Spotlight on Crisis PR Firms

Los Angeles Business Journal Staff

When nearly 40 people fell ill from suspected E. coli exposure from eating at Pat & Oscar’s restaurants in 2003, the restaurant chain’s owners did more than apologize.

They quickly severed ties with the supplier of the allegedly tainted lettuce. They set up a toll-free phone number for patrons who feared poisoning. And over the course of a weekend, they gave out more than $500,000 in free food to lure skittish customers back.

Worldwide Restaurant Concepts Inc., the Sherman Oaks-based owner of Pat & Oscar’s, didn’t come up with those ideas on its own. It turned to one of a growing number of crisis-management specialists in Southern California: Pasadena-based Lexicon Communications Corp.

While the E. coli scare caused same-store sales at Pat & Oscar’s to drop 13.6 percent last year, the strategies at least stemmed what could have been potentially fatal damage.

Lexicon occupies a growing niche within the public-relations industry: helping companies defuse potential crises.

“There’s always been steady growth in this field,” said Steven Fink, president of Lexicon, which was founded in 1983. “What’s driving the growth now is that CEOs are seeing other companies’ mistakes and realize they don’t want to repeat them.”

As a field, modern crisis management dates back to the early 1980s, when Johnson & Johnson had to handle the nightmarish Tylenol episode, in which capsules of the popular product had been laced with cyanide. Seven people were killed. Since then, crisis-management specialists have become an accepted part of the public relations field.

It’s impossible to gauge the number of crisis-management specialists since the field covers a range of practitioners – from those working for major PR firms to small shops that specialize in certain areas.

Excerpted from the Los Angeles Business Journal  
March 28, 2005