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To most effectively represent the client, a smart attorney will often times call upon a forensic accountant to assist him in analyzing and preparing a case.
By working in tandem with an expert, the attorney can provide the client with an assessment of the case’s strengths and weaknesses as well as its value at the outset. This allows the client to make intelligent and cost-effective decisions early on.
Below are examples of forensic accountant services that attorneys should seek to make a winning case:
Valuation: This is when the precise value of a business must be determined. This can come up when business partners consider splitting up. Another example is in a matrimonial action in which one spouse owns a business and its value must be determined in order to calculate the amount of the divorce settlement.
Investigative: The forensic accountant may be brought in to help determine whether fraud has been committed; and if so, quantify the loss suffered by the party. He or she might also be asked to “follow the money” – meaning to find the source and trace the dissemination of funds or property.
Interpretive Analysis: This type of work may involve a forensic accountant looking at a contract and, if the contract is vague or ambiguous, trying to understand the economic reality behind one side’s interpretation of how it is designed to work.
Traditional Damage Analysis: Forensic accountants are often consulted to determine lost profits and to compute actual losses. In a securities fraud case brought by a customer the accountant could be asked to determine damages based on lost investment opportunity.
To make full use of the forensic accountant, the attorney would be wise to engage him or her in discovery. Additionally, the forensic accountant may be invaluable in assisting the attorney evaluate the testimony and prepare for cross examination of the other side’s expert.
When an expert is retained by an attorney, there should be a written agreement between the expert and the attorney which details the exact nature of the work that the accountant will perform, and the stages of the litigation the contract will cover. The accountant may be retained to provide consulting services only and/or provide testimony at a hearing or trial.
