How GCs Can Use Investigative Consulting To Mitigate Risk, Resolve Disputes, Save Money

Mergers and acquisitions.  Investigations, and disputes.  General counsel occasionally encounter situations in which they need accurate, reliable information, quality business intelligence, or legally and ethically obtained evidence—sometimes in or from unfamiliar jurisdictions.

Investigative Consulting

The investigative consulting firms that do this kind of work are often comprised of professionals from the legal, law enforcement, and intelligence communities.  And for good reason.

To be of value, investigative consultants need to be able to understand the deal or the dispute in support of which they’re working.  They need to be able to develop an investigative plan appropriate to that deal or that dispute.  And they need to understand the law and the rules that will apply.

Those rules, by the way, include not only the rules of evidence, but also the rules of professional conduct.

Mega-deals will put a lot of lawyers in the room.  So, too, will high-exposure litigation.  When a company’s in-house lawyers, outside counsel, and outside investigators, are able to work together as a team, their collective ability to protect and defend the company increases significantly.

Global Resources

Just as importantly, because multinational companies are, by definition, engaged in the global economy, and, therefore, might require assistance globally, the investigative consultancies with the greatest reach employ vetted resources who can be brought into an engagement depending on the geography involved or the expertise required.

Simply put, no firm—whether a law firm or an investigations firm—no matter its size, has an office in every city, in every country, worldwide.  There is real value in the ability of a firm to vet and manage resources.  And there is real comfort in knowing those resources can be trusted.

Again, however, this requires an ability of the investigators to understand the investigation being conducted, and the capabilities and resources needed.  Investigative consulting should involve consulting.

Results, Results, Results

So, what does investigative consulting look like in practice?  Consider the following hypotheticals, not from an investigator’s point of view, but from a GC’s point of view.

Litigation Intelligence

In this first hypothetical, a company is involved in high-exposure litigation.

Investigative consultants who understand what it takes to litigate and try a case to verdict can develop relevant, admissible evidence with which to advance the company’s case, negate the other side’s case, and impeach the other side and its witnesses.

Stated differently, litigation intelligence can help the company resolve disputes, and litigation intelligence can help the company prevail at trial.

Corporate Internal Investigations of Misconduct

In the second hypothetical, allegations have been made regarding the activities of a senior executive within a company.

The general counsel asks the company’s outside investigations consultancy to conduct an independent investigation, and it quickly becomes apparent that the accuser lied.

At that point, it would be tempting to terminate the investigation and avoid additional fees and costs.  However, by allowing the investigation to be completed, and a report to be delivered, the general counsel would be able to insulate the company from future liability.  If, in the future, other allegations are made about the same senior executive, and this time proved to be true, the company would be able to rely on the earlier report to negate a claim that the company knew or should have known the executive presented a risk.

And let there be no mistake, whether the company knew or should have known the executive presented a risk can have an impact on liability and damages.

Corporate Internal Investigations of Criminal or Regulatory Violations

In the third hypothetical, a company is under investigation for sanctions violations implemented and enforced by way of the International Emergency Economic Powers Act, known more commonly by its initialism, IEEPA.

An independent investigation can help determine whether there were in fact violations of sanctions and, if so—and this is very important—whether those violations were willful.

Sanctions violations that were willful are not treated the same as sanctions violations that were not willful.

M&A Support and Investigative Due Diligence

Finally—because the role of general counsel cannot only be about protecting the company in litigation, investigating allegations of misconduct, and resolving serious and costly violations—in this last hypothetical, a company is contemplating a cross-border transaction.

As with any deal, consideration is being given to legal, commercial, financial, and reputational risks.  Moreover, because the deal is cross-border, consideration is also being given to geopolitical risks, and there are concerns about bribery and corruption.

A business intelligence investigation, or investigative due diligence, based on an understanding of the contemplated deal and the associated legal, commercial, financial, geopolitical, and reputational risks, will allow the GC to provide better, more informed advice to the company.

This, in turn, will allow the company to make better, more informed decisions, about the deal.

Mitigate Risk, Resolve Disputes, Save Money

With greater frequency, GCs are calling on investigative consultants to help mitigate risk and resolve disputes.  In doing so, they’re saving the company money.