State attorneys general have been involved in some blockbuster settlements over the past decades, including a 1998 Master Settlement Agreement with tobacco companies and, more recently, deals related to the mortgage crisis, off-label drug marketing and more. Recent regulations such as the Dodd-Frank Wall Street Consumer Protection and Reform Act and the Consumer product Safety Act have given state AGs even more enforcement power.

Given this, it's in every company's best interest to cultivate a relationship with their state AG's office. By building personal ties with the office—and educating AGs about concerns affecting businesses—in-house counsel may be able to mitigate the risk of enforcement actions or inquiries. In InsideCounsel's July issue, experts—including several former AGs—weigh in on how corporate attorneys can work productively with their local attorneys general offices.

What are the benefits of building a relationship with state attorneys general?

Because AGs have broad discretion when launching investigations or actions against companies, they may be willing to work with companies to come up with collaborative solutions to misconduct. In the tobacco settlement, for instance, companies agreed to change their marketing practices, give money to non-smoking campaigns and more.

What's more, if a company has a previous relationship with an AG's office, officials may be more likely to reach out informally to a company to discuss regulatory concerns, rather than immediately issuing a formal subpoena. “In my experience attorneys general are as interested in prospective relief as retroactive remedies, perhaps more so,” says Lori Kalani, a partner in Dickstein Shapiro's state AGs practice.

How much do state AGs collaborate with each other?

Quite a bit. Through the National Association of Attorneys General (NAAG), state AGs can easily share information on investigations or best practices with their counterparts in other states.  This collaboration can spell difficulty for companies if an AG action in one state prompts other states to join in on the inquiry, but, on the plus side, companies may face one consolidated action rather than multiple lawsuits.

Large, multi-state corporations that find it difficult to build personal relationships with AGs in all 50 states should take at least some steps to maintain ties to those 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.”