Whether researching the complete history of a prospective client or the background of a key witness, attorneys use public records to complete an unknown picture and minimize risk to their case, firm, or organization. Similarly, banks and other financial institutions use public records to increase confidence in approving loans, protecting the reputation of the institution and avoiding costly regulatory oversights.
So, what can attorneys learn from banks and other financial institutions about risk prevention and the effective search of public records for mission-critical data? Here are three lessons for lawyers, based upon our latest customer survey of bank personnel use of public records searches:
Lesson 1: Reputation matters
“The [reputational] risk is very high. At the end of the day, you want to know who your customers are. When you are moving that kind of money, you need to make sure [customers] are legitimate and that the [financial] institution is not being used as a vehicle for money laundering,” says an AVP of Financial Intelligence.
When exploring new clients, vendors, or key witnesses for a case, performing due diligence to uncover each individual’s personal and business history can help to avoid a potential reputation crisis down the road. With our fast-paced, digital world, even the smallest detail — a missed or ignored bankruptcy filing, litigation, or DUI — can cause a disaster. If the opposition were to uncover previously unknown information about a star witness and present the information during trial, the outcome could be detrimental to the case and have a long-lasting impact on the firm and lawyer’s reputation.
Lesson 2: Protecting your assets
“[Financial Intelligence Units] don’t bring money into the bank. We are preventing customers from doing fraudulent activities,” says an AVP of Financial Intelligence. “So, it’s good to understand that even though we aren’t bringing money in, we are preventing unnecessary spending, litigation, and lawsuits.”
Whether it is time, money, or physical property, protecting your law firm’s assets and minimizing risk or surprises can have a huge impact on a law office’s future and bottom line. Although risk mitigation can feel like just another expense to a firm focused on client billings, both banks and law firms have a financial interest in knowing who they’re dealing with and what risks an individual might present.
Lesson 3: Beware of misdirection
According to an AVP of Financial Intelligence, “I had a case that I was assigned and there was very little action needed. As I was searching the candidate, I researched the name variation spelling and sure enough, the customer showed up as wanted for embezzlement. Without taking the extra step to look for partial name matches, I would have missed this, and it potentially could have resulted in a major issue.”
Even the most seemingly straightforward client needs to be fully investigated to ensure that crucial background information isn’t missed. Omitted information could resurface during a trial, ultimately resulting in an adverse outcome or reputational risks. By using reliable public data sources and searching for any absent data, attorneys can prevent damage to their client relationships.
Across multiple industries, fraud investigators diligently look for ways to save money, time, and minimize risks. By taking notes on how financial institutions have leveraged public records to minimize risk, a law firm’s investigators can ensure they’re best-equipped to protect their interests.
