Litigation support can involve anything from a calculation of damages in commercial litigation to financial analysis in a divorce, to bankruptcy reorganization and fraud and forensic accounting. Though litigation work for firms started decades ago with such jobs as uncovering hidden assets in divorces, it has evolved to now include more business disputes and fraud matters, according to Bernie Katz and Al Parziale, partners with Roseland, N.J.-based J.H. Cohn. "Every engagement is different," says Mark Vogel, shareholder with Fairfax, Va.-based Homes, Lowry, Horn & Johnson, adding that he's been involved in such cases as embezzlement, a lemon phone system, a civil engineering consulting firm trying to force out a partner, and the tracing of family funds being "stolen" by a family member, among others.
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Many practitioners specialize within the overall field of litigation support, says C. Brett Cooper, of Carter, Belcourt & Atkinson, Lakeland, Fla.. "We always undertake such engagements with the thought that we will ultimately testify at trial," he adds. "About 10 to 20 percent end up at trial."
The firm KLR, in Providence, R.I., does about a dozen engagements a year, according to Peri Ann Aptaker, principal. "We've been retained in a number of different roles in these types of engagements," she says, "including expert witness, non-testifying consultant, court-appointed master, and mediator/arbitrator."
"Prior to the filing of a litigation, we may be asked to assist in making a preliminary assessment of potential damages so that the attorney and client can assess the cost/benefits of filing litigation," adds Harold Martin, principal in charge of the litigation practice at Glen Allen, Va.-based Keiter, Stephens, Hurst, Gary & Shreaves.
The forensic accountant, more often than not, will be a direct part of the litigation environment, says David Glusman, principal with Bala Cynwyd, Pa.-based Margolis & Company, and will often be called upon to assist the attorney in understanding what the discovery materials that have been produced are, how they can be used, and what additional discovery requests may need to be made.
"We also provide advice regarding the tax consequences of the marital settlements, and assist in the negotiations of marital settlements," says Bruce Brown of the litigation practice of the firm Schultz Sheridan & Fritz, in Camp Hill, Pa. "We help the parties accept the financial issues, which become emotional issues, in a divorce. When working with the spouse who doesn't have a lot of financial background and who gets a sizable estate of liquid assets, we help them find an asset manager. In economic damages cases, we assist the attorney in evaluating the financial impact to the affected parties of a wrongful death or serious injury."
David Politziner, officer in charge of the litigation support practice of the New Jersey firm Amper, Politziner & Mattia, says the practice consists of a dedicated group of 23 financial staffers, including CPAs, economists, and analysts. Terry Simonds, an officer with the litigation and valuation group, says the practice involves a fair amount of divorce work and an equal amount of commercial litigation. AP&M did its first litigation support case some 30 years ago. "We've really grown the group over the past 15 years," says Politziner, citing increasingly "tremendous" amounts of litigation in the contemporary business environment, coupled with a general understanding of how financial people can help with these cases.
The Necessary Foundation
Litigation support and forensic accounting require creativity, Katz and Parziale say, as basic accounting skills and techniques are expanded to include investigative measures that tell a story that books and records alone may not reveal.
Ben Woods, litigation services expert with Heard, McElroy, & Vestal, Shreveport, La., says a firm typically is introduced to litigation support work because a good client has a claim against someone in the normal course of operations, and seeks the advice of his accountant. "This type of introduction often leaves the unprepared accountant saying he'll never again attempt to perform this type of work, because he didn't know what to expect," he says.
Director Lisa Meer of The GHP Financial Group says that to be ultimately effective as an expert witness, "the likely goal for anyone pursuing this career path, you have to be a very good financial analyst, and have the capability of strategic thinking. You have to understand causal relationships, to interpret how wrongful conduct of one party or entity could lead to financial damages. Lots of estimates and assumptions go into a damage calculation. You must be able to develop assumptions that can pass scrutiny. So much of what we do has to be documented in writing, and you must be able to narrate those findings either to a jury or to a judge."
A background in external audit is critical, says Woods. "A complete understanding of the tax implications of your analysis is important as well. The individual must be able to undergo extreme stress and always be in control, and must be able to think through, without panic, hypothetical questions that create confusion and distort the facts."
"The expert also needs to be familiar with the laws applicable to the matter at hand, and should be able to speak the lawyer's language," Aptaker says.
Michael Stover, partner with Brady Ware in Dayton, Ohio, says these engagements can generally be broken down into two basic types: (1) accounting practices and application of generally accepted accounting principles, and (2) valuation of business interests or of damages incurred. Adds Shawn McGregor, marketing director for Jackson, Miss.-based Horne LLP, "Our team does everything, from digging through historical data during the discovery phase to sitting as an expert witness if and when the case goes to trial."
Acquiring the Engagement
Word of mouth among New Jersey attorneys is the major marketing tool for AP&M, which also is a featured speaker at seminars and conferences to judges and attorneys. AP&M is generally hired by one or even both attorneys, says Politziner, the latter occurring when counsel seeks a valuation that both sides can rely upon. The firm has also been appointed by various courts. Simonds says some cases can be done quickly, and others can go on for years.
"We spend a great deal of resources marketing directly to attorneys," McGregor says. "While we do six to 10 direct mail pieces each year, it really comes down to relationships with the attorneys and law firms. Our partner who leads this area is constantly on the phone, and networks daily."
Raymond Dunkle, senior manager of valuation and litigation services for the Akron, Ohio, firm Brockman, Coats, Gedelian & Company, has found his greatest number of engagements comes from attorneys "with whom my firm or I, or both, have contacts. Once the attorneys find out one does good work, they'll come back. I've also had good results from public speaking engagements. In terms of divorce work," he adds, "do a case or two with one of the big divorce attorneys in town. Once the other divorce attorneys see the litigation professional with him or her, they'll be more likely to call." Banking relationships and contacts within the insurance industry are also avenues to explore for potential referrals, according to Katz and Parziale.
"We get cases due to our reputation," Brown says. "On several occasions after having been the opposing expert, the attorneys for the other parties call us to work with them on a future case."
Other marketing efforts work, too. Martin says a second major source of these engagements is internal referrals from his partners.
"The third source is from a party involved in the litigation. I focus my marketing efforts on attorneys," Martin says, "since they're the primary source. My marketing efforts consist of face-to-face meetings, continuing legal education presentations for law firms, and distributing a quarterly e-letter, among others." Martin has also co-authored a text entitled "Financial Valuation" (which includes valuation for divorce and other litigations), and distributes complimentary copies to attorneys.
At Margolis, the litigation support group conducts and markets a complete curriculum of seminars on topics of interest to attorneys, especially litigators, and in some cases the firm will also help to coordinate a CLE moderator for the event, according to Lisa Tierney, director of marketing. Professional staff are kept abreast of updated seminars, and are encouraged to mention the program whenever they're networking with attorneys, she adds. Tierney also produces a quarterly newsletter, The Legal Write, featuring articles written by the firm's professionals and that is sent to a purchased mailing list of litigators in the Philadelphia area. Margolis is also listed on strategic Net directories such as www.TASAnet.com, which features expert witnesses.