Companies have always faced challenges in dealing with government regulators. Traditionally, those challenges were discrete and private — the company would provide as little information as possible to the regulator and hope the government either went away or could be persuaded to enter into a modest consent decree. The general counsel considered it a good day when the regulator stopped calling.

Regulatory challenges are no longer such a private affair. Today, they routinely spawn civil litigation, and executives face intense public scrutiny along the way. At the same time, competitors and plaintiffs' lawyers pressure Congress and the agencies for action, make trips to Capitol Hill, instigate grand jury investigations, incite media coverage, and influence public opinion in well-orchestrated campaigns. Agencies are not immune from these pressures and must respond to a public that has been empowered by an array of social media tools to voice their concerns. Enforcement is on the uptick, and agency consent decrees impose compliance programs that can impact business activities for years.

This new world of relentless public scrutiny and parallel regulatory and litigation challenges makes it hazardous for companies to pursue a strategy of “laying low” with the regulator, dribbling out information to starve the investigation, in hopes it will simply all go away. A far more proactive approach is required to deal with the array of potential adversaries that may confront a company. Forward-thinking companies are proving that two ounces of prevention can help balance the scales and yield substantial benefits in reducing overall risk and defense expenditure.

Engage proactively with the agencies to build credibility and “tell your story.”

Today it is the rare regulatory inquiry that plays out in secret. Increasing public scrutiny of regulatory actions forces regulators to be more proactive, aggressive, and media-savvy. An equally proactive and comprehensive defense strategy is required.

A recent case demonstrates the risks: When the Supreme Court permits a securities fraud case to proceed predicated on allegations of the company's failure to self-disclose to the FDA the adverse effects of a popular cold remedy, it is clear the game has changed.

Although companies may feel the U.S. regulatory scheme already is onerous, consumers (and the plaintiffs' bar) expect an even higher standard of care that exceeds regulatory obligations, industry standards, and even science. Knowing how to work within this environment starts with recognizing there is no greater opportunity to chart a winning strategy — one that protects business objectives, avoids unwarranted regulatory action, and halts runaway litigation — than in the first moments of crisis. Government officials are eager for companies to disclose information. The most savvy companies use this opportunity to get their message out first, answer critics, and prove themselves to be the most credible voice. Proactive, well-crafted disclosure not only can placate regulators if not turn them into allies, but the company's regulatory story will define its closing argument at trial, if needed, years later.

Take the case of one Fortune 500 company that suffered a data breach incident and failed to notify regulators proactively. Once the regulators learned of the event — months after the fact — they launched investigations and levied steep fines. Fast forward a year: The same company experienced another incident. This time, they assembled a multidisciplinary team to proactively engage with regulators and state attorneys general.

The team took a risk. Even as the internal investigation was underway, they kept key regulators updated and focused on their work on protecting consumers. The regulators appreciated the effort, responded with a far more lenient fine, and issued no press release. With customer needs (and thus regulatory concerns) addressed from the start, the company was in a far better position to handle the ensuing litigation and defeat class certification. The preventative approach added weight to the company's side, and reduced the company's exposure.

Conversely, sometimes, clients see no way out of a regulatory onslaught other than to fight. Here, again, a proactive regulatory engagement strategy can help. In another example, a company prepared to file a TRO against an agency that was about to announce a risk of injury associated with one of the company's most successful products. The company knew its best chance for success was a two-pronged strategy — persuade the agency to issue a fair and accurate description of the risk without recalling the product, but at the same time build the administrative record to support the TRO if necessary. The strategy worked. The agency adopted a more measured approach in cooperation with the company, and litigation proved unnecessary.

Get the regulatory lawyers and the litigators working together at the outset.

For far too long, litigators and regulatory counsel were seen as entirely separate assets, each often needed but rarely at the same time. But the best day-one teams confronting regulatory inquiries include both regulatory and litigation talent. In this scenario, the trial lawyer joins the team at the outset as a trusted advisor. Regulatory counsel now moves forward to engage the agencies with litigation realities and strategies in mind. And the trial lawyer looks for every opportunity to develop key evidence, protect privilege in the company's regulatory disclosures and forensic investigations, and influence how the record will be perceived in the courtroom or at the negotiation table.

When these same litigators later have to fight regulatory battles in the courtroom, in increasingly common parallel proceedings, they will know the agency record and be well equipped to fight for their clients when judges get pulled into policymaking from the bench. The trial lawyer won't need to win over a jury if he or she can persuade a judge to defer to prior agency action.

General counsel who leverage regulatory and litigation teams that collaboratively identify creative solutions can anticipate and allay litigation risks. And companies that challenge their outside law firms to bring cost-reducing efficiencies will be able to ensure that a regulatory/litigation team doesn't blow the budget. This is a far more effective strategy than treating the regulatory and litigation challenges in isolation. And, it allows general counsel to measure success on a much preferred scale — not the challenges won, but the challenges avoided.

Companies have always faced challenges in dealing with government regulators. Traditionally, those challenges were discrete and private — the company would provide as little information as possible to the regulator and hope the government either went away or could be persuaded to enter into a modest consent decree. The general counsel considered it a good day when the regulator stopped calling.

Regulatory challenges are no longer such a private affair. Today, they routinely spawn civil litigation, and executives face intense public scrutiny along the way. At the same time, competitors and plaintiffs' lawyers pressure Congress and the agencies for action, make trips to Capitol Hill, instigate grand jury investigations, incite media coverage, and influence public opinion in well-orchestrated campaigns. Agencies are not immune from these pressures and must respond to a public that has been empowered by an array of social media tools to voice their concerns. Enforcement is on the uptick, and agency consent decrees impose compliance programs that can impact business activities for years.

This new world of relentless public scrutiny and parallel regulatory and litigation challenges makes it hazardous for companies to pursue a strategy of “laying low” with the regulator, dribbling out information to starve the investigation, in hopes it will simply all go away. A far more proactive approach is required to deal with the array of potential adversaries that may confront a company. Forward-thinking companies are proving that two ounces of prevention can help balance the scales and yield substantial benefits in reducing overall risk and defense expenditure.

Engage proactively with the agencies to build credibility and “tell your story.”

Today it is the rare regulatory inquiry that plays out in secret. Increasing public scrutiny of regulatory actions forces regulators to be more proactive, aggressive, and media-savvy. An equally proactive and comprehensive defense strategy is required.

A recent case demonstrates the risks: When the Supreme Court permits a securities fraud case to proceed predicated on allegations of the company's failure to self-disclose to the FDA the adverse effects of a popular cold remedy, it is clear the game has changed.

Although companies may feel the U.S. regulatory scheme already is onerous, consumers (and the plaintiffs' bar) expect an even higher standard of care that exceeds regulatory obligations, industry standards, and even science. Knowing how to work within this environment starts with recognizing there is no greater opportunity to chart a winning strategy — one that protects business objectives, avoids unwarranted regulatory action, and halts runaway litigation — than in the first moments of crisis. Government officials are eager for companies to disclose information. The most savvy companies use this opportunity to get their message out first, answer critics, and prove themselves to be the most credible voice. Proactive, well-crafted disclosure not only can placate regulators if not turn them into allies, but the company's regulatory story will define its closing argument at trial, if needed, years later.

Take the case of one Fortune 500 company that suffered a data breach incident and failed to notify regulators proactively. Once the regulators learned of the event — months after the fact — they launched investigations and levied steep fines. Fast forward a year: The same company experienced another incident. This time, they assembled a multidisciplinary team to proactively engage with regulators and state attorneys general.

The team took a risk. Even as the internal investigation was underway, they kept key regulators updated and focused on their work on protecting consumers. The regulators appreciated the effort, responded with a far more lenient fine, and issued no press release. With customer needs (and thus regulatory concerns) addressed from the start, the company was in a far better position to handle the ensuing litigation and defeat class certification. The preventative approach added weight to the company's side, and reduced the company's exposure.

Conversely, sometimes, clients see no way out of a regulatory onslaught other than to fight. Here, again, a proactive regulatory engagement strategy can help. In another example, a company prepared to file a TRO against an agency that was about to announce a risk of injury associated with one of the company's most successful products. The company knew its best chance for success was a two-pronged strategy — persuade the agency to issue a fair and accurate description of the risk without recalling the product, but at the same time build the administrative record to support the TRO if necessary. The strategy worked. The agency adopted a more measured approach in cooperation with the company, and litigation proved unnecessary.

Get the regulatory lawyers and the litigators working together at the outset.

For far too long, litigators and regulatory counsel were seen as entirely separate assets, each often needed but rarely at the same time. But the best day-one teams confronting regulatory inquiries include both regulatory and litigation talent. In this scenario, the trial lawyer joins the team at the outset as a trusted advisor. Regulatory counsel now moves forward to engage the agencies with litigation realities and strategies in mind. And the trial lawyer looks for every opportunity to develop key evidence, protect privilege in the company's regulatory disclosures and forensic investigations, and influence how the record will be perceived in the courtroom or at the negotiation table.

When these same litigators later have to fight regulatory battles in the courtroom, in increasingly common parallel proceedings, they will know the agency record and be well equipped to fight for their clients when judges get pulled into policymaking from the bench. The trial lawyer won't need to win over a jury if he or she can persuade a judge to defer to prior agency action.

General counsel who leverage regulatory and litigation teams that collaboratively identify creative solutions can anticipate and allay litigation risks. And companies that challenge their outside law firms to bring cost-reducing efficiencies will be able to ensure that a regulatory/litigation team doesn't blow the budget. This is a far more effective strategy than treating the regulatory and litigation challenges in isolation. And, it allows general counsel to measure success on a much preferred scale — not the challenges won, but the challenges avoided.