4.10 Client-Centered Counseling and The Institutional Client

How does one counsel the corporate, government, or institutional client? Client-centered autonomy based model that gives weight to an individual’s social, psychology, and moral values seem out of place.

How does a lawyer befriend an organization? So delegation based on fiduciary relationship seems to be in order. Still the assignment comes from individual officers and managers. What will protect the institution from either the unconscious biases of either the lawyer or the institution officer or spokesperson?

In these situations, while an officer or manager may speak for the institution, the client is bigger and more diverse in its interests and risk preferences than the one officer who is speaking for the client. In these situations, it is not the officer’s feelings, risk preferences or morality that ultimately governs the situations outcomes. Is the lawyer free to impose his own economic preferences and moral code on forming the legal strategy? What is a client-centered counselor to do where the client has “no butt to kick, and no soul to damn?”

Expert litigation consultants have developed a set of decision making principles or factors to help guide them in building a consensus where there may be a division in interests between the officer, the lawyer, and the institution.

Medical professionals and institutions are in analogous situation with patients. Just as a surgeon may prefer to cut on a patient, and hospital to recommend extended hospital visits, the Hippocratic oath is all that protects the patient from the doctor’s preferences and biases. The field of bioethics has been created to develop bioethical principles to guide doctors, hospitals and patients in their decisions. Similarly, lawyers need to create a set of principles or factors to help guide the client in forming the appropriate strategy or treatment plan. This approach borrows its structure and framework from moral philosophy.

On a meta-ethical level, ethical systems can be classified as teleological (or rule based systems) or utilitarian (or principled based systems). In their extreme, rule based decisions are critiqued for their lack of flexibility and individualization, and principled based systems based on abstract obligations to do good and do no harm are criticized for there inconsistent and self serving applications. One way to integrate the two is to develop a rule utilitarian model, or one that sets up rules in the service of the greater good. Such a principled based system seems to be most useful for professional counseling where autonomy is de-emphasized either because the client is in crisis, or where the client is an institution. In these situation expert experience is particularly useful, and can draw on experience and insights to develop rules or principles that can best serve the institutional client. Using these rules, reference points or principles to guide the decision, keeps the decision from being hijacked to the benefit of one of the particular players in the decision-making process.

One set of rules that operate nicely along side the litigation process for the institutional client are as follows:

Peace first

Lowest cost to execute

Simplest to execute

Least public exposure

Deanne Siemer of the Wilse Group, Washington D.C., (an expert at advising institutions with major litigation problems) describes the principles this way,

Peace first	^{Many clients like their lawyers to be warriors, but “peace” options should always be considered thoroughly before any “war” options are used. This comes under the general principle of “Don’t make the problem worse.”}
Lowest cost	^{The lowest-cost option deserves the hardest look. The cost of legal matters tends to escalate and cost estimates tend to be optimistic. Most clients would rather spend the marginal dollar on their business or personal matters rather than legal contests.}
Simplest to execute	^{Execution of legal strategies is always risky because few clients have extensive experience in managing legal matters, so they are likely to be difficult for the lawyer to control. The option that is simplest to execute is often the least risky.}
Least public exposure	^{Most companies and individuals operate largely out of the glare of public opinion and, for that reason, they tend to ignore or underestimate the costs of publicity and adverse public opinion in legal matters. Avoiding public exposure where possible avoids a risk that may have unknown proportions.}

These rules are important to winnow down the options that the spokesperson or officer of institution should be considering. It assumes that they will put the institutions interests above their own and it keeps the immediate decision maker on track to head in a satisfactory out come for the institution.

How might these principles shape the counseling session with an institutional client’ representative. Deanne Siemer takes the rules she uses in guiding her decisions with clients and makes them the foundation of a counseling chart. Combining these rules with a mathematical weighing system she gives some suggestions that make for a detailed and wise analysis for forming a legal strategy with an institutional client.

Siemer uses the Homestead problem, Part I, as an example:

When applying the general rules for comparative purposes, using a numerical rating rather than descriptive words usually yields a better result. What one person means by “low” may be quite different from what another person means by the same word. However if a scale of 1 to 5 is applied, with 1 as the lowest score and 5 as the highest, the total score usually is a good reflection of the comparison.

A matrix listing the options on the vertical axis and the general rules on the horizontal axis will permit ready comparisons. Use numerical ratings ranging from 1 to 5 or 1 to 10, depending on how many options you have. If there are relatively few options, a 1 to 5 scale should suffice. In this case, we have twelve potential options, so a scale of 1 to 10 might be better.

Each option is ranked relative to each other option with respect to one of the general rules. Using scores in a matrix is not to suggest that there is a “right” total score; only that a rough scoring can weed out some options as compared to others. The purpose of the matrix is to answer the question: “Compared to what?” So, for example, with respect to the general rule favoring “least adverse public exposure,” the question is which of the options is most likely to generate adverse public exposure. Litigation is a very public option, so one might give it a low score in this regard. Then the question is what option is the least likely to get public attention. The informal mediation and informal persuasion options tend to be very private if handled properly. They might seem less likely to draw adverse attention than the other options. Then other options are compared to the best and worst and among themselves. The question is whether this option is more, less, or equally likely to generate adverse public exposure than some other option.

Here is an example of a matrix. A rating of 1 indicates no compliance with the general rule. A rating of 5 indicates very good compliance with the general rule. Higher total scores indicate better options.

One can (and should) argue in your team about the relative scores. This is a way to examine assumptions, compare ideas, and stimulate creative thinking about the problem. In simplified form, using part I of the Homestead case, (Homestead worries that A-Best Homes is engaged in product disparagement of their homes, saying that they are termite infested,) the discussion might be something like the outline below.

Sue	^{Litigation is not a peaceful solution; it is not a low cost solution; it is rarely simple to execute because the client has control of only its part of the process; there is a great deal of potential public exposure, particularly where electronic filing is used because all records are not only publicly available but completely searchable.}
Demand letter	^{A demand letter asks that the derogatory statements be stopped and threatens to sue if they are not. A demand letter points to litigation, so it is not a very peaceful solution although the letter itself does not initiate any litigation. A demand letter itself is relatively low cost, usually only the time of the lawyer to write it and the time of the client to approve it. However, a demand letter may require additional research into the law or facts, and often leads to a reply and further replies, thus multiplying the cost. It is simple in initial execution; most lawyers have form letters for this sort of thing. However, the follow-up may not be so simple. A demand letter holds some potential for public exposure as it may be delivered by the recipient to others.}
Sell	^{The option of selling the business is probably a relatively peaceful solution, but it may entail considerable expenses and is not simple to execute. There is some risk of adverse public exposure because of due diligence on the part of the buyer.}
Convert to condos and sell	^{This is like the option of selling the entire business but more complicated. The cost may be higher in the short run; and the public exposure is likely to be greater because of the risks involved in dealing with individual apartment dwellers.}
Spin off	^{This option establishes a new identity for the Florida-Georgia apartment rental part of the business, but does not remove the problems from Homestead which would remain the owner of the separate business entity created in the spin-off process. A spin off is less complicated and costly than other corporate options, but it can attract public attention as it appears to be a corporate maneuver and encourages speculation as to its “real” purpose.}
Joint projects with A-Best	^{This has the prospect of being a peaceful solution and could be the best possible outcome depending on the terms and commercial viability, all of which are unknown. The cost of devising and negotiating a joint project might be considerable because this is quite a complicated solution, probably at least as complicated and perhaps more complicated than selling.}
Go negative	^{Negative advertising criticizing A-Best is not a peaceful solution, and it generates a very public controversy. It entails cash outlays for the advertising content and media placement, and has some difficulty of executing well.}
Go positive	^{Positive advertising extolling the virtues of Homestead’s housing is a fairly peaceful solution. It has about the same cost and difficulty of execution as the negative advertising would, and it could generate counter advertising by A-Best which could create adverse public exposure.}
Change management	^{Changing the management company to improve conditions at the apartment complexes and thereby reduce adverse comment is a peaceful solution as far as A-Best is concerned, but could create some difficulty with the management company that is being fired. It may be a low cost option that is simple to execute if there are competing management companies available to take on the assignment and the contract with the existing management company allows Homestead the flexibility to change.}
Informal mediation	^{Informal mediation is a peaceful option if the mediator is skilled and experienced. It is relatively low cost, although good mediators can have fairly high hourly rates. In some cases informal mediators do not charge for their services. For example, a trade association may help mediate disputes among members. A mediation might take only half a day, in which case the mediator’s fee may not be a significant expense. Mediation is normally entirely confidential and has almost no risk of public exposure.}
Informal persuasion	^{Informal persuasion is usually a peaceful option if handled skillfully. It is a relatively low cost option, particularly if someone from the company is the person selected to carry out this task. Making an overture to persuade is usually simple to execute and carries little risk of adverse public exposure.}
Do nothing	^{Doing nothing is a peaceful option. It is a low cost option because the lawyer and client are basically waiting to see if anything further happens. Whatever damage has been done by the prior statements may entail costs, but if no further statements are made, there is no additional cost incurred from this option. It is simple to execute, and has low public exposure.}

This comparative analysis suggests that suing A-Best, based on what we now know, is a “worst” option and should be the first to be discarded because there are other viable options. This is almost always the case. Litigation is expensive and risky. It may be the end game of the strategy if the client absolutely must reach an objective that ultimately can be had only by successful litigation. That is most likely not the case here. Homestead can operate its rental units in the face of A-Best’s criticisms, although that might be more difficult and expensive than if A-Best stopped its derogatory statements.

The option of “going negative” might be discarded at this stage as well, as it has significant downside risks (war-like option and considerable public exposure).

The transaction oriented options also seem relatively less desirable because they probably involve significant cost and would be more difficult to execute than some other available options.

The matrix exercise has allowed the strategist to discard four or five of the options.

In the words of that great sage and songwriter Kenny Rogers:

Every gambler knows The secret to surviving Is knowing what to throw away And knowing what to keep

‘Cause every hand’s a winner And every hand’s a loser … ¹²

4.10.1 Focus on The Risk of Being Wrong To Select The Best Options

There may be no one “right” answer as to the strategy to be followed; however there is almost always a right answer about the relative amount of risk that is involved with a particular strategy option compared to other available options.

Most inexperienced lawyers are too optimistic in making judgments about risk in a legal strategy situation. For that reason, it is a good idea for the lawyer to (1) think about the downside; and (2) express opinions in terms of numbers, not words like “good,” or “pretty good,” or “likely.” Using numbers ensures that the participants in the development of the strategy all understand each other.

Here	^{With respect to the current situation, how much risk is there that we are wrong on the facts. There are certain facts that are key to a particular option being the right route to the desired outcome. What is the relative risk that we are wrong in what we now know?}
There	^{In this case, assume the client’s objective is simply having A-Best make no more adverse statements. With respect to the desired outcome, how much risk is there of not getting to that outcome in following a particular option?}
Time	^{How long is the option likely to take? Is this option within the client’s available time? In a situation such as this one, where the time constraint may be flexible, ask what is the relative position of each option with respect to the time it might take to get to a resolution.}
Resources	^{What is the option likely to cost? Is this option within the client’s available money? What is the relative risk with respect to the amount of investment that will be required by the client to carry out this option? This factor includes the amount of legal research potentially needed to ensure that an option is either available or executed correctly.}

Create another matrix and write out a comparison of the remaining options. This matrix assesses fewer options, so its ratings could be on a simpler 1 to 5 scale. You may not get the numbers right in the absolute sense, but you probably will get the relationships among the options right. This is also a good vehicle for lawyers working as a team to pool their views. And it provides a good outline for explaining a strategy to the client. (The matrix itself is not often used with the client, but having worked through the matrix, the lawyer’s explanation is usually more organized.)

Here is a sample risk matrix. A rating of 1 means relatively little risk; a rating of 5 means quite a lot of risk. Low total scores indicate better options. Note that this risk matrix works in the opposite way (low score means better option) than the general rules matrix (high score means better option). The reversal of the scoring helps stimulate careful thought.

Informal persuasion	^{The risks with respect to informal persuasion seem relatively low. While there is some risk that this option will not be effective in getting A-Best to stop making derogatory statements, that risk seems lower than most of the other options. A skillful effort at persuasion probably presents less risk than doing nothing, and probably presents less risk than mediation in which the two sides confront each other in a framework designed for disputes. The time and money risks are lower than other options. Informal persuasion would not necessarily involve legal time.}
Do nothing	^{There is no commitment to any particular facts in the “do nothing” option, so there is relatively little risk with respect to the facts being wrong. There may be a higher risk of a bad outcome, however, if a totally passive option is selected. No time or money will be expended in this option (except to monitor the situation), so there is basically no risk of being wrong as to those factors.}
Mediate informally	^{In mediation, there is more commitment to a particular version of the facts, and therefore more exposure if the facts are wrong. Informal mediation is a low risk option with respect to a bad outcome because a skilled neutral party tries to help achieve a workable outcome for both parties. The time and costs of mediation are usually well-defined because the process is short and participants are limited.}
Change management	^{Management may have nothing to do with the underlying causes of the derogatory statements, so the option to change management presents a relatively high risk of not achieving the desired outcome. On the other hand, new management might mitigate the damage from any derogatory statements by active work at good relations with tenants. The relative risk of being wrong about the time and expense of changing management may be considerable, particularly if Homestead has never done this before.}
Spin off	^{A spin off would separate the Florida/Georgia business from the rest of the company, but may be too late to insulate Homestead (the main company) from the risk of tenant litigation or regulatory fines. Therefore, compared to the other options, the risks of not achieving the desired outcome, and spending more time and money than anticipated, appear greater. Some additional legal research might be needed to support a spin off option, depending on the firm’s experience in this area.}
Demand letter	^{A demand letter might provoke A-Best to retaliate, which would mean that the desired outcome might be farther from Homestead’s reach than under other options. A demand letter requires Homestead to take a firm position on the facts (and, by implication, also the law) which involves more exposure to the risk of being wrong on the facts. A demand letter looks to litigation as the end game, and litigation seems impractical here.}
Go positive	^{Positive advertising has some risk of being wrong on the facts. If Homestead advertises “resistant to hurricane-force winds” for example and that is not true, the company could have multiplied its problems by creating false advertising. Positive advertising also does not get at the root of the problem directly, if A-Best is making derogatory statements; it attempts to mitigate the damage from those statements.}

Positive advertising has some risk of being wrong on the facts. If Homestead advertises “resistant to hurricane-force winds” for example and that is not true, the company could have multiplied its problems by creating false advertising. Positive advertising also does not get at the root of the problem directly, if A-Best is making derogatory statements; it attempts to mitigate the damage from those statements.

It is important to emphasize that there is no magic in any particular rating. The effort is to assess relative risk when picking among viable options. The matrix provides a vehicle for asking, “Is this option more risky than these other options with respect to this single factor?” A low number is less risk.

For example, with respect to the risk that the time estimate is too short, the options of changing management and spinning off the apartment complex business present the most unknowns at present, and thus the most risk as to that particular factor. The demand letter may create a long chain of accusatory correspondence and generating the positive advertising may take longer than now anticipated, so the time risk, while less than spin off or changing management, could be significant.

In this case, the strategist might conclude that while the spin off, demand letter and positive advertising options are viable, they have higher relative risk than other options. For that reason, the strategist might look first to the remaining options in fashioning a strategy.

4.10.2 Assemble The Best Options into A Process

Strategy is a process. The process identifies a starting point and, if the actions proposed as the starting point do not achieve the defined objective, then the process continues with a second move, and so on. For this reason, the strategy may incorporate a number of the available options.

The features of this principled approach to forming legal strategy are obvious. It has integrated many features of the client-centered, delegation, and friendship model into a practical set of factors that can frame the choice to institutions client representative. It provides information about the economic, social, and psychological consequences of decisions and assumes the institution will favor a risk adverse, cost effective, simple and humble solution. It also balances out the litigator’s tendency and preference to want to go to war.

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Source: Zwier Paul J. Legal Strategy. Wolters Kluwer,2015. — 190 p.. 2015

4.10 Client-Centered Counseling and The Institutional Client

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