Internal investigations come in all shapes and sizes—criminal, civil, employment, regulatory, and many other areas. Despite the variety, there are core principles common to each type of internal investigation—principles that help protect both the attorney and the client.
Here are 10 core principles common to internal investigations:
- Privilege. Many clients assume an attorney-conducted investigation is privileged. This assumption is not always correct—with increasing frequency, courts conclude that all or part of these investigations are not privileged, depending on a variety of factors you must be keenly aware of. Consider early on whether the client expects or wants the investigation to remain privileged. There are ways to increase the likelihood that the investigation is deemed privileged, but you need a frank discussion with your client about the risk that it will not be.
- Know the investigation’s purpose. Be sure you fully understand the investigation’s purpose. Is the investigation required by statute? Does the client intend to share the result with the public, such as a school investigating allegations of sexual abuse? Is there a statutory or other business-generated deadline for completing the work? If the investigation is mandatory or will be shared, there is a good chance it will not be privileged. It is important that investigators keep privilege concerns front and center as they perform their work.
- Engagement letter. An engagement letter is required in many jurisdictions and is always prudent. In internal investigations, the engagement letter allows you to confirm who the client is (company? board? committee?) so there is no confusion or blurring of roles as the investigation progresses. Ensure that the engagement letter makes clear the firm is providing legal advice if you want to increase the odds a court later treats your work as privileged—mere factual investigations are more prone to being deemed non-privileged. For attorneys, consider negotiating a provision that the client will pay your fees if the investigation becomes the subject of future litigation. Failing to include this protection can be costly for a firm.
- Written report or verbal summary. Consider whether a written report is a good idea. The client might think it wants one, but the attorney needs to consider the many reasons why a written report might come back to bite the client.
- Who receives the report/summary. Typically, the results should be communicated on a need-to-know basis. Warn recipients not to share the results, as doing so may waive the confidentiality of an otherwise privileged investigation.
- Upjohn warning. Employees you interview should be made aware, among other things, that you represent the company, not them individually. This warning, derived from Upjohn Co. v. United States, 449 U.S. 383 (1981), is particularly important in investigations that could lead to criminal exposure for the client or its employees.
- Order and structure. In most cases, I conduct preliminary interviews to get the lay of the land about the facts, potential witnesses, location of relevant documents, and other big-picture issues. I usually want to collect and review documents before I interview key witnesses so that I have nailed down the story as much as possible and can use the interviews to fill gaps and test witnesses’ credibility. Always have a plan, but be flexible depending on how the work unfolds.
- Document preservation and retention. Do not forget to do this.
- Invoices. If your work is highly secretive or sensitive, you might need to direct your firm to refrain from transmitting invoices during the investigation, as these may tip employees off to the subject of the investigation.
- Internal communications. As in all professional dealings, draft your emails as though the whole world might read them. In the hurly burly of an intense investigation, members of the team might joke or be casual in their communications; this is to be avoided.
If you are a business person who discovers potential misconduct at your company, it is critical that you take quick action and assess the situation. An internal investigation can help you determine the full extent of any misconduct and determine next steps and liability.
Conducting an internal investigation can be daunting, but choosing someone who has experience in the proceedings increases the likelihood of a smooth experience.
