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Tips for Conducting Corporate Internal Investigations

By William Vogeler, Esq. on July 03, 2017 | Last updated on March 21, 2019

With some problems, you can just throw money at them and they will go away.

But with an internal investigation, spending money is just the beginning of dealing with a problem. In the end, the company may well pay more after the investigation is done.

In any case, there are no real shortcuts to the process. However, there are some tips:

Start Early

There is little "practical guidance on how to run an investigation in-house," according to Charles Hastie, regulatory head at the Clutch Group.

But first things, like damage control, first. In other words, find the leaks in the dam and plug them. If it's an employee, maybe a leave of absence will do. If it's a product, maybe it has to go on the shelf.

It's also critical to ensure early on that evidence is preserved and that no documents are destroyed in the course of business related to the investigation.

Get Counsel

At the same time, the company should engage outside counsel to determine the scope of the investigation. If the company receives a subpoena, for example, it may be the tip of an ice pick.

"Sometimes these issues can get away from you if, at the outset, you haven't identified what needle you're going to look for in the haystack," Valecia McDowell, a member at Moore & Van Allen, told Inside Counsel.

When it comes time to report, the conventional counsel is that it's better to report orally rather than in writing. That's because, especially if government lawyers get involved, they're going to want any written reports.

Time Disclosure

If the investigation starts to reveal a real problem, it's time to disclose it. Or is it?

By reporting early to the government, the company may attract unnecessary scrutiny to a problem that turns out to be insignificant at a cost that may be significant.

"Having the government involved can add tremendous cost, which you wouldn't have had to incur had you done an investigation first and then decided it wasn't something that needed to be reported," says Barry Pollack, of Miller & Chevalier's white collar and internal investigations group.

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