By Al Barbarino

Law360 (April 22, 2020, 9:30 PM EDT) -- As COVID-19 continues to crunch companies' resources, former second-in-command at the U.S. Department of Justice Sally Yates on Wednesday expressed worry about the long-term implications of budget cuts on corporate priorities and compliance departments.

Speaking via video at a conference presented by the Ethics & Compliance Initiative, Yates cautioned firms against allowing the current "emergency mentality" to persist after the country has put the pandemic behind it.

"Whenever we're in an emergency situation, it's natural for the attention and focus to go to the emergency," said Yates, a partner in King & Spalding LLP's special matters and government investigations practice and former U.S. deputy attorney general.

"To me, the real risk is that we let this emergency mentality become more long-term," she said.

Yates noted that with the thick of the crisis less than two months along, budget issues are evident as many legal and compliance departments face resource crunches and some companies edge towards hitting the panic button.

"For many companies, just staying afloat is what they have to focus on right now and I totally get that, but I think we've just got to be mindful," she said.

"It's not just a budgeting issue, but it's also a messaging and emphasis issue," she added. "That is where people can start cutting corners because they feel like they need to do that to help the bottom line of the organization."

It doesn't help when "executives have their eye on the profit-loss side almost exclusively and aren't thinking so much about how they're doing business," she said.

As deputy attorney general and then as acting attorney general, Yates was responsible for the DOJ's 113,000 employees, all U.S. attorney's offices and law enforcement agencies, as well as the Bureau of Prisons.

She said her switch to private practice in 2018 gave her a renewed appreciation of how burdensome and distracting government investigations and inquiries can be to companies, noting that even a subpoena can have dramatic, longstanding effects on the reputations of firms and individuals.

Yates stressed that a values-based approach to compliance is perhaps among the best preventative measures for companies — one that goes beyond a paper-based program and that is embraced by top management and integrated throughout the business and company culture.

"If I think back on any major corporate fraud case from the almost 30 years that I was at DOJ, you can trace most all of those to a failed corporate culture issue," she said.

While concerned with some of the long-term implications of the pandemic, Yates said she was impressed by some of the good that has come out of it, exemplified by the resilience of not only her firm but also the client companies she works with.

"All of us have been thrust into a situation where nobody expected that we were all going to be working from home," she said. "What has been encouraging is… how people are adapting to what the new normal is, how people are giving each other grace and the humanity that's come out of this."

At a time when kids or pets may come running to the room at any given point during a videoconference, Yates said her colleagues and clients have shown tremendous understanding, quipping that she was shocked her own dogs hadn't intruded on the present discussion.

However, she recognized these as "high class" problems, expressing gratitude that she is among those lucky enough to conduct her work from home. "I think of all of those people, whether working at a grocery store or [as a delivery person] or whatever it might be, that to be able to earn money for family, you've got to be out in public."

--Editing by Brian Baresch.

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