What would the consequences be for your company if you recognized significant issues with your balance sheet? Or if you suspected an employee of selling your intellectual property? What steps would you take if a shareholder attempted to blackmail your organization?

In these types of cases, the most prudent step to take might be to initiate an internal investigation. An internal investigation is a formal inquiry that allows an organization to look into allegations of legal or regulatory violations. These inquiries allow a company to determine the facts of the situation and begin developing strategies to address issues and defend themselves against law enforcement or regulatory authorities.

If you have reason to believe that an internal investigation might be necessary, you need the assistance of an experienced criminal defense lawyer in Pittsburgh to support you through the process. The seasoned team at Stanton D. Levenson, P.A. Law Offices has the knowledge and skills to contain internal crises and implement legal remedies. Call us today at 412-889-7270 or contact us online for a confidential consultation with a business litigation attorney.

Reasons Companies Conduct Internal Investigations

Business organizations initiate internal investigations for many reasons, including the following:

  • Suspected wrongdoing or misconduct– If you have reason to believe one or several members of your organization might face disciplinary action, an internal investigation can help you determine the facts before law enforcement or regulatory bodies get involved.
  • Harassment or discrimination complaints– Allegations of sexual harassment, racial discrimination, or similar issues can cause irreparable damage to your business. An internal investigation can allow you to address the issue and, if necessary, remove the offending personnel before the allegations lead to public consequences.
  • Regulatory requirements– If you suspect your company may face investigations from a regulatory body due to your financial situation, waste management, or issue with your building code, an internal investigation can help you address problems before you incur penalties.
  • Need to gather facts before taking disciplinary action– Some issues appear to require disciplinary action against one or more employees. However, acting too quickly can lead to severe backlash if the action turns out to be unwarranted. An internal investigation can allow you to determine the facts before you make any hasty decisions.

Key Steps in an Internal Investigation

An internal investigation generally involves several key steps, including:

  • Assigning an investigation team– The first step is to appoint internal personnel or external counsel to lead the inquiry. Ensure team members are objective and have relevant skills and knowledge to handle the investigation.
  • Preserving evidence– Issue a hold to maintain documents, emails, data, and other evidence that could be relevant to the investigation.
  • Identifying witnesses– Make a list of individuals who may have knowledge related to the allegations and decide who to interview.
  • Conducting interviews– Interview witnesses in a non-leading, open-ended way, with at least two team members present.
  • Reviewing policies and procedures– Examine relevant guidelines, protocols, and controls to understand whether they were followed.
  • Analyzing findings– Review interview notes, documents, data, and other evidence to make factual determinations regarding the allegations.
  • Preparing an investigation report– Document the process, key findings, and recommendations in a privileged report to leadership.

Working with an experienced internal investigations and employment attorney in Pittsburgh can give you the support and clarity you need as you move through each stage of this process.

Challenges and Considerations

While internal investigations aim to uncover the truth, companies must be mindful of the sensitive nature of these inquiries. Key challenges and considerations include:

  • Maintaining attorney-client privilege– Using external counsel allows companies to keep investigation materials confidential.
  • Avoiding interference with government agencies– Proceed cautiously if a government body is conducting its own investigation into the same matter.
  • Protecting employee due process rights– Ensure fairness by avoiding leading questions and giving employees a chance to respond to allegations.
  • Preventing retaliation against whistleblowers– Have anti-retaliation policies and closely monitor compliance.
  • Managing confidentiality and reputation concerns– Keep the investigation quiet to avoid damaging your company’s brand and employee morale.

Role of External Counsel

When deciding to conduct an internal investigation, hiring an external legal team with experience handling such inquiries is essential. The many advantages of working with external legal counsel include the following:

  • Providing clarity and objectivity– External counsel has no ties to company personnel and operates independently.
  • Maintaining privilege and work product protections– When you work with external counsel, materials produced through the investigation process can remain confidential.
  • Advising on legal risks and strategy based on findings– Counsel can provide impartial advice on the next steps to minimize liability.
  • Guiding interactions with state or federal government agencies– If a formal investigation arises, your attorney knows how to interface with regulators.
  • Representing company and individuals if formal charges arise– Your litigation lawyer can defend the company and any employees who face individual liability.

When Should You Initiate an Internal Investigation?

Knowing when to move forward with an internal investigation is critical. On one hand, acting too hastily can unnecessarily disrupt operations and damage morale. On the other hand, failure to take action can allow misconduct to continue and legal liability to accrue.

In general, it makes sense to initiate an internal investigation when:

  • You receive specific, credible allegations of wrongdoing that could expose the company to legal or reputational harm if true. For example, an investigation may be appropriate if a current employee reports questionable accounting practices to management.
  • There are signs of a systemic breakdown of policies, procedures, or controls. It may be wise to begin an inquiry, for instance, if expense reports reveal a pattern of improper spending across multiple departments.
  • A state or federal government agency contacts you regarding a potential violation or investigation into your company or employees. It’s wise to conduct your own investigation first to understand the facts.
  • A lawsuit or enforcement action has already commenced, and you need to uncover details that could affect your defense strategy.
  • You suspect a problem involving upper management that only independent external counsel can adequately investigate. Relying on internal personnel could present conflicts.
  • There are rumors or red flags of misconduct, and you need to conduct a preliminary review to determine if a full investigation is warranted.

The key is acting decisively when you have reasonable indications of serious misconduct but avoiding “fishing expeditions” based only on speculation. If you are unsure whether the time is right to begin, our attorneys can advise whether initiating an internal investigation makes sense based on the specific circumstances at hand. Contact our office today to discuss your situation in complete confidence with a criminal defense attorney.

Contact an Experienced Internal Investigation Attorney Today

The decision to launch an internal investigation into your own organization can feel like an enormous step to take. When the situation your company is facing warrants such drastic action, you need the assistance of an experienced legal team to help the inquiry go as smoothly as possible.

The seasoned internal investigation lawyers at Stanton D. Levenson, P.A. Law Offices can provide you with the insight, legal skills, and experience you need at every step of your internal investigation. Our attorneys will help guide the process with integrity and respect, fighting to protect your organization’s best interests at all times. Call our team today at 412-889-7270 or fill out our online form for a confidential consultation with a white-collar defense lawyer.