A recent, thoughtful law review article by professors Ellen Podgor and Bruce Green, “Unregulated Internal Investigations: Achieving Fairness for Corporate Constituents,” 93 B. U. L. Rev. 275 (2013), explains that the law governing corporate internal investigations permits—indeed, incentivizes—in-house counsel to promote the interests of the company at the expense of its employees. The authors argue that the law should be changed to make internal investigations more fair to employees.

Practitioners can draw important lessons from Green and Podgor’s critique of the law of internal investigations. Within the law as it now stands, in-house counsel can take steps to promote the fairness and effectiveness of internal investigations, while providing a vigorous representation of the company.

A Difficult Position

Internal investigations often put in-house counsel in a difficult position. While company lawyers are normally advisors to employees, an internal investigation changes counsel’s role in an important way: During investigations, in-house lawyers represent the company, not employees. Unlike other situations in which employees seek the advice of in-house counsel, in investigations employees may find their motives and actions questioned—and may wonder why their trusted advisor is not on their side.

The relationship between in-house counsel and employees is further complicated by the risk of corporate criminal liability. Under the U.S. Department of Justice’s Principles of Federal Prosecution of Business Organizations, the company’s “cooperation”—which includes the company’s willingness to disclose evidence of wrongdoing to the government—could be critical to avoiding indictment. To avoid the possibly severe consequences of an indictment, the best course for the company may be to find evidence of wrongdoing by employees, secure admissions from them, and then disclose the evidence to the government in exchange for “cooperation” credit.

Favoring the Company Over Employees

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