From being practical to dynamic, Jim shares how an internal investigation at a company is handled when something does not look right.
What drew you to the legal practice of White Collar Criminal Defense?
I didn’t start my legal career thinking, specifically, that I could be a White Collar Lawyer but I have always had a strong interest in helping people through difficult times. I’ve never been interested in debate for the sake of debate, nor one to look for a fight, but the idea of coming into a fight and serving others as the role of “protector” and “advocate” has always appealed to me.
Additionally, the subject matter is very interesting; the concept of highly intelligent and successful people becoming involved in illegal conduct – the apparent incongruity of it all – has always fascinated me. The inverse is equally captivating. That is … what drives the government in any particular case to take a set of facts that might typically lead to a civil violation or even no government action, and turn it into a criminal prosecution?
In order to get the best results for your clients, you have to see all sides of a story in any case.
When you first started practicing law, what took you by surprise?
When you start life as a lawyer, assuming you are paying attention, everything surprises you. One of the more surprising things was the dynamic of experienced trial lawyers … they can be in a court room and “fight it out” regarding evidence and law while having and maintaining professional relationships with their opponents. It is startling the first time you see lawyers like this who are engaged in a pitched courtroom battle then turn and ask their opposing counsel how their family is or share a joke.
How did you cope with your changing perceptions of how trial lawyers should behave?
Well, as you gain more experience, you grow to understand that this unique dynamic is more than just good manners. It is a recognition of each attorney’s duty to the court and its rules, as well as their client. It is practical. The exercise of discipline to concentrate on the case at hand rather than being distracted by peripheral and personal battles can make the difference between success and failure. An attorney’s focus on their own personal drama can’t do anything to advance the cause of their client. Things can get intense and sometimes it can blow up. But the baseline, by necessity, has to be centered on collegiality and integrity. As soon as I accepted this and mastered this skill, I felt ready to reach for a higher level in my legal practice.
Observation and imitation are good skills for those who can’t practice in a “trial by fire” format.
What other skills do you think a lawyer must have to be a “Successful White Collar Lawyer?”
They have to be emotionally intelligent. In order to get the best results for your clients, you have to see all sides of a story in any case. You also have to have a great work ethic to push forward through competing interests to get to the right result and you have to have the ability to take a punch and push forward. (Perhaps growing up as one of 6 children gave me a good start on that front.)
For those lawyers who aren’t privy to a big family, how else can they gain those skills?
Observation and imitation are good skills for those who can’t practice in a “trial by fire” format. For example, my undergraduate studies in history and military science gave me exposure to so many exceptional leaders and significant people who demonstrated leadership in the face of adversity. I also have experience as an Army officer and prosecutor which allowed me to put some of those lessons into practice.
You have conducted a number of internal investigations in the area of white-collar crime; can you share how this process works?
Regardless of the trigger, by the time I’ve been hired, the dynamic of the organization has already changed. There is concern, insecurity, and suspicion among key people in the organization.
Internal investigations are a lengthy process with many components. What I try to keep in mind at the onset of any investigation is the rarity that any company or organization is investigating itself out of general curiosity about whether something is amiss in the ranks. Much like the penchant of most people, myself included, who only go to the doctor when they are experiencing symptoms, companies typically call for an internal investigation only after getting wind that something is not right.
Keeping that in mind, I also have to take note of what led to the investigation: the initial information may come from a whistleblower, a concerning finding in an audit or serious allegations made in a civil lawsuit. Regardless of the trigger, by the time I’ve been hired, the dynamic of the organization has already changed. There is concern, insecurity, and suspicion among key people in the organization. And depending on the circumstances, the impact may have already begun to spread to those in the rank and file, some of whom may end up becoming key sources in the investigation. At this point, people are concerned about the future of the company, their personal reputations and career aspirations, and more immediately, their jobs. And before I begin any investigation, I have to take that all into account.
In some situations, certain executives or employees are already represented by counsel or may need personal counsel.
Once that’s done, the process usually begins with a series of meetings with leadership and key managers, during which the attorney conducting the investigation must: (1) listen and collect as much information as possible, and (2) reassure people and advise them regarding the process and the potential consequences.
It must be established that the attorney conducting the investigation is not the personal attorney to any of the officials, managers or employees they may come in contact with during the investigation. Rather, the duty is to the company or the company’s board of directors.
From the get-go, the attorney must also establish whether or not the results of the investigation will be published generally, disclosed to the government in certain circumstances, or remain privileged in some fashion, either as the product of the company’s attorney or under the privilege regarding attorney client communication. The best lawyers also know there must be an agreement from the outset as to whether there will be a written report of the investigation.
In some situations, certain executives or employees are already represented by counsel or may need personal counsel. This must be determined as soon as possible before interviews begin and documents are reviewed. There also has to be an agreement from the beginning regarding the parameters of the investigation and an understanding of the potential benefits and the potential adverse consequences.
The challenge of obtaining information while keeping witnesses at arm’s length is best met with courtesy and sensitivity, so I always recommend to our young lawyers that they work on developing these skills.
The next steps involve the collection of evidence through document review and interviews. The approach to interviews is critical. In conducting those interviews, we have the simultaneous and competing challenge of making witnesses comfortable enough that they might share potentially damaging information … while at the same time making it clear that we are not their lawyers.
This sounds intense and challenging! Any tips for success if someone decides to become a White Collar Lawyer?
The challenge of obtaining information while keeping witnesses at arm’s length is best met with courtesy and sensitivity, so I always recommend to our young lawyers that they work on developing these skills. Sometimes it also takes a couple of meetings to establish the relationship with a witness who is necessary to obtain critical information. This requires patience and understanding. So the earlier you can develop those skills if you want to be a White Collar Lawyer, the better your legal practice will be.
Just one more question … How do investigations regarding governmental organisations differ from the investigations you conduct for private companies?
The primary difference is how the information may be used. With investigations that involve government organizations, the ability to maintain control over the number of people who have knowledge of potentially damaging information is far more limited. Depending on the type of governmental organization, and the nature of the problem being investigated, it may be necessary to make findings public (when similar circumstances involving a private company may be able to be kept from public view).
James W. Kraus
Partner
Phone: (412) 263-4370
Fax: (412) 263-4221
E-mail: JWK@Pietragallo.com
JAMES W. KRAUS is a Partner at Pietragallo Gordon Alfano Bosick & Raspanti, LLP. His practice encompasses both criminal and civil litigation, as well as representation of clients in response to government investigations. He has conducted numerous internal investigations for private companies, governmental organizations and publicly traded companies. Prior to his career with Pietragallo, Mr Kraus served as a JAG criminal prosecutor with the U.S. Army’s 4th Infantry Division. He later served as environmental litigation counsel for the Department of the Army in Washington, DC.
Mr Kraus has extensive trial experience in a broad range of legal disciplines, including White Collar Crime, Financial Services Litigation, and Healthcare. He’s been named a Pennsylvania Super Lawyer in the area of Criminal Defense since 2012.
Pietragallo Gordon Alfano Bosick & Raspanti, LLP is a mid-size law firm with five offices across Pennsylvania, West Virginia, and Ohio and headquarters in Philadelphia and Pittsburgh. From the boardroom to the courtroom, we provide custom legal solutions that propel businesses, organizations, and individuals to reach their long-term goals. White Collar Defense is just one of our many practice areas. We also have strong core competencies in Business, Construction, Employment, Insurance, Product Liability, and Risk Management.
