Forensic accounting firms across the country are struggling with a new self-created pyramid crisis. These large and middle sized firms have dozens, hundreds or even thousands of CPA’s, CFE’s CIRA’s working on forensic issues. What they do not have is experienced forensic expert witnesses who can testify at depositions, hearings and trials.
The pyramid consists of a few, usually less than 5-10% of their experts who are experienced testifiers and who travel around the country testifying on behalf of the firm. The remaining accountants, damage experts, fraud examiners, etc, are employed behind the scenes as trained support staff. These supporting experts perform research, conduct analysis, run the numbers and draft the expert reports for the testifying experts. The supporting experts may even “attend” hearings and depositions but are rarely afforded the opportunity to testify themselves.
The crisis arises when one or more of the testifying experts:
*Gets sick and cannot testify
*Retires or move on to another company
*Is too busy to take on additional work or
*Gets burned out traveling across the country constantly in crisis/trial mode.
An experienced financial expert has done support work for a forensic accounting firm for 12 years. He is highly knowledgeable, well-credentialed but is never trained to or permitted to testify. The “testifying” expert at the firm has a massive heart attack and is laid up for 6 months. The supporting expert must take over the cases, get trained in providing high quality testimony in large cases and also win over the confidence of the clients who ask:
“How often have you testified”?
Extraordinary measures must be employed to get the expert up to speed quickly and win over the confidence of the very concerned large clients.
This kind of example is being played out in various iterations in many forensic financial accounting firms.
WHY DO THE TESTIFYING EXPERTS FAIL TO TRAIN THEIR SUPPORTING STAFF
There are a variety of reasons why the testifying experts do not get their support staff up to speed including:
* They are not getting paid to do so
* They may be concerned that this may impact their draw in the future
* They do not have the time to do so
* They do not have the tools to teach their staff to be testifying experts, etc.
This failure to have more trained supporting experts costs the forensic accounting firms millions of dollars a year in:
* Lost income as testifying experts usually bill out at a multiple of support staff
* Lost business when the company can’t cover an assignment with trained staff and
*A tremendous amount of lost clients when an untrained expert is sent to testify and has a poor result
Forensic accounting companies both large and mid-size are starting to invest in training their experts in testifying skills. This encourages new blood to take on business, diversifies the talent pool, and leads directly to increased income and profits
Steven Babitsky is president of SEAK, Inc. SEAK has trained many large, small and mid-size financial accounting firms in addition to the IRS, Secret Service, DOD, FAA, FBI and many other governmental agencies.