Internal investigations are tough for in-house lawyers. It means that the company’s own employees or management have potentially engaged in some type of wrongdoing. That wrongdoing can range from breaking the business ethics policy to engaging in some type of criminal behavior. Regardless, when the circumstances arise, in-house lawyers owe a duty to the company to ensure that any internal investigation is performed properly and done in a manner that is defensible from attack. That is not an easy task. Today we discuss the fundamentals of a proper internal investigation.
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Ask the right questions from the start
Initial issues (and when to engage outside counsel)
Interviews (the key to a successful investigation)

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Ask the right questions from the start
Your first instinct when hearing about potential internal wrongdoing is to “get going.” While you don’t want to dawdle, it is worth your time to stop and think. There is a lot on the line potentially, and rushing into an investigation without thinking it through can cause more harm than good:
- Is the government involved or likely to get involved?
- Is the alleged activity criminal?
- Is there already a lawsuit or will this likely lead to a lawsuit?
- How many people know about the allegations?
- Could this materially affect the reputation of the company?
- Who is involved with this problem and are there corporate politics that you might trip over?
- Is this domestic or international or both in nature?
- Will this be something the C-Suite or the Board of Directors may get involved in?
- Will people get fired?
- How do I document the steps I took to ensure a proper investigation and outcome in the event my actions are ever called into question?
- Do I need to engage outside counsel now?
Thinking through these and other issues will lead you down the right path when you actually begin the investigation.
Have a process in place
The legal department should ideally have established written procedures for conducting investigations. These procedures should include forms and templates for various aspects, such as witness interviews, reports, “Upjohn” warnings, and confidential communications. The goal is each and every investigation is handled in the same manner and pursuant to the same rules, that is:
- Fairly and objectively develop facts and evidence.
- Determine the extent of wrongdoing, if any.
- Assess the company’s policies, processes, and procedures.
- How to fix any problems going forward/remediate issues going backward.
- Respond to any government investigation or any lawsuit.
- Show the company’s response was appropriate considering the issues presented.
- Protect shareholder value/limit damage to the company’s reputation.
- Ensure officers and directors have performed any duty owed to the company and shareholders.
- Limit the company’s exposure to lawsuits, fines, or other sanctions.
- Control the story (internally and externally).
- Make certain everyone feels they were treated fairly during the process.
A written work plan can be helpful, especially if anyone ever challenges the investigation. To start, have legal counsel run the investigation. This is the best way to maximize the availability of the attorney-client privilege. Your written plan should set out:
- The reason for the investigation and the objectives.
- The “scope” of the investigation – what is the mandate? The budget for the investigation.
- Who has directed that an investigation take place (the CEO, Board of Directors, GC, etc.) and to whom the investigative team will report.
- A mandate to preserve confidentiality and privilege, along with instructions for proper labeling of privileged materials.
- A directive to preserve evidence (electronic, hard copy, etc.), including that a “hold” be put on destruction of records relevant to the investigation.
- How the team will gather evidence (including what types of evidence and how).
- How often the team will report out preliminary results and the final report.
- Who will make up the investigation team.
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Initial issues (and when to engage outside counsel)
There will be a number of issues you will face at the beginning of the investigation. This is an area where outside counsel can be very helpful:
- Do you need to immediately suspend the employee(s) under investigation? Are they a risk to the business, likely to destroy evidence, etc. Likewise, do you need to suspend their access to company systems? Work with your HR team as you think through this part.
- How do you “lock down” the scene? You need to ensure that evidence is preserved and available, especially when the location is outside of headquarters. For example, what if the company permits “bring your own devices?” How do you preserve evidence on that employee’s laptop or smart phone?
- It’s important as an investigator to keep an open mind until all the evidence is in. You need to hear all sides of the story. Don’t pre-judge anyone’s innocence or guilt as doing so will almost surely lead to some type of bias in how you conduct the investigation.
- Do you notify law enforcement or regulators and if not now, when? Or at all? The advice of outside counsel can be extremely valuable here.
One of the most important choices you will have to make as in-house counsel is whether or not to bring in outside counsel. Typically, the decision hinges on several factors, including the seniority of the employees under investigation, is there potential criminal exposure, will the Board of Directors be involved in reviewing the investigation, and so forth. Involving outside counsel also gives you a better chance of claiming attorney-client privilege when it is appropriate to do so.
Your work plan should set out in detail how communications will be handled, including things like witness interview reports, summaries, marking for privilege designation, review of all substantive communications, etc. It is worth considering having everyone on the investigation team sign a confidentiality agreement as a way to underscore the importance of confidentiality and as an added precaution against leaks, which can be devastating to the investigation and the individuals involved.
Interviews (the key to a successful investigation)
Documents and witness interviews will form the factual foundation of your investigation. Witness interviews are often where the real action occurs:
- Schedule preliminary interviews with key witnesses as soon as possible.
- Have two people present at every interview – always have a witness as to what was said.
- Properly prepare for every interview, for example, have an outline to guide the questioning and review of key documents.
- Schedule the interviews at a time and place convenient for the witness. Do everything to put them at ease – you will get much more information this way.
- Put all witness interview summaries into similar form and style – use a template.
- Keep things pleasant and professional. It’s amazing what a calm, professional demeanor can do in terms of getting a witness to cooperate and become talkative.
- Be sure to begin each interview of company employees with an “Upjohn” warning. It is critical that you/outside counsel tell the employee that you represent the company and not them, that the discussion is privileged but the company controls the privilege and whether to waive it or not.
If it becomes apparent during the interview that the employee and the company may have conflict of interest with respect to the investigation or that the employee may be exposed to personal liability, you should advise them of the potential of hiring their own counsel. This doesn’t mean that the company and the employee are necessarily adversaries, only that the employee’s personal interests are potentially better served by having their own lawyer.
The final report
The last step in the investigation is preparing the final report, which can be delivered as either an oral presentation or a written document. Generally, not producing a written report appears more problematic than the contents of the report itself. The mere absence of a written report is, in itself, quite concerning. Regarding your report, consider the following:
- The report should be prepared by counsel for the purpose of providing legal advice.
- To whom does the report go? CEO, Board of Directors?
- The report should follow a standard template. The company should have a repeatable process in terms of the report format and the information provided, for example:
- The allegations or reasons for the investigation.
- A summary of the work plan and the efforts made to investigate.
- Background facts.
- What was found – key documents, witness statements.
- Outline of the policies/laws/regulations at issue.
- Application of the evidence found to the policies/laws/regulations.
- Any remedial measures taken or that counsel recommend should be taken.
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Above are the essentials every in-house lawyer can use to understand the basics of what is required to conduct a proper internal investigation. Now is the time to go back and review the legal department’s readiness for such an investigation, ensure standard guidelines and templates are in place, or update the plans and documents you already have. Identifying “go to” outside counsel before there is a problem can be helpful. If you have access to Practical Law, you have many of the materials discussed above ready to go in template form.