Asset Investigations and Due Diligence: Your Lawyer Helps Maintain Secrecy
In the past month, two divorcing clients contacted us and wanted asset searches performed without signing up us through their divorce lawyers. Here is the advice we gave them, as we give all our clients:
“Sign us up through your lawyer. If your husband ever discovers that we are looking at him, he could subpoena our report.”
The advantage of routing everything we report through your lawyer? If your spouse ever discovers the existence of our report and sends us a subpoena, your lawyer can argue that the report is protected by the attorney-client privilege and work product doctrines, both of which are intended to make it easy to confide completely in your attorney.
Failure to including your lawyer in the engagement can cause major problems. We had a client (who was himself a lawyer and should have known better) who hired us personally to find out about his soon-to-be ex-wife’s activities. Mostly, he wanted to analyze cell phones that his wife had previously used but were now used by their children. He had paid for the phones and so had the right to look at them.
Problem: He paid us out of his checking account. When his wife successfully obtained his bank records during discovery, she found the check written to our firm and promptly sent us a subpoena.
We had no defense against providing the material, and told our client he would have to get his divorce attorneys to attempt to quash the subpoena. That’s an expensive procedure that may work, but would certainly decrease any leverage you may have against the other side.
When you sign up through your attorney, the rules are simple. All email to us must also be to your attorney, and your attorney should be on the phone if you ever need to talk to us.
Easy to arrange, and can save needless headaches and lost advantage later. After all, if the other side reads our report which says that we suspect Husband has money in Brokerage X in Los Angeles, the first thing that may happen is that the account at Brokerage X is closed and the money moved elsewhere.
While that could eventually be tracked, look at how much extra time and expense it would take to do it. All preventable with a simple engagement letter signed by your lawyer.
Want to know more? Visit our website at Charlesgriffinllc.com, and see the sections on asset searches here and due diligence here.
You can also watch Philip Segal’s short video, Fact Finding for Everyone, here:
