It will always be an internal investigation that makes the in-house lawyer’s life a tad easier-he keeps in-house lawyers going. Internal investigations are not easy to conduct, and there are factors that can negatively affect an investigation if not taken into account
. As the employee or management being implicated in the wrongdoing could range from internal business ethics violations to criminal deeds, internal counsel stands to ensure that the investigation is thorough, well documented, and legally safe, given that whatever the issue, an investigation under our supervision would lead to an expeditious resolution of the same. Such an investigation, if completed properly, could mitigate contingent risks, save face for the company, and preserve stakeholder faith. This is a road map through which in-house counsel may be led along the maze of internal investigations.
Stage 1: Don’t Rush but Ask the Right Questions from the Start
The first thing you hear concerning a potential internal issue probably makes you want to jump smack into the investigation. In other words, big mistake: stop and think about the wide implications. The rush will become your enemy now, for it will breed carelessness that may avert you from noticing slight but critical details. Consider these questions:
Are government agents involved or likely to be so? Essentially, another way of phrasing this question is: Are the regulators or law enforcement agencies already aware of the situation? Here, everything boils down to the timing of communication from your company to a regulator about a particular issue.
Is the alleged activity deemed criminal? Your considerations are further enhanced, for in this case, there may be forward-thinking legal obligations to report the conduct in question.
Could this create a cause of action? Assess the possibility of civil litigation in the matter.
How many people know of the allegations? The more people, the greater the reputational damage potential.
Is it going to damage the reputation of the company? Examine the public implications.
Who are the people involved in this situation, and are they internal politics that would make matters complicated?
Is it a domestic issue, or an issue that is international or both? Because international issues may have involved very complex legal jurisdictions.
Are you going to inform the Board or C-Suite about it? Look into whether this is something that senior leaders will need to be aware of early on in the process.
What is the risk of termination or some other disciplinary action against employees?
What are the steps for documenting everything in case it has to be examined in future?
Is outside counsel needed right now? Some situations require the expertise of independent lawyers for impartiality and privilege.
Take some time to ask these questions to guide your next steps in the investigation.
One thing is definite in internal investigations: process. Well, in an ideal world, the department of legal should have procedures for such situations as interview templates and forms for witness interviews and report and confidential communications. The procedures would ensure that the investigation is consistent, objective, and thorough in its purpose.
The procedure should:
Collect evidence: Places constraints on any possible bias while allowing evidence-gathering to reach all facts.
Define the dimensions, if any, of the malfeasance. Understand fully the issues involved.
Evaluate the policies and procedures of the company so that gaps or failures can be identified that played a role in the event.
Taking corrective action: make forward-looking changes to improve the situation, including changes so that similar occurrences are avoided.
Manage potential legal repercussions: Respond to the possible litigations, government inquiries, or different kinds of legal action.
Shield the company from negative influence: Impede the reputation damage, both inside and outside.
Accountability of management: Also, to check that proper actions have been taken from the side of the leadership in the investigation.
Limit exposure to legal risks: minimize penalties, lawsuits and other liabilities.
Document every step of the investigation by in-house counsel, including interviews and findings, to guarantee that the process is defensible. In particular, a written work plan is invaluable should the investigation be later drawn into question.
Phase 3: Decision on When to Bring in Outside Counsel
One of the initial decisions you have to make is whether or not to involve outside counsel. Generally, you might be able to manage the investigation on your own. However, there are cases where it is better to solicit the assistance of outside counsel.
The primary considerations are:
Investigating senior employees or executives: If they are high-profile, it may provide an independent perspective via outside counsel.
Criminal exposure potential: Outside counsel may help navigate above almost impossible legalities when the advent of conduct cannot rule out the possibility of criminal behavior.
Board implication: If the investigation involves the company’s Board of Directors, outside counsels provide transparency and independence.
Another reason is that outside counsel can help preserve the attorney-client privilege and take those communications and documents outside the reach of any future legal challenges.
Stage 4: Conduct Thorough and Professional Interviews
At the heart of any internal inquiry, the interviews are intended to obtain correct, factual information from sources in a fair and impartial way. These are the best practices to observe:
Conduct interviews as soon as possible: Interview the key witnesses while their memories are still fresh.
Always have two people present: There should be at least one other person in the room witnessing what is said. Prepare thoroughly: Know what documents are crucial to the interview and outline interview questions. Create a comfortable environment: Interview in a neutral, confidential location that fosters comfort so that witnesses are willing to share information. Always use a consistent format: Collect interview findings in the same way so clarity and accuracy can be assured. Stay professional: Be calm and objective throughout so that cooperation continues.
Upholding every interview is a part whereby employees will be blessed with the Upjohn warnings: these tell them that you represent not their interest but the company, and this is privileged conversation save for possible control by the firm.
step 5: Prepare the Final Report Now that the investigation is over, it is time to put together the final report. The report must detail enter findings from the investigation, steps to follow, and any forms of recommendation for remedial action.
Key components for inclusion are:
Allegations and investigation summary: Outline the issues at hand in the investigation, along with the measures that were taken to resolve them.
Background: Give context and background to the situation.
Key findings: Present important documents and witness statements and other evidence.
Legal analysis: Describe how the findings correlate with company policies, laws, or regulations.
Recommendations: Provide suggestions for corrective actions to be taken or improvements to policies and procedures.
A clean, well-typed report will be crucial if the [subject of the investigation] is challenged later.
Conclusion: Reviewing Your Process
Investigation is a work-intensive process. However, when in-house counsel set out on these investigations straightforwardly, with clear guidelines, with an emphasis on fairness and objectivity, then they rise to the occasion. It is now time to re-evaluate your department’s processes, with a view to having both standard guidelines and templates; and consider building a rapport with external lawyers that you can always count on when the need arises. When you take a proactive stance, you will own the performance of internal investigations and be in a position to enable your company to respond effectively to any potential issue.
