White-Collar Counsel Must Navigate Client PR Needs

WHITE-COLLAR COUNSEL MUST NAVIGATE CLIENT PR NEEDS

By Adam Kamenstein

When FTX founder Sam Bankman-Fried took the stand in his own defense in late October, he had little to lose but potentially much to gain. His cryptocurrency exchange had imploded, decimating the holdings of thousands of customers. Prosecutors had built an almost air-tight case against him, so testifying on his own behalf was a Hail Mary. Instead, it ended up being the final nail in a legal coffin for which he had already built the framework.

Criminal defendants rarely testify on their own behalf—the risks are great—but if their testimony is compelling and credible, it can sow just enough seeds of doubt among a juror or two.

But instead of hunkering down and waiting for the government to come after him once the FTX artifice collapsed, Bankman-Fried went on the offensive. He gave media interviews, posted opinions on X (formerly Twitter), and even attempted to launch an email newsletter. All of this provided fuel for prosecutors, who systematically subjected the defendant to withering cross-examination. He could not undo or unsay what he had already put in the public record, and this buried him when he tried to do just that.

Although the high profile of the FTX matter may make it an outlier, many white-collar defense attorneys face PR challenges when representing clients with any public profile. Where once there were editors weighing the public interest against the costs of ink and paper, in today’s digital universe publicity can be acquired cheaply, easily, and often undesirably. So, whether representing celebrities, politicians, business leaders, or others with significant financial or reputational assets, lawyers may find themselves in a delicate PR conundrum.

On the one hand, the client may have strong and legitimate publicity concerns: Their political future may be on the line; their business could suffer an irreparable loss of value; a career could be at stake; reputation and standing in the community may be at risk.

On the other hand, the attorney may have important concerns about allowing the client to actively engage in public relations: Will a public statement needlessly draw the attention of investigators when keeping a low profile is advisable? Will the client’s public positioning suggest hubris or arrogance that draws prosecutors’ ire or infects a juror? And, perhaps most importantly, will the client say something that leads to incriminating evidence or that provides fodder for cross-examination?

Most clients, after all, cannot be expected to appreciate how seemingly benign statements can come back to haunt them. Suppose, for example, a client is being prosecuted for injuring someone while driving under the influence: The client gives an interview to the local paper in which he says he couldn’t possibly have been intoxicated because he had only one beer at the bar. The statement may sound exculpatory to the client, but he may have just handed the prosecutor an admission establishing that he was, in fact, coming from a bar and had, in fact, consumed alcohol—facts the prosecutor might otherwise have been challenged to prove. One can easily see how the drunk driving example might be extended to a fact pattern concerning myriad white-collar issues: “I read the financials that contained the sales numbers, but that wasn’t my focus.”

It is, therefore, incumbent on the white-collar defense attorney to take a holistic view of the client’s PR needs. Protecting the client’s legal interests is fundamental, but business interests are important; community standing matters; and career prospects can be vital.

Early dialogue with the client about how to approach the PR process is critical. The lawyer’s understanding of what is at stake for the client, and the client’s appreciation of the legal risks, are crucial first steps to developing a mutually agreed upon approach that can serve as a lodestar for both client and lawyer as the case evolves.

In some cases, it may also make sense to onboard a trusted PR agency early so that the resource is well-informed, tracking the matter, and prepared to move quickly if called upon to do so. Often, merely having the conversation with the client and developing a contingent PR strategy is the only PR activity the client wants or needs.

Regardless of the particulars of any matter, an intentional approach with a 360-degree perspective is preferable to one that is ad hoc and reactive, and it is unquestionably superior to damage control for avoidable, self-inflicted harm.

Adam Kamenstein is a partner with the white-collar defense firm Adams Duerk & Kamenstein LLP.