BusinessReport.com

Baton Rouge attorney Kyle Beall didn’t have power at his Garden District home for five days after Hurricane Gustav, but his downtown office at Kean Miller Hawthorne D’Armond McCowan & Jarman was up and running two days after the storm.

“The remainder of the work week during the week of the storm was fairly typical since many of our clients around the country weren’t even aware of the devastation and power outages in south Louisiana,” Beall says. “Our ability get back online was pretty important.”

Kean Miller, whose offices are located in One American Place, benefited from the speedy restoration of utilities in its downtown block, but the firm had contingency plans, including outsourcing a fleet of mobile offices, if the power outage had endured. Like other white-collar businesses in Baton Rouge, the law firm had been inspired by hurricanes Katrina and Rita to develop a disaster plan to protect staff and ensure business continuity.

Kean Miller’s preparation and recovery plan was created within a year of the 2005 storms, which wreaked havoc on its New Orleans and Lake Charles offices. Client Services Director Steve Boutwell says the firm hired New Jersey-based Eagle Rock Alliance to create an “all hazards” plan applicable to diverse catastrophes.

For Gustav, Boutwell says, the process began with confirming staff emergency contact information.

“Phase One was to gather all employee information about where they would be during the event,” he says. And the firm’s IT staff boxed computers and stowed them away from windows. [Pictures of downtown Houston after Hurricane Ike showed streets filled with computers that had been tossed by the wind through blown-out windows.]

An internal crisis committee divided the responsibility of communicating with staff, clients and the media during and immediately after the event. Data, already exported to safe, offsite servers, was protected if Kean Miller staff members had lost building access or if the building had suffered major damage.

By Wednesday, Boutwell ventured back to the office to begin calling and e-mailing attorneys, staff and clients to report the office was functional. By the following Monday, with many residences still powerless, Boutwell was posting blogs written by Kean Miller attorneys addressing issues like liability over fallen trees and reduced tax assessments due to hurricane damage.

Such immediate communication with staff, clients and target markets is not just gravy—it’s essential, Eagle Rock Alliance CEO Gerry Nolan says. Where an acceptable period of post-disaster closure used to be measured in days, for many businesses, it’s now expected to be in hours.

“What we call the ‘window of recovery’ is shrinking,” he says, a situation intensified by a borderless client-base that is less sympathetic to regional catastrophes, and the expectation that e-mails will be answered immediately regardless of circumstances.

But bouncing back is easier for larger operations, like banks, insurers and others that have offsite resources and can import staff to support the recovery, or export client issues to satellite locations out of harm’s way.

“It’s a lot harder for small businesses, which have to do everything in-house,” says Baton Rouge CPA Gus Levy of The Levy Company. Since Katrina, Levy says, more small companies have taken steps to back up data offsite, but many still do not.

“A lot of small companies still aren’t prepared to handle the financial side of recovery because they’re focused on repairs and other issues,” he says.

Recovering lost revenue by filing a business interruption claim or writing off casualty losses on tax returns requires documentation, some of which may have been lost, Levy adds.

“Substantiating claims is hard if you don’t have current financial statements,” he says.

Historically, disasters spark businesses to develop in-house disaster plans, but those businesses are often not in the affected area, Nolan says. For example, Hurricane Katrina, he says, inspired companies near New Orleans to avoid the mistakes made by companies in the city itself.

The same circumstances happened after the 9/11 terrorist attacks, Nolan says. “We saw a huge rise in planning, but in markets outside of New York.”

In fact, 9/11 initiated the trend for businesses to focus on recovery and continuity, adds Arjen Boin, executive director of the Stephenson Disaster Management Institute at LSU’s E.J. Ourso College of Business.

“The financial industry got started first. After 9/11, they realized they had concentrated all their hardware and intellect into one location,” he says. “The pandemic flu threat added to the need to plan when travel was shut down, so from 2001-2004 you saw a growth in continuity consultancies.”

Nolan says Eagle Rock’s number of clients has tripled, but they’re smaller contracts than they once were since more companies are developing in-house committees to shoulder at least some of the responsibility for planning.

That’s wise, says Boin, who cautions that businesses should diagnose their own issues first, including identifying suppliers, understanding how data can be retrieved and determining how long the company can afford to be down.

Still, while the power grid smiled on some Baton Rouge businesses after Gustav, it didn’t smile on their staff members, who faced issues ranging from residential damage to lack of power to extended school closures. Boutwell says Kean Miller decided to provide comp time to hourly staff members who came in during the immediate post-storm period. With others, it worked on a case-by-case basis on compensation and time off.

Consultants like Nolan admit that planning doesn’t control everything, particularly power supply, municipal issues and downed networks.

Pediatrician Sandy Reeves says the practice she shares with eight other physicians on Bluebonnet Boulevard was without full power or phone lines for two weeks. Pediatric Medical Center physicians still kept office hours, but had no way of communicating with patients they were open for business.

Eager to perform checkups and to keep families out of the emergency room, Reeves said she and her colleagues opened their doors and were prepared to work by lantern and flashlight. Few patients stopped by.

“Next time, we have to have a better way of letting people know we’re open,” she says. “It was so good to finally see patients again.”

Nolan says the need to get on top of continuity will only intensify and that companies should take the issue seriously.

“There is still a big dose of ‘it won’t happen to me,’” he says.