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About Corporate Investigations: H5 Wanted to Know

Survey suggests investigations are on the rise, while companies try to address  growing ESI challenges. 

In today’s increasingly complex and evolving legal and regulatory environment, investigations are an unfortunate fact of life for most corporations. Usually time-sensitive, they can be especially difficult to manage given the nature of today’s electronic data landscape and the fact that most investigations involve a certain degree of data probing.

As a provider of solutions that help companies with investigatory efforts, H5 decided to take step forward to better understand this intricate landscape.  We wanted to hear from those who are involved with the management and strategy of investigations, including in-house counsel, professionals whose responsibility it is to select and manage vendors and resources, and others involved in an investigation response.

In July and August of 2019, we thus partnered with our friends at Above the Law to conduct a survey targeting those on the front lines of investigations. We asked respondents to share information on everything from the types of investigations their companies face, to the tools and methods they use to handle them. During the course of the survey, more than 300 respondents from a variety of industry verticals shared their insights.

Here are a few key findings:

  • Respondents expect the number of investigations in their companies to increase over the next 3 years. Nearly half of survey respondents said their companies face more than 50 potential investigations of various types per year—22% said more than 100—and nearly two-thirds think they will increase, primarily due to company growth and increasing regulations, including GDPR and other privacy related initiatives.
  • Companies face investigations on many possible fronts, from employee misbehavior to massive regulatory investigations. Asked about the types of investigations their companies face most often, respondents overwhelmingly chose employee/workplace investigations (43%), with regulatory/governmental investigations following up at 24%. Despite growing concerns about data breach as hacking incidents increase, cybersecurity investigations were the least common type of investigation.
  •  Costs and lack of resources are the most common obstacles to conducting an investigation. The biggest challenges respondents said they face are a lack of resources and internal coordination to handle them, which could be worrisome given the anticipated increase in investigations. Rising costs are of concern as well, but that may be easier for many companies to address than finding ways to efficiently and effectively manage the investigations that arise.
  • Companies are not unprepared for investigations, even though respondents noted resource strain as one of their major challenges.  Sixty-four percent of respondents said their company has a department or team specifically dedicated to handling or directing corporate investigations, with most reporting to the legal department.
  • The majority of respondents (67%) indicated that their companies proactively monitor networks and electronic data for suspicious activity, but that’s not the most common trigger for an investigation. The most common trigger cited for an investigation was a private or public complaint by a consumer, employee, or competitor.
  •  Analytics technology was chosen as the second largest area of spend for an investigation.  While outside counsel was the top area of spend, analytics technology was next, with 59% of respondents including it in their top three areas of spend.
  • One of the things that adds to the costliness of today’s investigations is the existence of so much electronically-stored information (ESI) that could constitute evidence. A majority of respondents said that preservation and/or collection of data is involved for more than 25% of their investigations, with the healthcare and financial sectors apparently hit the hardest.


For more information gathered from those in the know, download the full report here:

 

Join H5 for a webinar on November 19, 1 pm ET, to hear more about the
investigations landscape and survey findings.
To register, click here


 

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