by GAVIN R. VILLAREAL
Math intimidates many lawyers.
And yet, in almost every large commercial
lawsuit, math is unavoidable
because it is integral (pun
intended) to damages.
Given the complexity of the
damages models in some cases
and the difficulties that may arise
in proving or challenging damages,
an accounting expert is
frequently indispensable in most
high stakes litigation.
Most attorneys are familiar with
the basics of choosing an expert,
such as reviewing past testimony,
reading materials the expert has
authored and searching for issues
that may undercut the expert’s
credibility. But in addition to these
steps, lawyers should consider
some additional issues when
choosing an accounting expert.
1. What’s the accounting expert’s
role? Before the search begins,
spend some time thinking about
the accounting expert’s role. Like
lawyers, accountants have a wide
variety of specialties and certifications.
An expert with the right
credentials for the job can be a
Does the case involve allegations
of fraud or internal wrongdoing?
If so, perhaps a certified fraud
examiner or an expert certified in
financial forensics is needed. If the
dispute involves a business valuation,
an expert accredited business
valuation might be appropriate.
Taking time early on to figure out
how to use an accounting expert
will help narrow the search for the
right person and will save money
in the long run.
2. Ask how the accounting expert
can help. Experts help explain
complicated subjects, but don’t wait
until trial to put an expert’s skills to
the test. Ask potential candidates at
the outset how they can help.
Accountants often can suggest
new approaches or tactics that an
attorney might not have considered.
Early brainstorming sessions
can assist the attorney in figuring
out what working with the accounting
expert will be like.
3. Consider the audience. While
an accounting expert may have the
credentials to perform the work, a
litigator always should consider how
the fact-finder in the case—whether
a judge, arbitrator or jury—will view
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5 Tips for Choosing the Right
an expert’s background.
For instance, if the lawsuit
revolves around the application of
an accounting standard or rule, an
accounting professor or similar academic
might make the best impression.
A former regulator who was
charged with enforcing the rule
could also be very persuasive.
In a lawsuit involving a business
transaction, though, someone
with real world business experience
might be a better choice.
For example, if the suit involves
a claim for lost profits from the
sale of microprocessors, an auditor
with experience auditing the financial
statements of microprocessor
manufacturers might be right for
the job. Another alternative might
be a former chief financial officer of
such a company, who could opine on
damages while providing first-hand
perspectives on the business issues
built into the damages model.
4. Can the expert testify ef fectively?
Don’t become so focused
on an expert’s credentials that you
lose track of an equally important
attribute: the expert’s ability to
testify clearly and convincingly.
An accounting expert retained
on a consulting-only basis may be
helpful and useful without ever
having to testify. But if testifying is
on the expert’s to-do list, it is vitally
important to find someone who can
do so effectively.
Depending on the complexity
of the issues, some of an accounting
expert’s testimony may go
over the head of a judge or jury
unless communicated properly, in
language. All the degrees and
certifications in the world are of
little help if the expert can’t explain
accounting concepts to the average
juror. Similarly, an expert who gets
flustered under cross-examination
may do more harm than good.
5. Who really will do the work?
The amount of information and documents
that an accounting expert
must review in many complex commercial
lawsuits can be daunting.
As a result, some experts employ
teams to help with document review,
factual analysis and even writing
initial drafts of expert reports.
Using assistants may be the most
cost-effective approach or may be
necessary given time constraints.
But if an expert intends to use
others for any part of his work, the
attorney must know that in advance.
Understanding the expert’s work
plan to review and analyze the
case information is also critical,
particularly if the expert employs
tools, testing and sampling.
Meeting and vetting team members
can be as crucial as choosing
the right expert. The expert’s team
can serve as consultants to a great
extent, allowing counsel to vet
ideas or theories without polluting
But don’t allow an expert to delegate
away so much of the detail
work that they can’t persuasively
argue their opinions (or open
the door to a challenge based on
the limited amount of time they
have worked to develop those
opinions). When called to testify,
the expert must know all of the
critical documents in the case and
be able to support every opinion
expressed. An expert’s credibility
will suffer if he can’t explain the
basis for an opinion because he
didn’t do the work.
A good accounting expert can
substantially impact the damages
recovered through settlement or
trial. Considering these issues will
help ensure litigators choose the
best expert for the case.
Reprinted with permission from the August 18, 2014 edition of the Texas Lawyer © 2014 ALM Media Properties, LLC. All rights reserved. Further duplication without permission is
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AuGUST 18, 2014
can suggest new
tactics that an
attorney might not
sessions can assist
the attorney in
figuring out what
working with the
will be like.
Gavin R. Villareal
is a litigation
partner in Baker
Botts in Austin. He
focuses on complex
and co-chairs the
for the American Bar