Slater and Gordon CEO ‘may need to go’ in trust fix
Mumbrella checks in with communications veteran Peter Wilkinson on the crisis that engulfed law firm Slater and Gordon two weeks ago following the unauthorised leak of company-wide salary data and sensitive personnel information. Wilkinson says it will take years of brand building for the firm to regain trust, and CEO Dina Tutungi may have to go.
It’s valuable to frame the Slater and Gordon crisis via the recent Roy Morgan survey on trust and distrust. Reviewing the Roy Morgan presentation is well worth 20 minutes of communications professionals’ valuable time. Some key points:
1. It puts data around the cliché that you can spend a lifetime building trust and trash it in five minutes. In Slater and Gordon’s case, the trashing took a few days.
More relevant now for the legal firm is that it takes five years to rebuild your brand close to where it was before the crisis, according to the data. There are conditions, the main ones being that you have to do the hard work in the first nine months, and then keep at it.
This is consistent with our experience.
For S&G, following the damaging email send, the next nine months are critical. Typically, the two main stakeholders, staff and clients (current and prospective) will be considering options.
Dina Tutungi
2. A bit more on how the damage to brand materialises: In Wilkinson Butler’s experience one negative story may not damage a brand – journalists are not trusted to that extent. A run of stories, three or more, however, can do immense damage.
My first experience, now replicated many times, was with a large Australian retailer accused accurately on A Current Affair of misinformation. The first story did no detectable damage: after the third they lost $10m in sales.
One misstep that company made was ignoring our pleas to circulate their side of the story, if not on ACA, which carries risks, then via other channels.
S&G had several stories written about them and we can expect more, unless Trump and an election keep investigative journalists focused elsewhere. The scribes following the story are sticky and credible (Stephen Rice and Ellie Dudley at The Australian; Edmund Tadros and Maxim Shanahan at the Australian Financial Review).
If there is legal action, we can expect a trickle of negative S&G stories for many months, adding to the challenge of keeping staff and clients.
3. As Roy Morgan reminds us, you can no longer rebuild a brand with platitudes and clichés. It takes a credible thought-through change strategy and timeline that fits with contemporary values.
That includes being the kind of company where people want to work. Being purpose-driven is one factor, another is being led by a purposeful leader who people want to learn from.
Staff and clients like to see their legal firms getting positive stories in the media, almost as much as they dislike the opposite.
Note: There’s a minor challenge here for S&G because typically lawyers are combative, and a successful strategy needs to be empathetic. Not necessarily a big deal, but leaders everywhere need to be self-aware.
John Gordon in Papua New Guinea
4. S&G is/was an excellent company, which is an advantage. Like Qantas, there is a reputation to be rebuilt; we are not starting from scratch.
My first S&G experience was with then-solicitor John Gordon in the ‘80s. I was with 60 Minutes, and we travelled together to western New Guinea to investigate the damage to the Fly River caused by the upstream Ok Tedi gold mine and the impact on the subsistence farmers who relied on the river. John was purpose-led. BHP eventually pulled out of Ok Tedi.
5. Roy Morgan correctly says a fix is not as simple as sacking the CEO. True. However, as the CEO is responsible for the culture in an organisation, and at S&G the issue is apparently the culture, moving her on is certainly one option I would consider as part of a rebuild strategy.
In addition, salaries have been outed at S&G and CEO Dina Tutungi, apparently on around $690K, while not wildly overpaid, is on enough to create internal dissent. So, unless The Australian and the AFR are grossly inaccurate in their reporting, it reinforces that staff and clients may view the CEO as part of the problem.
I’m mindful of Corrs Chambers Westgarth’s experience with their highly paid managing partner, reportedly on circa $7m, and that firm’s reputation damage and the bleed of senior staff to other firms.
I’m also mindful that, generally, staff become aware of a problem in a company before management. So, the negative media simply cements their anxieties. Nine’s issues with staff abuse are a case in point.
Of course, getting rid of a CEO of a company of lawyers, expert in unfair dismissal, needs forethought.
6. You can stem the reputation bleed by removing part of the cause, but that’s only part of the fix.The hard work starts with designing a strategy and timeline. Roy Morgan’s data indicates a five-year recovery, which is consistent with our experience. Realistically, it means setting a strategy that is proactive for the first few months (Roy Morgan’s data indicates nine months). Removing a CEO is only one of a number of tactical considerations.
That early proactivity needs to be framed around excellence and nimbleness. Nine was slow off the mark and suffered.And no more missteps. Consider Qantas’s reputation-rebuilding setbacks, caused by the illegal sacking court case and the Frequent Flyer rewards scandal.
7. The rest of the five-year recovery timeline is repeat, review, refine, repeat, review, etc. The Roy Morgan presentation graphs show the five-year trend, consistent with our experience.That persistence is nothing more than what is required to build a company with a clear purpose and a strong culture — the kind of company people want to work for or retain as a supplier.
8. PS The Roy Morgan survey is great profile building for that company. Nicely done! Stay the course, and avoid a scandal.
Peter Wilkinson is chair of Wilkinson Butler and a crisis communications expert.
Certainly, the impact on staff morale and talent acquisition will be significant in light of this situation. However, as you pointed out, the brand’s history and origins could be leveraged to aid in its recovery.
Regarding future client impact, I believe that since firms like Shine, Maurice Blackburn, and Slater & Gordon primarily focus on class actions and workers’ compensation cases, this issue is unlikely to affect new client acquisition unless it gains broader mainstream coverage beyond The Australian and AFR—for instance, if it reaches A Current Affair.
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