The Kleiner Perkins litigation shows there is more to a case than a favorable jury verdict.
A former general counsel recently asked me about the discrimination suit that Ellen Pao brought against her former employer, Kleiner Perkins Caufield & Byers.
Wouldn’t it have been easier to just pay her the demand, he asked, rather than go to trial and risk the damage to the company’s reputation? Now, one of the oldest venture capital firms in San Francisco, he said, will have to spend time and resources repairing the damage done by Pao’s legal team.
The decision on whether to go to court or settle is a delicate one. General counsels are cautious by nature. I have been in far too many meetings where I have seen executives and others disregard mock jury results, evasive depositions, and ugly emails because the plaintiff had done something so egregious that s/he had crossed a point of no return. “If you agree to one settlement, then you will have to agree to every one that comes after and I don’t want to live like that,” an executive once told me. These are emotional discussions and the decision to put the company brand at risk usually boils down to principle.
Kleiner Perkins decided the evidence was strong enough to fight the suit instead of settling. Perhaps they also viewed a settlement as a public admission of guilt. No matter what lawyers might suggest, we all know that few settlements remain secret for long. San Francisco and beyond would have been abuzz if Kleiner Perkins had simply written a check to Ms. Pao. Perhaps the partners figured that the benefits of appealing to a jury outweighed the chance of negative publicity. I have been in this situation countless times.
If you’re going to court, then make sure your legal and communications team work closely together. Your lawyers may object, citing attorney client privilege. But insist on it. Make sure you have someone on the communications team who will study the evidence; understand when it will be presented, and what it means to the public.
If you have decided to go to court, then this veteran recommends the following steps:
Communicate frequently to your employees throughout the trial– The media will attempt to define your issues in terms that you may not like. The press may even appear to be sympathetic to an employee who you believe has done terrible things. Stick to your messaging. Use your communication channels to reach out to your employees, customers and vendors before, during and after the battle.
Prepare ahead of time for tough testimony or damaging emails – It is key that you provide your own context so your opponent’s version is not the only narrative out in the public sphere. If you implement changes, document them for everyone to see. A company’s culture is more than one poorly worded email or one unhappy employee.
Establish a site dedicated to the issue – Many wire services and newspapers struggle to cover civil courts. Budgets are tight and there is an editor on the other end calling for copy. Don’t be offended if the reporter misses your key testimony. Make sure your legal team provides court transcripts. You may even work a deal with the stenographer and post them on a dedicated web site.
Stay on message – You have a major investment in a company or career that is under attack. Don’t allow a burst of anger to define your legacy. Stay calm and keep reciting your talking points.
A trial is not fun. But it can lead to a stronger company. As Ben Horowitz said in his excellent book “The Hard Thing About Hard Things: Building a Business When There Are No Easy Answers”: “Sometimes you need to go war.”