When the CEO is witness: a framework

[TOP VERDICTS SUPPLEMENT]

Jurors admire CEOs, but they don't necessarily trust them. They understandably view a testifying CEO as uniquely positioned to answer for the actions of the company, to set and enforce the company's policies, and to exemplify the corporate culture. Extensive jury research shows, however, that jurors fundamentally view CEO testimony with great skepticism. Therein is both the reward and the risk of CEO trial testimony.

Most jurors do not live in the C-suite; they tend to be average wage earners with limited or no power in their workplace. They therefore do not fully appreciate the realities of what information actually finds its way to the CEO desk on a routine basis or how much control senior executives actually wield over the conduct of employees. Rightly or wrongly, in jurors' minds, the buck stops with the CEO. Jurors project their image and expectations of the top corporate executive onto the person who is on the witness stand and hold that person accountable, sometimes unreasonably.

That's fine, of course, if the CEO takes the time to learn the facts and documents of the case, understands the basic legal framework, and appreciates the gravity and context of his or her testimony. Tall order, but achievable -- assuming that the CEO devotes the time necessary with experienced trial counsel to prepare properly for deposition and trial. For understandable and some perfectly legitimate reasons, however, CEOs often do not prioritize proper trial preparation with trusted trial counsel, believing that jurors will naturally see things from their limited perspective and that the communication techniques that have led to their corporate successes will translate to courtroom effectiveness. All too often, enabled by their trial teams or in-house counsel who "work around" the CEO in preparing for trial, they fail to appreciate that the very qualities that made them successful -- the ability to take charge, to think "big picture" and ignore irrelevant minutiae, to outsmart competition, and to win in the board room -- also create tremendous risks. Positive trial outcomes can and do turn on the senior company witnesses conveying a compelling affirmative narrative as well as credible explanations for case weaknesses and troublesome documents. The converse is also true -- poor CEO performance on the witness stand can lead to losses and even catastrophic results.

But this is all just an argument for the obvious: getting sufficient preparation time with the CEO is critical. That hurdle may never be overcome, even with the cooperation and insistence of a trusted in-house team. If it is overcome, and assuming that time is precious, the following high-level advice regarding deposition and trial preparation can make the difference:

DEPOSITION PREPARATION

Trials are never won in a deposition, but they can be lost. For this reason, correct deposition preparation is essential to a creating a winning narrative using the CEO at trial. In addition to the obvious preparation items -- defining and refining the areas of witness knowledge and expertise, addressing the witness' concerns and any hidden agendas, clearly defining the witness' role, highlighting critical documents, and explaining the case and how the witness' testimony fits in -- it is important to convey to the CEO just how the deposition can and likely will be utilized at trial by the opposing side. Principally, it is used to impeach inconsistent testimony, limit the scope of what the CEO can say at trial, or generate a killer sound bite. How to limit such later use of a deposition? Here are four basic "don'ts" for the CEO:

Don't play dumb: Jurors expect CEOs to know the business and the areas on which he or she is being called to testify. While fashionable to coach witnesses (even CEOs) at deposition, if true, to testify that they don't know or don't recall particular facts or documents, the better course is to leave flexibility for trial. Easy example: instead of answering merely "I don't recall," add the following: "I don't remember as I sit here right now, but I could be shown documents that might refresh my recollection." Obviously, that tactic leaves the trial lawyer with flexibility to refresh that witness' recollection at trial and avoids the witness being boxed in. It also avoids the credibility pitfall of having a tongue-tied executive at deposition who is then charismatic and forthcoming in court.

Don't nitpick questions: Counsel needs to explain in deposition preparation that the deposition is not the CEO's chance to fight the case. Let the lawyer handle the quibbling, objecting to deposition questions based on vagueness, over breath, or the improper use of particular words. The CEO, after hearing an objection, should try to answer the question to the best of his or her ability and not fight with opposing counsel, despite every instinct do so. If opposing counsel is being particularly belligerent, make sure that the witness stays calm, avoids anger or impatience, and realizes that the second he or she engages in any extra colloquy, they are losing. Actually warn the CEO to use "best manners: no interrupting, no bad attitude, and avoid controlling behavior. Indeed, strive for consistent positive demeanor over time.

Don't volunteer, but do explain: In deposition, have the CEO provide explanations for answers. Have the witness, politely, testify: "the answer to your question is 'no,' but the reasons are..." This can avoid the deadly sound bite of a simple yes or no answer when read to the jury under the rule of completeness. This technique requires very careful planning and preparation. The witness' explanation must be consistent with the trial themes, documents and be fully accurate. And this is exactly the opposite advice of what the CEO should do on cross at trial, as explained below. A notable exception to this advice is testimony with respect to documents. While context can sometimes be supplied as to why a document was written or regarding events surrounding distribution, the words of a document really should not be challenged. Almost above all else, jurors do not credit testimony that conflicts with the written word.

Don't be trapped into casual conversation: A deposition must always be viewed as a highly formal process in which entirely new and different rules apply. Many CEOs fall into the natural trap of wanting to engage with opposing counsel in a "discussion" about the merits of the case and the reasons why their position is right. This is perhaps the most difficult thing to avoid. CEOs have every reason to believe that tactics which have been richly rewarded by success in the past will continue to yield success. Charm, wit, conveying gravitas -- those qualities manifested in deposition will almost invariably fail to translate to success down the road at trial. When in unfamiliar territory, like the legal process, a CEO will actually misapply familiar behavior, borrowed from the business world, until he or she understands that doing so risks failure. So the trick is to have the CEO walk the line of being responsive to questions, non-combative, genuine, but not overly familiar. It is uniquely the trial lawyer's job to make sure that this line is observed.

TRIAL TESTIMONY

Once the CEO deposition is "survived," and the case proceeds to trial, the focus shifts dramatically from avoiding loss to winning. And the CEO inevitably has a critical role to play. That role is leader -- plain and simple. While the jury will perceive the judge to the most important person in the courtroom, and the CEO must affirmatively acknowledge that, the jury will intuitively understand that the CEO is accountable -- to employees, business plans, banks, investors, trustees, the board, shareholders, and, most critically, to the public. That accountability needs to be embraced, while at the same time, trial counsel's task is to show that the CEO is a very human part of the corporate whole, not just someone who gives orders from the penthouse. The trial examination must demonstrate the CEO's command and acknowledgement of the key contributions and roles of others in the company, all the while taking responsibility for and ownership of the issues being tried. The basics of trial testimony can be imparted in trial preparation:

Agree on the fundamental objectives of the testimony. Keep those narrow and highly focused; be certain that trial counsel and the CEO fully understand each other and set mutual goals that are carefully planned and reviewed. Don't let the CEO carry any more water than absolutely necessary.

Create thematic safe zones for testimony on cross-examination that are fully consistent with the trial messaging. If the CEO is stumped on the stand, have a few highly practiced themes to which the CEO can revert.

Provide positive -- but candid -- feedback on the deposition performance and make sure that the CEO is thoroughly familiar with areas where vulnerabilities were exposed during the deposition process. This may be an exercise in damage control by showing the CEO how and why misguided strategies, aggression, or other deposition conduct will not work at trial and can boomerang on the witness.

Educate the CEO on any new case developments that occurred after the CEO deposition -- new documents and testimony about or involving the CEO, for example -- as the CEO should never be put in a position of being surprised on the stand at trial. This can include making the CEO fully aware of the key expert testimony in the case. Do not make the mistake of thinking that exhaustive deposition preparation can suffice for trial preparation.

Consider retaining a jury consultant if credibility is a significant question for a particular CEO and his or her testimony is sufficiently critical. Often an "expert" in jury perception can provide a needed gut check for both trial counsel and the witness on virtually every aspect of trial demeanor. The consultant can also serve as an effective vehicle for particularly candid feedback, providing a buffer that preserves the relationship between trial counsel and the CEO.

Keep it very simple when advising the CEO on actual testimony techniques. Have a script for direct examination preparation only, but never let the direct examination look scripted. Attempt to have the direct examination appear spontaneous and interactive, with the entire focus on the witness. On cross, the CEO should make every effort to answer only the precise question that is asked without providing explanations (note the contrast from deposition testimony). Try not to anticipate where the cross examination is heading -- rather, leave putting the pieces of the puzzle together for counsel. And save the explanations for re-direct, the purpose of which is solely to fill in holes that have been developed through adverse questioning by the opposing counsel.

In the end, as hard as it might be, it is the primary job of trial counsel to assure that a testifying CEO understands the importance of his or her testimony within the context of the individual case, and that he or she is enlisted to improve it. While it is always easier to avoid conflict with the CEO, doing so can be a disservice to the case. Time to prepare, trust in trial counsel, candor of trial counsel with the CEO, and a mutual agreement to testimonial goals both mitigate risks and set the table for a favorable verdict.

This article has been prepared for informational purposes only and does not constitute legal advice. This information is not intended to create, and the receipt of it does not constitute, a lawyer-client relationship. Readers should not act upon this without seeking advice from professional advisers. The content therein does not reflect the views of the firm.