Biglaw, General Counsel, In-House Counsel

Inside Straight: Delivering Bad News

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Several readers have sent e-mails asking for advice on how to deliver bad news to clients.

Here’s proof that, if ye shall ask, ye may receive.

Think first about the “bad news” that you’re delivering. You’re not a physician, so you’re not looking a person in the eye and explaining that he or she has just six months to live. That’s really bad news, and that’s hard to deliver. Your job is easy.

Even in the universe of bad news delivered by lawyers, if you’re working with a corporate client, you’re probably getting off easy. You’re not reporting to the client that “the Supreme Court just rejected the application for a stay of your execution” or “the appellate court just affirmed the conviction, so you’ll be doing the time.” The bad news that civil litigators are delivering to corporate clients just isn’t that significant. So calm down.

I’m also ruling out other bad news that folks deliver to, or receive from, in-house counsel. I’m not thinking about telling employees that they’ve been laid off or fired or delivering unhappy performance reviews. I’m not thinking about how you deliver bad news to your own law firm or to a court. And I’m ruling out situations where the bad news results from your own error, rather than an adverse decision by a court. (It’s much harder to tell a client, for example, “I blew the statute of limitations, and your claim is now time-barred,” than it is to tell a client, say, “The court denied our motion for summary judgment.”) So maybe I’m cheating here, by limiting the discussion, but the optimal way to deliver bad news will vary with the situation.

So what’s the best way to deliver news of an adverse judicial decision to a corporate client?

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I propose six rules:

1. The client must hear the news from you first. If the client hears the news from a Google alert or an e-mail from an old friend, you’re starting off on the wrong foot.

2. The news must arrive promptly. If you’d promptly call to tell the client that you’d just won the summary judgment motion (and you probably would, to share the moment of glory), then you should promptly call the client to say that you’ve lost the summary judgment motion (because the news is equally important and equally time-sensitive).

3. If at all possible, you should deliver bad news by telephone or in person. I understand that it’s easier to send an e-mail reporting the bad news, but that’s why e-mail (or a voicemail message, or a letter) isn’t acceptable. The worse the news, the more important to deliver it personally.

(I stuck the caveat — “if at all possible” — at the beginning of the preceding paragraph because sometimes it’s important to deliver time-sensitive news as quickly as possible, and that may preclude a personal communication. If you’ve called the client’s office phone, and asked the client’s secretary to track down the client, and called the client’s cell phone, and still can’t deliver time-sensitive bad news personally, an impersonal communication may suffice. Even then, though, I’d be inclined to explain in an e-mail why I was taking the coward’s way out: “I’ve just tried to call you on both your office and cell phones, and your secretary wasn’t able to track you down. We learned moments ago that we lost the motion for summary judgment in the Smith case, and I wanted to deliver that news to you promptly. Please call me at your early convenience to discuss this, and I’d like to schedule a call tomorrow, if possible, to discuss our strategy going forward.” Or some such thing.)

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4. Be clear and direct when you deliver the bad news. Beating around the bush doesn’t make life easier for either you or the client.

5. Do not sugarcoat the bad news: “We lost the motion for a temporary restraining order, and this is great! Now we can beat up on the other side in discovery, and they’ll still have the threat of a future defeat hanging over them.” You won’t fool anyone when you sugarcoat bad news, and you may well infuriate someone.

6. Propose a plan for dealing with the problem. If a client (or anyone) hears bad news, the client will naturally start wondering how best to live in the new, gloomy environment. If we resisted a motion to compel massive e-discovery and lost, then suggest how best to respond to the discovery quickly and at the lowest possible cost. If we lost a motion for summary judgment, then think about any possible appellate review by writ or interlocutory appeal and propose a road forward for handling any remaining discovery, devising motions in limine to limit evidence at trial, and planning for other upcoming events. If appropriate, you might suggest moving to reconsider, although sophisticated clients will often view that approach as throwing good money after bad.

There’s obviously a tension between delivering bad news quickly, on the one hand, and coupling the bad news with a plan for the future, on the other. But that tension is not insurmountable. You could think in advance about what you’d do if the court ruled against you on the pending motion, so you would already have a plan for the future in mind. Or you could deliver the bad news promptly along with a request for a longer call on the next day, which would give you a chance to collect your thoughts.

I don’t doubt that there will occasionally be exceptions to those six rules, but the rules strike me as a pretty good starting point. And any communication will naturally be tailored to the situation: It may be easier to deliver bad news on the heels of the good (“You knew our luck would eventually run out. We won the last six summary judgment motions, but I’m sorry to report that we just lost the seventh.”), or to a client with whom you have a long relationship or exceptional rapport.

But taking the coward’s way out — procrastinating before sending an e-mail that delivers the news obliquely — will never be the right answer.

Mark Herrmann is the Vice President and Chief Counsel – Litigation at Aon, the world’s leading provider of risk management services, insurance and reinsurance brokerage, and human capital and management consulting. He is the author of The Curmudgeon’s Guide to Practicing Law (affiliate link).

You can reach him by email at inhouse@abovethelaw.com.

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