A Crisis Is Not the Time to Start Looking for a Lawyer
Every organization hopes it won’t happen — the financial collapse, the internal investigation, the founder scandal, the whistleblower complaint, the lawsuit. But hope isn’t a strategy. In my work with both businesses and nonprofits, I’ve been brought in during moments when everything is already on fire: rent unpaid, staff walking out, vendors threatening lawsuits, and the board struggling to make sense of the damage.
The truth is, it’s not the moment of crisis that defines your outcome — it’s how prepared you were before it hit. If you want to survive a crisis, you need systems, people, and legal structure already in place. Because when it does happen, it moves fast. And if you’re fumbling for policies, contracts, or legal advice in real time, the damage is already compounding.
I’ve seen this play out firsthand — most intensely during my time serving as legal counsel to a court-appointed receiver for a nonprofit that collapsed under the weight of its own mismanagement.
What I Learned from a High-Profile Nonprofit Collapse
When a prominent LGBTQ nonprofit in D.C. abruptly closed its doors in 2022, it left behind a wake of unpaid employees, scattered records, evicted properties, and vulnerable clients with nowhere to turn. As counsel to the receiver, I was tasked with helping make sense of the chaos, protect what remained, and minimize further harm to the community and to the small nonprofit that stepped in to manage the fallout.
There was no playbook for what we walked into. Offices had been abandoned and looted. Records were missing or destroyed. The founder had fled the country after siphoning large sums of money from the organization’s accounts. Rent hadn’t been paid in months. Staff were owed wages. Sensitive client mail was piled in corners. And perhaps most critically, the board of directors — on paper, a group of seasoned professionals — had failed to exercise any meaningful oversight for years.
What happened in that case wasn’t just about individual misconduct. It was about structural failure. And that’s the part organizations often miss.
The Hidden Legal Risks You Can’t Ignore
A crisis rarely begins with a scandal. It starts quietly — with something left unchecked:
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A contract signed without review.
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A board that hasn’t met in months.
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A volunteer who acts beyond their authority.
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A founder who operates without internal controls.
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Policies that are outdated, unused, or missing entirely.
In this particular case, even with a sophisticated board, no one intervened when accounting red flags were raised. No one enforced internal controls. No one questioned cash withdrawals or board appointments. By the time anyone took action, the damage had been done — not just to the organization, but to its community, to its legacy, and to the trust placed in it by donors, clients, and partners.
Five Lessons for Any Business or Nonprofit in Crisis
Here’s what I took away from that experience — and what every organization, no matter the size, should keep in mind:
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Don’t confuse charisma for competence. Visionary leaders are important — but they need oversight. Founders and executives must be subject to the same checks and balances as everyone else.
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Governance isn’t optional. Your board must meet regularly, keep records, and fulfill its fiduciary duties. Ignorance of mismanagement is not a legal defense when everything falls apart.
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Paper trails matter. Keep contracts, vendor records, personnel files, and financial documentation organized and accessible. In a crisis, the absence of records is itself a liability.
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Protect client privacy at all costs. Sensitive information must be safeguarded, especially in communities that already face stigma or criminalization. This is not just about compliance — it’s about ethics.
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Have legal counsel before you need it.
You don’t need to be in litigation to need a lawyer. Counsel can help you design policies, negotiate contracts, and build structures that hold up when tested.
You Can Survive a Crisis — But Not Alone
The nonprofit I helped support during this receivership didn’t have all the answers. It stepped in to stabilize the situation without exposing itself to liability. Together, we organized records, secured physical spaces, protected client data, coordinated with local service providers, and eventually filed for bankruptcy on behalf of the failed organization — all while keeping our own mission intact.
That outcome wasn’t guaranteed. It was the result of decisive leadership, community collaboration, and sound legal strategy. It’s proof that even when an organization collapses, the response can still be a story of integrity and resilience — if the right structures are in place.
Whether you’re running a business or a nonprofit, a crisis will test everything — your leadership, your values, and your infrastructure. Legal counsel won’t stop the crisis from happening. But it can be the difference between a controlled landing and total collapse.
If you’re running lean, overstretched, or unsure where to begin, start with this question: If something went wrong tomorrow, who would be there to help you pick up the pieces?
If the answer is no one, it’s time to change that — before the crisis makes the decision for you.
About the Author
Nick Harrison is the founding attorney of Harrison-Stein PLLC, a Washington, D.C.–based firm serving nonprofits, small businesses, and individuals. He has represented organizations through bankruptcy, contract disputes, governance breakdowns, public controversies, and institutional collapse — helping clients survive crisis with strategy, integrity, and purpose.
