Let’s begin with three generalizations. First, most CEOs and board leaders say they want to know about bad news before they read it in the papers. It is a principle that is taught in leadership boot camp 101. No surprises. Second, in reality, most CEOs and board leaders like to hear about good news and don’t, in fact, like to hear about bad news. They have a strong self-interest, reinforced by their PR advisors, to trumpet successes and achievements, and it does not serve this purpose to hear about problems. Further, if the lawyer is relentlessly negative, the client will stop listening. Third, it is a lawyer’s responsibility to keep clients informed of the unblemished truth, good or bad. Identifying and communicating risks and red flags and, yes, losses and failures, is part of the job. Stuff happens, and it is the lawyer’s job to give it to you straight.
So, how should college or university leaders and their lawyers balance these competing principles? I offer several strategies for consideration by both lawyers and clients.
1. When lawyers communicate bad news, they should offer solutions or mitigation efforts at the same time. Lawyers are often in the best position to be problem solvers. In a college or university setting, this may mean recommending changes in institutional policies (regarding, for example, Title IX, human resources, tenure, research compliance, athletics, DEI, student conduct code, freedom of expression, governance, financial controls) that address the weaknesses or failures or just life and chance that led to the bad news.
2. The client should take ownership of the bad news and welcome suggestions for improvement. Ignoring or spinning it for PR effect can make a bad situation worse. Whether the bad news is a loss in a student or faculty lawsuit, a government investigation, a controversy over free speech, or misconduct by an executive, the institution may put itself in the best light by accepting the bad facts and explaining what it plans to do about them. Constructive and remedial engagement—even when the institution suffers short-term reputational harm or itself feels aggrieved—rather than defensive denial, is frequently the best antidote and allows the institution and its lawyers to control the situation. If, for example, the institution enters into a resolution agreement that provides for continuing government oversight, it should promote the improvements the agreement will bring. If the institution is found to have violated the law or an individual’s rights, it should explain what curative changes it will or has made.
3. Clients should be educated on the lawyer’s role and why the lawyer needs to report bad news. Lawyers deal with crises and controversies, adversarial claims, conflicts between constituents, and reputational harm. For all such matters, clients need to know the facts so they can make decisions in the best interests of the institution. Lawyers should not screen out information the client needs to know just because the client may prefer a happy face. And senior leaders and board members owe fiduciary duties to the institution that they cannot fulfill if they only hear things that make them feel or look good.
4. Lawyers should consider putting the information concerning bad news in a proper academic context. They should connect the information to the mission of the institution. Clients should ask for and lawyers should explain the “why” of their communication, even when it is hard to hear.
5. Reporting on bad news is part of the broader issue of what information counsel and other administrators should report to the CEO and the board (which are different). Institutions should consider developing policies that identify the criteria for such reporting. At the end of the day, decisions about reporting up and out (also different) are matters of good judgment, but counsel, senior executives, and board members can avoid miscommunications and unwelcome surprises if they discuss, in advance, the kinds of information that should be reported up the chain of command. Communication about legal developments, including bad news, is part of good lawyering and good governance.
Steve Dunham, JD, is the vice president and general counsel for Penn State University.
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