day and age, "law firms of all sizes need to engage the media" rather than hiding under no comment. A law firm's reputation can be easily damaged by negative news, which can even replace a law firm's Web site as the top result on a search engine. At the very least, if people are going to discover what's damaging about your firm, you ought to ensure that they turn up something positive as well.

Posted by Carolyn Elefant on May 16, 2007 at 06:29 PM | Permalink | Comments (0)

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