Litigation Support: Hire Forensic Accountants Earlier to Build a Stronger Case

As an attorney, you know the success of your case often comes down to your effective use of expert witnesses. And since nearly all litigation has a monetary aspect to it, one key expert witness you need in your corner is an experienced forensic accountant.

You already know that forensic accountants prepare analyses of lost profits and other quantifications of damages, and they testify to their opinions regarding those damages. But did you also know that engaging forensic accountants earlier in the life cycle of the case can add far more value? If you wait until the last days of discovery to bring in a forensic accountant, then you might miss the window of time to request vital pieces of the puzzle that would have reinforced your client’s case.

Hiring forensic accountants sooner can also save you money in the long run. When forensic accountants are involved from the beginning of the discovery phase (or sooner), they know exactly how to locate the data they need, so they can spend their time more efficiently and effectively, and they require less of your time answering follow-up questions.

At the end of the day, engaging forensic accountants sooner helps you collect better, more relevant evidence to strengthen your case and help your client achieve the best outcome.

Other Forensic Services You Can Expect from an Expert Witness

Forensic accountants can deliver value for your client in ways far beyond rendering an opinion through an expert report. Here are six ways forensic accountants can help strengthen your case:

• Assessing feasibility of litigation: Very early on, forensic accountants can assist in the evaluation of the merits of the case to determine whether it’s worth proceeding with litigation. While some clients are determined to file suit no matter what, others might be swayed if the forensic analysis indicates they aren’t likely to get a judgment they’ll be happy with.
• Mediation or arbitration: Some jurisdictions require mediation or arbitration before a case can be brought to trial. During this phase, a forensic accountant can act as a consultant to present various scenarios based on different sets of assumptions. The forensic accountant may also assist the attorney in assessing the weaknesses of either side’s damages opinion to strengthen their negotiating position. When forensic accountants aren’t part of this process, attorneys and their clients might miss an opportunity to bring the case to a mutually satisfactory resolution before it heads to litigation.
• Settlement: Even those cases that do proceed to litigation are often settled before going to trial. When you engage a forensic accountant during the early days of the case, that expert witness can help you and your client structure a settlement offer (or, for plaintiffs, evaluate the offer’s merits). That way, you head off the need to develop an expert report.
• Discovery request and response: Based on the case at hand, what types of data do you need to request to have the most valid analysis? Forensic accountants can help put together the structure of the financial documentation you need to request. Again, the best results come from engaging them as early as possible in the process. If the forensic accountant is brought in late in the game, then you and your client might miss the opportunity to request (or appropriately respond to) vital pieces of data that would have made a difference in the outcome of the case.
• Document evaluation: When you receive thousands of documents, how do you know what you really have? Unless your legal team includes accountants trained in sifting through and evaluating the financial data contained in the documents, you simply don’t have an effective means to sort through reams of discovery files and understand what’s relevant to measuring or rebutting economic damages. Even after a team of paralegals has performed an initial review of the discovery files, forensic accountants can often find something substantive that the legal team did not even know they had.
• Depositions and cross-examinations: Any attorney who has engaged forensic accountants in the past knows the value of involving that person when preparing for depositions, especially when deposing the opposing expert. The same goes for cross-examinations. Are there weaknesses in the opposing expert’s opinion that present opportunities for the attorney to attack? Did they follow industry standards and appropriately apply accepted methodologies? Did they rely on sufficient relevant data?

What to Look for in a Forensic Accountant

When engaging a forensic accountant as an expert witness, you need someone who is accustomed to testifying in court and has a track record of taking volumes of complex data, boiling it down to its essence, and communicating it clearly and simply.

It’s also important to find someone who will work in sync with you and your legal team. The expert witness is independent and not an advocate for your client, but that does not mean you should just send off the data and wait to receive their opinion. You should communicate with your expert throughout the legal process about what’s most important and where they can spend their time most effectively.

At the end of the day, a forensic accountant’s opinions have to meet the standard of reasonable certainty, and that means they need the right information to form those opinions. Clear and consistent communication is important to achieve a favorable outcome for your client.

Don’t Leave Money on the Table

Remember: Engaging forensic accountants early in litigation allows you to identify potential risks and weaknesses in your case.  At the same time, waiting too late to engage a forensic accountant can mean that you’re leaving money on the table. During the first days after your client retains you to discuss the merits of the case, seek out a forensic accountant to discuss how they can help you, the type of information they’d like to see, and how much of their time they expect the case to require. Reach out to CRI’s team of forensic accountants when you’re ready to get started on the right path.