While waiting in the hallway outside the courtroom to testify as an expert witness, I thought of all the ways my testimony could go wrong. I had hours to contemplate opposing counsel’s questions for me. It was my first time testifying, and I didn’t want to blow it. But I relaxed as I eased into the witness chair and stole a glance at the jury. They were ordinary people who were just hoping to understand my calculations. I led them simply through the financial matters. From the looks on their faces, I think they understood.
In my testimony, I closely followed the main points of my prepared report. The counsel who had hired me showed large exhibits from my report, which illustrated my points. We easily walked the jury (and the judge) through the numbers. Opposing counsel tried but failed to confuse the jury members. I knew I had hit a home run when I saw the foreman nodding each time I made a point. His new understanding of the issues would prove invaluable during jury deliberations.
Competent and convincing expert witnesses are a vital part of cases involving economic damages and other financial calculations. Traditional accounting, financial and fraud examination skills just aren’t enough when it comes to litigation. A financial expert witness must be able to qualify as an expert in court and then effectively communicate in a written report and oral testimony to an opposing lawyer, a judge, and a jury who probably aren’t accountants or fraud examiners.
The best financial expert witnesses help win cases by artfully and simply communicating the facts. And you can learn how to do it.
Becoming an Expert
Simply hanging out your shingle and saying you’re an expert witness won’t make it so. Many attorneys don’t want to take a chance on a newcomer who hasn’t developed a successful track record.
It takes time to build a client base. Some new professionals have the luxury of developing track records of expert witness testimony while learning from experienced expert witnesses who work at their firms. Attorneys hire those firms, and the younger staff members eventually are given more responsibility on cases until they finally testify in deposition or court.
But other fraud examiners and accounting professionals aren’t so lucky. Maybe they’ve had their solo practices for a while and have been developing their professional skills but not acting as expert witnesses. If this is you, be prepared to spend some time developing relationships with attorneys. You’ll eventually find an attorney who’ll recognize your technical skills, take a chance on you, and hope that you will testify well. At first, the attorney probably will give you a small case. If you pass the test, you can use that attorney as a referral in your future marketing efforts.
Building an expert witness practice begins with defining your area of expertise. I could refer to myself as a fraud examiner, forensic accountant, or an investigator. All are appropriate titles for the work I perform, but they say different things to different clients. The expert doesn’t necessarily have to limit herself or himself to one job title but should carefully consider when and how to use each one.
While an expert’s livelihood depends upon being selected for cases, that living might be equally dependent on refusing the wrong cases. Many attorneys have thanked me for not stepping out of my area of expertise even when they really wanted to work with me. Identifying what you don’t do well is crucial to the litigation game. I’d much rather refer an attorney to someone else with the right credentials and expertise than take a chance on not doing the absolute best job on a case.
The Right Expert For the Case
Assuming that you’re experienced in the field, the next hurdle is actually being selected for a legal case.
An attorney will want your curriculum vitae and your lists of prior testimony and published articles. You’ll need to be familiar with the Federal Rules of Evidence as they apply to the testimony of expert witnesses.
You’ll need to know, among other things, that the federal rules require that:
- the expert discloses her or his opinions in an oral or written report;
- the expert identifies the basis for all opinions;
- the report includes a list of information considered in forming the opinions and exhibits used as supporting documentation for the opinions; and
- the expert lists qualifications including articles written for publication and history of expert witness testimony.
Attorneys have many options for expert witnesses including accountants, Certified Public Accountants, private investigators, finance specialists, economists, and fraud examiners, and will often seek referrals from other attorneys. Obviously, the best financial expert witness prospect will have strong technical, analysis, and communications skills.
Beyond technical skills, an attorney will be looking for an expert who testifies well and is credible and likable to juries. What good is an opinion if the expert can’t get anyone to believe or understand that opinion?
An attorney will be looking for someone who can immediately discuss accounting issues and case theory in a way that the attorney understands. This often indicates whether the financial expert will be a good communicator throughout the case.
Examination and Reporting
Testifying in court as an expert witness might be the pinnacle of a case, but plenty of legwork is done before getting close to that point. A competent expert will perform an analysis with the courtroom in mind, and will collect and record key dates, documents, and discussions.
Good experts maintain file notes that are devoid of gratuitous comments and irrelevant information. They never destroy documents or notes to sanitize a file. A thorough and logical paper trail during the examination or investigation makes it easier to prepare a report. And a clean file makes cross-examination easier and less painful.
The best expert reports follow a specific logical format. In some cases, that means documenting key points of the case in chronological order. In others, it might be more appropriate to outline the case by grouping facts by person or entity involved in the matter. Use a format that anyone could understand.
Avoid technical accounting, financial, and fraud examination lingo and jargon as much as possible. If it’s necessary to include some technical terms, clearly define them in lay terms. If you use multiple terms for the same concept, define them all and make it clear that they have similar meanings.
I separate all calculations and methodologies into simple components and attempt to explain each step of the calculations so there’s a logical flow to the numbers. The explanations include references to pertinent documentation, a discussion of the reasons I made the calculations and the exact ways I calculated them, and how the calculations are important to the final numbers.
Explain all estimates you used in calculating losses, damages, and other financial items. Attorneys, judges, and juries will need to know the reasons each estimate is correct and reasonable and the ways they fit into the numbers.
Visual aids in the report are invaluable to help convey financial findings to a judge and jury. A juror might not understand five dense paragraphs explaining the ways an injured plaintiff’s income decreased after an accident, but a line graph highlighting that decrease in income might make it quite clear.
A good financial expert will include just the most helpful and relevant documentation with the report. This could be a check used in a theft, a report from the accounting system that shows key figures, or a detailed schedule showing the way a particular number was calculated. I don’t include detailed calculations in the body of the report bud do show a summary of my work and attach the detail.
These methods all sound complicated but they’re part of a straightforward process of connecting the dots and not excluding anything.
A good written report doesn’t guarantee the expert will be an effective witness in court. Qualifications, credentials, and a strong report are important, but you and the attorney must now prepare oral testimony that the judge and jury will believe.
Write a logical and focused testimony outlines of the case’s facts that are relevant to the opinions and that all will understand. Like the expert’s report, the testimony should be free of technical language and industry jargon, if possible.
Good testimony feels natural and flows well and isn’t a game of cat-and-mouse between the attorney and financial expert witness. I find that juries react better to someone who’s pleasant and supplies matter-of-fact answers rather than someone who intensely spars with opposing counsel.
Establish rapport with the judge and jury and draw them into your methodology and opinions. Some experts feel it’s important to look at the attorney asking the question, and then turn toward the jury to provide them with the answer but this can look rehearsed and unnatural. When in court, I’m in a conversation with many individuals so I look at the attorney, judge, or jury members at appropriate and natural times.
Judges and juries respond better to likable witnesses who can display appropriate body language, make eye contact with the attorney or audience, read the audience to determine the level of understanding, and exhibit a pleasant demeanor. If you need to brush up on these skills, look for continuing education classes that teach expert witness topics. You can also work with an attorney on role-playing court testimony.
As with the written report, complex calculations can bog down your testimony, so you have to connect the dots logically with simple explanations of each step. Use large exhibits of charts and graphs, similar to those in the written report.
The opposing counsel knows that you’ll be trying to avoid a trap by anticipating the line of questioning, but you should still focus on the current question and provide a truthful answer to it or you might head straight into that trap. For example, you might be anticipating that the attorney will try to get you to say that you made an error in a calculation. You become so engrossed in proving that your calculation is correct (even before being challenged on the issue), that you fail to properly answer questions about your background work and methodology relating to the numbers. You lose credibility because you don’t focus on the questions at hand and don’t give the best answers to those immediate questions.
Opposing counsel might try to force you to just answer “yes” or “no” to certain questions, which could be misleading to the judge and jury because a nuanced response is necessary. Stand your ground and give a detailed answer. If opposing counsel won’t allow you to explain an answer, then simply testify that a “yes” or “no” answer isn’t possible.
Opposing counsel also might try to trap you by asking hypothetical questions. Don’t be afraid to answer reasonable hypotheticals. But the best way to answer confusing or far-fetched questions is, “I’d rather not speculate.”
Preparation and Delivery
Attorneys have to use skilled and experienced expert witnesses. You must make sure that opposing counsel, judges, and juries understand the opinions and how they were derived.
Accounting and financial matters normally bore and confuse average people but you have to find ways to not only keep their eyelids up (with decorum, of course!) but clearly communicate facts and numbers. You must read the audience and make sure that all parties understand the methodology and results.
Your preparation (or lack of it) might determine the outcome of a court case.