Crisis Comms: Is RRA Effectively Managing the Rothstein Ruin?

aaron-gordonby SMS Vice President Aaron Gordon
In the closing scenes of The Wizard of Oz, the wizard is exposed by Dorothy and her pals as a fraud, nothing more than “the man behind the curtain.”

Following the news that Ft. Lauderdale attorney Scott Rothstein may have bamboozled investors out of hundreds of millions of dollars just as his law firm, Rothstein Rosenfeldt & Adler (RRA), enjoyed seemingly limitless growth, it’s looking more and more likely that Rothstein was a lot more wizard and a lot less wunderkind.

The parallels between Frank Baum’s timeless tale and Rothstein’s stranger-than-fiction saga don’t end there. In Oz, the wizard’s scam was operating unbeknownst to the residents of the Emerald City and the kingdom beyond its gates. Likewise, the key players in Rothstein-gate all contend that they were in the dark as the scheme unfolded. Kendall Coffey, the attorney representing RRA in this matter, claims that shady dealings were confined to Rothstein’s ultra-private office, which he referred to as a “sanctum.”


It’s a public relations nightmare. Given that our firm has a number of clients in the legal industry and plenty of experience in crisis communications, we’ve been watching the debacle closely, and noting how RRA is managing the PR crisis that has ensued since this alleged fraud surfaced. Here’s our evaluation.

My “Monday morning quarterback” colleague Tadd argues that – contrary to everything that has been said publicly and reported thus far – Rothstein’s partners had to have been ‘in the know.’ It’s a fair position to take; one look at the situation from the outside – at the scores of red flags that were raised and Rothstein’s too-good-to-be-true spending habits – prompts you to infer that ‘they had to know something!’

But what if they didn’t? What if they just thought Rothstein was a paranoid man who knew how to grow a business? Put yourself in his colleagues’ shoes; why upset the apple cart when the firm is running full steam ahead?

And if they had suspected that something was afoot, then why not expose Rothstein? Why risk everything when the alternative – the investigation unfolding now – bodes far worse for the firm than taking action at the first sign of wrongdoing. What would RRA have gained by sweeping the scam under the rug, let alone in a post-Madoff world when fraud-related anxiety is at a fever pitch and we all know how easy it is for a house of cards to tumble?

‘What-ifs’ aside, RRA had two options once this news surfaced:

–First, take a closed-door approach guided by the premise that no noise is good noise; let the investigators do their job, stay out of their way and say nothing.
–The second option (currently underway) involved going on the attack – painting Rothstein as a crook, the firm as his victim, and doing everything possible to draw a clear distinction between his shady dealings and RRA’s practice of law.

In the week since this imbroglio first made headines, RRA has taken initiative – inviting the media to tour Rothstein’s office, putting attorney Kendall Coffey front-and-center as an openly-accessible spokesman (the un-Rothstein, if you will), and taking every opportunity to state their case that they were in the dark as their former managing partner ruled the roost. It has been a lesson in implementing a proactive strategy, reactively.

RRA was essentially given a choice between more privacy and a healthy dose of transparency; between a Rothstein-like approach to dealing with scrutiny and an open-door policy. Facing the problem (and the media) up-front was a defining choice that did more to distance the firm from Rothstein than any media statement or press conference could have.

In the opinion of this public relations professional, they made the right choice.