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Why is Due Diligence Referred to as the CYA Investigation?

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Whether you are vetting a potential client, preparing to negotiate a settlement, bargaining through a transaction, or commencing a heated legal dispute, the more information you have, the better. A proper due diligence investigation will give you the leverage to come to the table from the strongest position possible and provide your law firm with the data you need to make an informed recommendation to your client. At Millennium Intelligence Agency, our due diligence investigations allow you to do right by your client and “CYA” in the process.

What Happens in a Due Diligence Investigation?

A due diligence investigation conducted by MIA is a professional investigation focused on a party to litigation or a transaction meant to give your law firm a complete professional, financial, and personal picture. Through due diligence, you’ll learn about all assets possessed by the party, from real estate to intellectual property, bank accounts, brokerage accounts, overseas accounts, business interests, and many others. We’ll provide you with data concerning debts, liabilities, contracts, current and prior legal disputes, and any other items that might affect the value of your claim or your ability to collect. You’ll also learn about any insurance policies that may be utilized in the pending matter.

How Does a Due Diligence Investigation Protect the Attorney?

People often refer to a due diligence investigation colloquially as a “CYA” investigation. CYA stands for “cover your ass.” Why is a due diligence investigation a CYA practice? Because it protects your practice, your reputation, and your own liability.

A due diligence investigation gives you insight into your own client as well as other key parties involved. You’ll learn about the financial health of all parties involved, uncover any assets that may come into play, review prior litigation that may or may not have been resolved, and obtain data relating to any other risk factors or potential boons relating to the matter. A due diligence investigation lets you come to the negotiation table or the courtroom fully armed with all information you’ll need to give your client the best possible advice concerning the matter.

Providing the most well-informed advice not only protects your client and their interests; it protects you and your practice. Imagine, for example, you advised your client to accept a settlement. Based on your cursory research and the representations made by the opposing party, the settlement is reasonable and, more importantly, it’s the most they can reasonably afford. Weeks after the papers are signed your client discovers the opposing party had an umbrella insurance policy that could have covered double the settlement amount. Now, your client wants you to explain why you cost them millions of dollars.

At a minimum, you’re facing additional legal headaches (at no charge to the client, mind you) and damage to your reputation. Your client may also view your lack of due diligence as evidence of legal malpractice. You did not give them the most educated advice, and your lack of thoroughness cost them severely. Your law firm might owe your former client damages for the financial loss they suffered, and you might even face discipline from the bar.

Conducting proper due diligence means that you have taken all reasonable steps to provide your client with the best data available, and your advice will come from the most educated position possible. There may still be facts that you could not have known–if the opposing party is fraudulently concealing information, for example, at some point that’s out of your hands–but you’ve done the best you can. Your reputation, your license, and your business finances are protected.

Qualified Legal Investigative Agency Ready to Provide Professional Due Diligence Services

If you are performing due diligence in advance of a settlement, gathering evidence for pending litigation, working to establish a financial profile, or trying to locate a missing party, Millennium Intelligence Agency is ready to offer you vital support. Call our licensed, thorough, and comprehensive legal investigative team today at 213-986-9888 for efficient and effective intelligence-gathering services.

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