When it comes to managing bad news, the smartest folks are usually the attorneys. A lesson in managing bad news came last week from Barry Wolf, executive partner and chairman at legal firm Weil Gotschal & Manges. The firm released an internal memo announcing 60 junior-level and 110 staff layoffs, as well as ”meaningful compensation adjustments for certain partners ” – PR code for pay cuts.
Weil freely shared the memo with reporters, and the news received extensive coverage, including page one of the Wall Street Journal and the lead BusinessDay story in the New York Times. No one was surprised that Weil was committed to sustaining its $2.2 million annual profit-per-partner metric and while some lawyers lamented that the elite firms, known as “Big Law,” have succumbed to the realities of big business, the firm positioned itself as being ahead of the business curve, actively managing a business undergoing macro changes.
That’s a message its corporate clients understand all too well. Weil effectively neutralized most of the potential bottom-line impact that might have initiated a loss of confidence. Internally, the firm may have more work to do. Morale will continue to suffer as departures leave behind empty desks and lawyers reassess their careers, but for the outside world, the firm looks ahead of its peers.
THE PR VERDICT: “A” (PR Perfect) to Weil Gotshal & Manges for candor, transparency and proactive management of bad news.
THE PR TAKEAWAY: Address a difficult issue head on – before others do it for you. While this wasn’t a case of crisis management, it could have been a serious reputational blow if facts emerged slowly, forcing the firm to go on the defensive. Instead, Weil comes out a leader for addressing a difficult issue, laying out the rationale and taking careful action. Ironically, given that other firms are likely to follow suit, a management decision to shrink the firm enhances Weil’s leadership for both the long and the short term.