An increasingly complex global business environment combined with changing expectations relating to culture, business and the work environment has put more and more companies under public scrutiny.
In 2014, around 64% companies with annual revenues over $1 billion and 44% companies with revenues over $100 million to $1 billion had outside counsel on retainer to assist with investigations. In recent years, approximately two thirds of US companies in the insurance, energy, financial services and healthcare industries faced some sort of regulatory or government investigation.
This increasing regulatory scrutiny is coupled with an increase in sensitivity and ethical behavior towards minorities and the impoverished has led companies to re-evaluate their policies. This of course, comes with a whole slew of investigations that simply cannot be avoided. This is why it’s important to have attorneys handle corporate investigations.
Supervising the Investigation
.jpg)
When it comes to who should supervise the whole Corporate Investigation, it’s a good option to give that responsibility to outside counsel or a law firm that you’ve hired on retainer to handle these investigations. It’s apt to give the reins to someone else because the internal investigation almost certainly involves misconduct of some kind from a senior official or a person from a high management position.
This is great for your public image and is really the best thing to do for an impartial and unbiased outcome.
Avoiding Personal Exposure
You can avoid personal criminal exposure if you hire experienced legal representation in a Corporate Investigation. At present, literally scores of publicly traded companies are carrying out internal investigations and inquiries into possible violations of different laws and Acts passed by governments around the world. This also includes business crimes.
Good legal representation can avoid you facing federal criminal charges so it is vital to have your own lawyers. This can even come down to having your own personal lawyer, but only if your company allows it. The company’s attorney auditor will of course have the right to question you but you can have your lawyer present at that time.
Protecting the Company as a Whole
The company’s attorney is always sworn to protect the whole and not the one. This means that an attorney will place the interests of the company above a single employee, even if that employee happens to be a chief officer or in a senior position of power; hence it is in the best interests of the company to hire an attorney who is committed to finding the thorn in its side and saving the company from financial failure and public maligning.
It’s unfortunate that the thorn is sometimes a founding member or a key member of the team. An attorney won’t discriminate and lay out the facts in front of the board and the company in full detail.
Effective Project Management
The efficient management of Corporate Investigation can improve the quality of the investigation results and better equip all parties involved to answer any questions that can be thrown at them. This shortens the time taken to get over with the investigation and limits disruption to the business as well as its reputation, and hence the cost benefit is huge.
The attorneys will plan and control the investigation from start to finish. This is especially important when dealing with a complex, multi-jurisdictional investigation. These are by their very nature, likely to result in surprises that your firm or company may not be ready for. The attorney will account for all sorts of probabilistic outcomes and all the permutations and combinations of settlements and wins and losses that may come your way since they’ve been educated in the history and precedent of law.
The multi-jurisdictional aspect of Corporate Investigations cannot be stressed enough. An attorney will understand the cultural and legal differences that exist between relevant jurisdictions. Boards and in-house lawyers are knowledgeable about specialized and location specific rules as they relate to separate issues and worldwide investigations. These include data protection and employment laws as well as intellectual property policies and ownership laws that vary by state and provincial lines.
They are also aware of the Corporate Investigations going on currently and can see by the majority of outcomes what will happen. They also have a failsafe plan and an approximate figure in mind that they calculate for which the case can be settled. All of these options are weighed and considered before the case begins and so, with preparation on your side, you have a likelier chance of coming out looking better than your opponent.
Formulating a scope
Attorneys will formulate the scope of the investigation and manage it so it doesn’t get out of hand. The US Department of Justice and the US SEC have both cautioned against needless prolonging or diversions when Corporate Investigations are going on.
The importance of this is understood by attorneys since investigation in to needless departments can unearth other information that the company may not want to be made public either due to public relations reasons, business reasons or ethical and confidentiality reasons.
During Corporate Investigations it is important to let attorneys draw the boundaries and sped up the investigation for the better. The scope of the investigation can always be broadened later if needed. Clear timelines and deadlines are also almost always set by attorneys to make sure that an investigation doesn’t eat up more resources than necessary or use up more man hours than necessary.
Investigation Protocols
In house counsels or attorneys have the foresight to prepare an investigation protocol if a Corporate Investigation comes about. This is one of the reasons that the cost benefit of hiring attorneys outweighs not hiring them at all. These protocols will also have various probabilistic outcomes and scenarios considered so that if various third parties have to be appointed, they will be.
A formal investigation protocol dealing with all these issues has the advantage of securing the blessing of a business and a sense of dignity and respect for the structure of governance and investigation.
All this information only points to the fact that a Corporate Investigation of any kind is better carried out with an outside counsel or an attorney at your side. It will indubitably save you a lot of time and money.