This is the second in a three-part series about the challenges facing lawyers engaged in internal investigations. Part one focused on the special considerations attendant to an attorney’s representation of a corporate entity in these matters. This installment focuses on best practices with respect to fact-finding efforts performed during an internal investigation.
Challenge #2: Fact-finding — Doing it the right way
An internal investigation must be both thorough and credible. Without those two features, its results will be of limited use to a company for purposes of internal diagnosis and remediation, much less for purposes of communicating with government prosecutors or regulators. Indeed, thoroughness and credibility are essential where the results of the investigation will be disclosed to the government. Disclosures to the government that include inaccuracies or significant omissions may actually compound a client’s problems: The government may lose confidence in the reliability of the information — or worse, the candor of those providing it — perhaps placing the company at risk of an unfavorable exercise of prosecutorial discretion or a loss of cooperation credit in the process of achieving a resolution.
As a threshold matter, a key element of conducting a proper internal investigation is ensuring that relevant documents are located and made available for review. This means that appropriately targeted document preservation and retention procedures, which encompass both hard copy and electronic records, should be implemented as quickly as possible, including the suspension of any procedures in place for routine document destruction (an easily overlooked corollary). Speedy and thorough document preservation is important for securing the evidence necessary to conduct witness interviews and make well-supported conclusions about the conduct under investigation. It also serves as a prophylactic measure to limit the likelihood of document tampering or destruction by employees — and, if necessary, provides the company with a defense against allegations of spoliation or obstruction of justice.
A second key element of the fact-finding process is to correctly conduct interviews of employees and third parties who can shed light on the issues being evaluated. Here arises yet another nuance of an attorney’s representation of a corporate entity in an internal investigation: namely, the need to administer an “Upjohn warning” (or “corporate Miranda warning”) at the beginning of an interview with an employee witness. The warning usually involves informing the employee of the following items: (1) The attorney represents the corporation and not the employee; (2) the interview is covered by the attorney-client privilege, which belongs to and is controlled by the company and not the individual employee or the lawyer; and (3) the company may decide, in its discretion, whether to waive the privilege and disclose information from the interview to the government or to other third parties.
The administration of an Upjohn warning serves two goals. First, it provides an attorney with a means of fulfilling his ethical obligation not to mislead an employee whose interests may be adverse to those of the corporation. In giving the warning, though, counsel must remain mindful of the delicate balance between satisfying his ethical obligations and unnecessarily chilling the employee’s willingness to provide information and cooperate in the investigation.
Second, the warning is what enables counsel to cloak the interview with the attorney-client privilege and to prevent the individual employee from usurping control of that privilege. In the absence of a warning, the employee may reasonably believe that the company’s counsel is his own, potentially giving rise to an implied attorney-client relationship. The existence of that relationship provides the employee with what is effectively a veto power over the corporation’s ability to waive the privilege, if it so desires, with respect to the contents of the interview. Furthermore, the investigating attorney may find himself conflicted out of continuing to represent the company.
Finally, the fact-finding process requires counsel to be cautious about the ways in which his demeanor and approach to the interview may influence the responses of witnesses. An internal investigation should be viewed as an opportunity to collect and synthesize relevant facts, not a chance to push a witness into adopting a particular version of events. This sounds simple in theory, yet in practice, it can be difficult for some attorneys to avoid the tendency to inadvertently transform the interview from an investigative mission into a witness preparation or “wood shedding” session. Tactics such as using leading questions, commenting on what other witnesses recall, or suggesting how a witness might respond to other evidence, though appropriate in other circumstances, should be employed sparingly and with caution in most internal investigations. When used, the objective of any such strategies should remain to facilitate a thorough and credible investigation.
Next month’s topic
As the fact-finding stage of an internal investigation comes to a close, an investigatory lawyer must advise his client about next steps, including a possible disclosure to the government and/or a waiver of the attorney-client privilege. Part three of this series will discuss challenges confronted by counsel as an internal investigation nears completion and resolution.