When a PI Service is Better Than An Internal Investigation

When a corporate crisis occurs, companies must decide whether or not to begin an investigation – followed immediately by another pressing question: Should that investigation be internal or should the company hire private investigation services? Sometime the law or corporate policy will dictate the precise steps to follow during these situations. But sometimes things aren’t that straightforward, and businesses need to know the pros and cons of an internal team vs. a private investigator.

These are complicated matters. However, to help out, we are examining the most important factors in making this decision, and why companies may be well advised to choose one or the other.

The Size of the Company

While the size of the company isn’t always a factor in choosing a private investigator, it can be a key decision point. Smaller businesses facing a serious issue – especially one related to potential crimes – often don’t have the resources or internal talent to create a team that’s able to effectively investigate the matter. Here, contacting a third-part private investigator experienced in business issues is usually the best option.

For larger companies and corporations, the situation becomes a little more complex. These companies may have the resources to put together internal teams of their own for an in-house investigation and subsequent report. The question is if they are easily able to add to existing compliance/legal teams (usually only an option for large corporations), or using existing personnel for the job. If the company doesn’t have employees capable of performing the investigation, hiring an outside investigator is often a more effective choice than trying to hire a brand new team.

What is Being Investigated?

The nature of the crisis will also inform the company’s investigation decisions – both the issues and potential crimes being investigated, and the people investigated. Internal teams will be much less effective if they have to investigate company leaders, large sections of the company, or parts of the company that could affect their own future.

In the excellent K&L Gates guide to Conducting Internal Investigations, some useful parameters are laid out: If the misconduct is “limited and discrete” then an internal investigation can be conducted effectively by audit departments, legal teams, compliance management, and so on. If the problem is significant, widespread throughout the company, or involves senior management, then the company is better off using a private investigator to avoid any problems.

Nature of the Data Involved in Investigation

Businesses must also consider the data that will be required during the investigation. Private investigators are, by nature of the services, entirely discrete. They won’t be sharing any of the information they have to sort through, by both law and contract. Nonetheless, there may still be times when businesses don’t want anyone looking at their data, regardless of protections. These situations can come up when companies are working with very sensitive copyrights or other proprietary information, for which an internal investigation may be preferred. It’s also applicable to companies working with government-related information, which will fall under its own unique requirements.

Time Frame for the Investigation

Sometimes, it’s important or necessary for companies to quickly finish an investigation by a certain deadline. There are two different ways to look at this challenge.

First, hiring a private investigator is an effective way to save time. PIs are already set up, can begin immediately, know what to look for, and are experienced in creating complete reports at the end of an investigation. This makes outside investigations the best option for saving time, especially if new hires have to be made otherwise.

The other perspective is for particularly complex companies. In these cases third-party investigators may have to take a significant amount of time learning company structure, company platforms, and the details of the crisis. If the business can’t find an investigator with the right specialties, setting up an internal investigation may be the faster option.

The Cost-Benefit Analysis of Creating New Teams

If a company faces a choice between creating a new team or hiring a private investigator, a cost-benefit approach helps examine the expense differences. For most companies completing a hiring process and adding to a team to create an internal investigation will be significantly more expensive than hiring a third-party investigator.

There is an exception to this. Particularly large corporations may choose to permanently expand investigatory teams to deal with ongoing issues – we recently saw Microsoft make such a move. In these cases, long-term costs are ultimately lower, and the company may well predict savings on litigation costs as well.

Investigations Leading to Legal Action

Is legal action expected as a result of the crisis? If there’s a good chance, then hiring a private investigator carries many additional benefits in court. An independent investigator cannot easily be accused of having bias or stakes in the outcome of the investigation during a court battle. Private investigators also have plenty of experience in testifying for courts, and make reliable witnesses when necessary. The legal benefits of an internal team simply don’t match up.

By | 2019-09-28T12:04:20+00:00 September 28th, 2019|Categories: El Dorado News, Private Investigator Industry News|