THE STRATEGIC ROLE OF EXTERNAL LEGAL EXPERTS IN ADDRESSING CORPORATE CRISES
MAY 25, 2025
Every corporation, regardless of its size or industry, is exposed to risks stemming from improper actions that may occur internally or externally.
Improper conduct by employees, poor managerial decisions, or the failure to take appropriate action can result in significant financial and reputational damage to the company.
Although many corporations have internal mechanisms to manage such risks, these are often limited by internal influences that may obscure the real problems, as they can be subjective and shaped by organizational culture, personal relationships, or individual interests.
Many corporations also undergo external audits; however, traditional external audits are primarily financial and focus on evaluating the company’s financial performance and the reliability of economic data.
In cases involving abuse of authority or trust, or incompetence resulting in poor decisions due to certain actions or inactions within the corporation, an independent assessment to conduct an internal case-specific analysis is a strategic move. It helps preserve the company’s reputation and mitigate risk.
While it is entirely appropriate in such situations to refer the matter to public authorities for investigation and further review, the transparency associated with state investigations can potentially harm the corporation’s public image and lead to long-term consequences in its relationships with shareholders, consumers, and employees.
Independent external legal experts can provide an objective perspective and ensure that every questionable decision is reviewed without internal bias, while maintaining full confidentiality, allowing the matter to be resolved within a manageable framework.
The purpose of such an engagement is to assess management decisions and employee actions to identify errors or shortcomings that may lead to financial loss.
This is because the cost of engaging an independent law firm for risk management evaluations is significantly lower than the financial and reputational damage that may result from not conducting such an analysis. An unforeseen crisis can permanently erode trust among consumers, shareholders, and other stakeholders, causing significant losses that are much harder and more costly to recover from.
Engaging a team of external legal experts can yield several key benefits:
- Unbiased and objective assessments
- Identification of errors and deficiencies
- Prevention of legal and financial consequences
- Protection of the company’s reputation and image
- Recommendations for resolving irregularities
Many of the world’s largest and most prominent corporations—including Volkswagen, Uber, General Motors, Wells Fargo, Meta (Facebook), Enron, and others—have engaged independent legal experts to conduct such evaluations and analyses in order to safeguard their reputations and financial stability.
Below are two summaries of publicly disclosed cases, shared with the consent of the respective parties. These cases demonstrate how the process of evaluation and analysis by external experts remains fully confidential and is handled with great care to protect the privacy and integrity of the companies involved.
Case Study: Uber – Investigation into Workplace Culture
Uber faced serious allegations of a toxic workplace culture, including sexual harassment, gender discrimination, and retaliation against employees who reported concerns.
The case gained public attention after former employee Susan Fowler published a blog detailing her experience within the company.
What actions did Uber take?
- Uber engaged an external law firm—Covington & Burling LLP—to conduct a comprehensive and independent investigation into the company’s organizational culture.
- The investigation involved interviews with over 200 employees and a review of internal HR policies and complaint-handling procedures.
Outcome:
The final report included 47 specific recommendations, including:
- Establishing a new leadership structure
- Restructuring oversight boards
- Strengthening anti-discrimination policies
- Severing ties with key management figures (including CEO Travis Kalanick, who resigned shortly thereafter)
The legal firm played a crucial role in restoring the company’s image, reassuring investors, and ensuring that Uber was genuinely committed to internal reform.
As a result, Uber regained market trust and began rebuilding a healthier workplace culture.
Case Study: Wells Fargo – The Fake Accounts Scandal
Wells Fargo, one of the largest banks in the U.S., faced a scandal when it was revealed that employees had opened millions of bank accounts and credit cards in customers’ names without their knowledge or consent, in order to meet aggressive sales targets.
What actions did Wells Fargo take?
- In addition to being investigated by federal and state authorities, Wells Fargo engaged an independent team of legal and audit experts, led by the law firm Shearman & Sterling, along with specialized consultants.
- A comprehensive review was conducted of the bank’s organizational culture, bonus policies, and internal pressures on employees.
- Immediate actions were taken, including the removal of top executives.
Outcome:
- The independent investigation uncovered deep-rooted cultural issues and a lack of effective internal controls.
- Wells Fargo implemented extensive structural reforms, including changes to the rewards system and strengthening of risk and ethics oversight.
- Over time, despite severe reputational damage, the proactive engagement of external experts helped stabilize the situation and initiate a long-term reputation recovery process.
Conclusion Engaging external legal experts is not merely a crisis-management tool—it is a strategic investment in preserving a corporation’s integrity, financial stability, and long-term credibility.
Authors: Gent Nuza and Albin Xhemaili