Read a Q&A with Florida Attorney General Pam Bondi on some of the ways her office collaborates on key intiatives with state AGs, other regulators and the private sector.

Learn more about whether to settle AG actions in this article's online exclusive companion.

The tobacco litigation of the mid-to-late 1990s wasn't the first time state attorneys general had worked together, but it was a seminal point for them. In 1998, AGs from 46 states signed a Master Settlement Agreement worth hundreds of billions of dollars with the four largest tobacco companies in the U.S. (four other states reached separate agreements), and it became clear how effective state AGs could be when they coordinated on multistate investigations and actions.

Today, state AGs are a force unto themselves and constitute another layer of regulation companies must regularly contend with, particularly in areas that affect consumers. (See not only the tobacco settlement but more recent state AG settlements stemming from the mortgage crisis, off-label pharmaceutical marketing and e-book price fixing.) It is therefore vital that companies build relationships with them—reacing out to put a face to their name and educating AGs about the issues businesses and industries face should now be a part of every company's business, legal and government-relations strategies.

“If you're a large company and a consumer-based business, it's likely that at some point you will have to deal with an attorney general's office or possibly all 50 AGs. You should not put your head in the sand,” says Lori Kalani, a partner in Dickstein Shapiro's state AGs practice. “If you find yourself faced with an AG subpoena you sh ould consult with an AG expert, much the same wa you would consult with a securities expert if you had a securities investigation.”

Below, the private-practice lawyers who work with AGs regularly—including a number of former AGs and their staff members—reveal what companies must know to manage the modern regime of the state attorneys general.

They collaborate closely:

Information-sharing among AGs and their staffs has long been an important part of their operations.

“When I was a first assistant AG, it very much helped to see what other states were doing and the problems they were encountering. You could see how they addressed those problems rather than reinventing,” says James Carroll, who was an assistant attorney general in Illinois for 15 years under four different AGs, starting in 1981.

Carroll, now a principal at Much Shelist, says coordination between the states was important then and has grown substantially since. Today the multistate approach is ingrained in AG's offices. The nature of business means that a company's operations rarely yield effects limited to just one state. Working collectively on their own or through the National Association of Attorneys General (NAAG), AGs have developed procedures and protocols so that the facts and details of an investigation in one state can quickly reach the attention of AGs and their staffs in other states.

When companies face a state inquiry or action these days, they should brace themselves: Other states are likely to join in. (One potential upside to AGs' tendency to collaborate is that companies will now effectively face a single investigation or action from the participating states rather than numerous separate actions—although the force behind the group action will be greater.)

“There are close communications and close and effective working relationships between AGs around the country, and particularly between their staffs, either directly or through NAAG,” says Gerald Pappert, a member of Cozen O'Connor who was the attorney general of Pennsylvania from 2003 to 2005. “Isolated actions by one AG are less and less common.”

The powers of state attorneys general also are broadening in the federal arena.

“Federal lawmakers are granting the AGs additional powers. A few examples are the Consumer Product Safety Act and Dodd-Frank: both recent bills that passed Congress included authority for AGs to enforce federal laws,” Kalani says.

The growing power of state AGs means that forming relationships with AG's offices is vital. Some large companies will have a sustained presence in every state and will be able to maintain good ongoing relationships with each AG. On the other extreme, some businesses' operations may have a clear concentration in only a few states and establishing contacts in those states will become their focus.

Most companies have to face the possibility of dealing with all 50 AGs from time to time—and it's a difficult prospect, if not impossible, to maintain relationships with all 50 offices.

“Most companies are forced to react to circumstances as they present themselves,” says Kent Sullivan, a partner at Sutherland Asbill & Brennan and a former first assistant attorney general in Texas. “In that case, it makes sense to at least be aware of the practitioners in the various states who do have good relationships with the various state AGs. That may allow you to access high-quality insight without being a part of your permanent staff.”

They're accessible:

The good news for companies is that state AGs generally operate closer to the ground than other regulators—they have offices in the communities they serve and are open to hearing from the people and the businesses in their state.

NAAG meetings are a key way for companies to connect with AGs. They tend to have a town-hall atmosphere.

“NAAG meetings are an open interaction in the AG world,” says Mike Turpen, AG of Oklahoma from 1983 to 1987. Turpen now is a partner at Oklahoma City law firm Riggs, Abney, Neal, Turpen, Orbison & Lewis.

“The mistake people make is that they fail to participate in this process that is readily available to them,” he says. “You can tell your side of the story, and the AGs are available, accessible and willing to listen. You learn what's important to them and along the way you meet the AGs and their staffs.”

Former AGs and the lawyers who work frequently with their offices overwhelmingly agree that most AGs are happy to sit down with company representatives to hear about how they do business and the problems their industries face.

“I consistently find there is no reluctance,” says Barry Halpern, a partner at Snell & Wilmer. “Usually they are much easier to deal with—they're more direct, and they can solve problems more directly and simply than most other agencies and certainly more easily than the federal government.”

They're bipartisan:

State AGs don't just reach across the aisle—in their multistate inquiries they tend to do away with the aisle altogether as they work together to litigate aggressively and reach solutions for their states. Their bipartisanship has allowed state AGs to avoid political gridlock and to push toward real action more easily. In that sense they fill the void where the federal government fails to act—while it's tough to get anything passed in the federal legislature right now, AGs routinely and collegially work across party lines to make things happen.

“Predatory lending, the tobacco settlement, the mortgage crisis resolution—these are all things the AGs have done together. They think in terms of right and wrong, not right and left,” Turpen says.

Writing off the actions of AGs as politically motivated underestimates the integrity of the office of the attorney general and of the AGs in office, Halpern says. “The 'everything is political, so why bother' assumption is a very shortsighted view.”

That's not to say that AGs are a homogenized group—each will have his or her own approach, priorities and attitude, and companies must take such nuances into account to fully understand who sits on the other side of the negotiating table. And that does include taking political parties into account.

“You have to consider how aggressive a particular AG is and what their outlook is on issues of free enterprise and the private sector—it's just a fact that different political figures … can have different views of businesses and corporations, and you have to take those into account,” Sullivan says.

They have broad discretion:

It doesn't matter how strong a relationship a company forms with a state AG's office—if an AG becomes aware of misconduct over which he has jurisdiction, he is going to do his job. That relationship can, however, facilitate solutions and the implementation of best practices, Turpen says. A pre-existing connection makes it far more likely that before an AG's office issues a formal subpoena, for instance, it will first reach out informally to the company in question and allow it the chance to talk about what's going on and how the company can address it to the AG's satisfaction.

“AGs have broad discretionary power. If businesses have a relationship with the AGs, when problems arise they have the opportunity to craft [with the AGs] a creative solution before a formal investigation even begins,” Turpen says.

In that sense, AGs effectively have a chance to formulate policy through their agreements with companies without the need for legislation. In the multistate tobacco settlement, for example, companies not only paid up, they also agreed to change their marketing practices, fund smoking-cessation campaigns, disband industry trade groups and operate with more transparency.

“In my experience attorneys general are as interested in prospective relief as retroactive remedies, perhaps more so,” Kalani says. “Companies are often forced to change their business practices as a result of an AG investigation. There are solutions that companies can craft that include compromises that benefit their business, their customers and AG offices.”

They want­­—and deserve—respect:

Over and over, former AGs and the private-practice lawyers who routinely work with them stress that companies must treat them with respect, even when dealing with them from an adversarial standpoint. Don't needlessly inflame AGs and their staffs by diminishing their work or their motives, Pappert says.

“That's not to say you can't stand your ground, draw a line, and defend and represent your company—of course you have to do that,” Pappert says. “But so many times you would see a counterproductive public response attacking an AG or group of AGs for being 'politically motivated' or what have you. Sometimes companies think it feels good to take a shot at the AG or at the staff, but it's never productive.”

Treating AGs with respect can go a long way toward both creating a relationship and helping them to trust that you understand the issues and are ready and willing to work out a resolution, Carroll says.

“Every attorney in government at some point in time runs into a situation where they have an attorney that's unreasonable and doesn't treat them with respect. They could be demanding, and strictly one-way in how they approached the AG,” he says. “When I went into private practice I made a concerted decision not to approach government lawyers that way because I had been one for such a long time.”