Editor: Please tell us about your professional background and experience.
Neier: I began working in public accounting in 1965 and worked as an auditor until 1975. I then formed and headed the technical research and review department of one of the nation's largest non-Big 8 accounting firms which ensured quality control throughout the firm's national practice. That department had the responsibility of resolving disputes between a client and the firm, or between a manager and a partner in the firm, regarding accounting principles or auditing standards. In 1985 I began to do work in the litigation consulting and forensic accounting area. In 1989 I left the firm to become the Regional Director of Litigation Consulting and Forensic Accounting Services at one of the Big 8 accounting firms. I joined the largest single office accounting firm in the country in 1993 to create and build their litigation consulting and forensic accounting services department. In 2006, shortly after that firm was sold to a large national firm, I left to become a partner in the Litigation Consulting and Forensic Accounting Services Department at the accounting and business advisory services firm Eisner LLP.
Editor: Why did you decide to move to Eisner?
Neier: I prefer the atmosphere of a middle-market firm, so when my prior firm was sold to a large national firm, I began to look for another place to practice. Eisner is a very significant local firm in New York City and the Tri-State area. It is the 10th largest firm in New York City and the 20th largest firm in the country including the Big 4. Additionally, through our independent membership with Baker Tilly International, Eisner is able to service clients worldwide. The professionals at Eisner have an incredible reputation when it comes to the quality of the services and responsiveness they provide to clients which also led to my decision to join.
Editor: Would you tell us about Eisner's Litigation Consulting Group and the services it offers to clients?
Neier: The Group consists of over 20 professional staff who render litigation consulting and forensic accounting services. We provide services to litigators, as well as corporate counsel and insurance companies. We assist lawyers in handling the accounting, financial, and economic aspects of any matter they have in litigation or potential litigation.
Editor: Do you focus on a particular type of dispute?
Neier: The Group has a broad practice and has handled litigation matters in just about every area. I specialize in breach of contract cases and post closing purchase price adjustment disputes. In breach of contract cases, my main focus is damage analysis. The cases I have handled include both international and national breach of contracts, breach of partnership agreements and post-closing purchase price adjustment disputes involving privately held and Fortune 500 companies.
Editor: Has there been a growth in the number of cases filed in any of the legal disciplines that your firm handles?
Neier: We have noticed an increase in the area of intellectual property infringement and breach of contract litigation. We have also noticed an increase in the number of fraud investigations we handle, including frauds committed against not for profit organizations.
Editor: At what step in the litigation process does a client contact you?
Neier: The first time I work with an attorney he or she will ask about our qualifications and then they will surprise us with the fact that the case is going to trial in a week and our expert report will need to be completed in three to five days. The next time, the attorney will call us at least two months before we're scheduled to go to trial. By the third time, that attorney will call us as soon after his or her client receives a complaint or at the time he or she is drafting a complaint on behalf of a client. Attorneys who work with us on a regular basis engage us earlier and earlier in the litigation process. These attorneys recognize that it is more cost-effective for their clients if they contact us as early in the litigation process as possible.
Editor: What skills and experience does a litigation consultant bring to enhance the litigation planning process?
Neier: Litigation consultants have the skills to decisively address complex financial and accounting issues. The litigation consultant can help the attorney assess the strength of his or her client's positions with respect to these issues and provide an objective analysis of the opposition's assumptions and methodologies. We compile the numbers and compute the damages, where applicable, and offer a fresh perspective from a financial expert's point of view. The litigation consultant can, of course, be the testifying expert and help explain complex accounting and financial concepts to the trier of fact. Litigation consultants provide creative problem solving to the financial and economic issues that arise during litigation.
Editor: Do you work with clients during damage calculations to develop strategies on whether it would be more adventageous to settle a dispute or proceed with the litigation?
Neier: We do that all the time. We assist the attorney in all phases of the litigation process, from pre-complaint to post-trial. We help in the drafting of complaints that contain technical accounting language, help in answering or preparing interrogatories and document requests. In addition, we assist the litigator in taking the depositions of fact witnesses and of the other side's expert witnesses. We evaluate settlement offers, which can come along at any time in the litigation process. We also evaluate cases as the litigation proceeds and compare costs with our damages calculation to determine whether it is in the best interest of the client to settle the matter rather than go to trial. I recently completed a case where we were asked to do a preliminary damage analysis and, based on our preliminary analysis and our recommendations, the attorney decided, and was able, to enter into settlement discussions and the case was settled, with a favorable result for his client, based on that preliminary analysis. This process saved the attorney's client thousands of dollars in litigation costs.
Editor: Are there benefits to establishing an early dispute resolution or alternative dispute resolution program?
Neier: That decision must be made on a case by case basis. For certain contracts that companies enter into, it is entirely appropriate to have an alternative dispute resolution (ADR) provision in the contract for the resolution of disputes. The detail in each of these provisions will depend on the parties' relationship and the type of contract entered into. Some parties choose to include general provisions while others include explicit clauses that go as far as to name the arbitrators that should be appointed in the event of a dispute. We are called upon frequently by lawyers drafting contracts and other forms of agreements to assist them in the wording of the ADR provisions as those provisions relate to a potential dispute regarding accounting issues. We often assist attorneys in preparing the provisions of an agreement that deal with post-closing purchase price adjustment transactions and the provisions of the ADR clauses that define the role of the accounting arbitrator in the event of a post-closing purchase price adjustment dispute.
Editor: When developing those clauses do you have any advice for in-house counsel as far as what to look for in neutrals?
Neier: Yes. If the case involves financial or accounting issues, in-house counsel (and the firm's outside counsel) should look for a neutral who has a strong accounting background, preferably as a CPA. While other arbitrators may have excellent arbitration skills, it is critical to have someone who also has a solid accounting background because they will be better able to understand each side's case and reach an equitable and sound decision in a cost-efficient manner.
Editor: I understand that you have served as an arbitrator in several arbitration proceedings. Does your litigation consulting experience come to bear on the decision making process in these disputes?
Neier: Definitely. Most of the arbitration work that I do is in the post closing purchase price adjustment and breach of contract area. I have served as a neutral appointed by the court, as the neutral on a three arbitrator panel, as the sole arbitrator, and as a party-appointed arbitrator. These were all binding arbitration matters. Since these types of disputes usually involve complex and technical financial and accounting matters, my financial background and the understanding of the litigation process that I have gained through my litigation consulting experience, give me the specific skill sets needed in these types of arbitrations.
Editor: Do you work through one of the arbitration agencies?
Neier: A lot of our work follows the guidelines set by the American Arbitration Association or JAMS. I have served in arbitrations that are under the auspices of those organizations and some work that has been independent of them.
Editor: Would you tell our readers about some of the common mistakes that parties make in preparing for an arbitration proceeding?Neier: The most common mistake that I have seen parties make is that they do not anticipate the amount of time and planning that is needed at the beginning of the arbitration process, with the assistance of the arbitrator, to establish discovery rules, policies for correspondence between the parties and the arbitration schedule. It is important to devote a reasonable amount of time in a planning hearing to deal with these issues. Optimally, ADR will expedite a resolution of disputes so that the matter is resolved with the same objectivity as a judge and jury but without the delays, complications, and expenses that typically arise during litigation. Better organization at the beginning of the arbitration process will greatly facilitate these objectives.
Editor: Should companies include mediation as a mandatory step before arbitration proceedings begin?
Neier: Mediation should not be mandatory but is an excellent process for parties to consider before going forward with arbitration or litigation. Mediation should not be a prolonged process unless that process is moving in a positive direction and resolution is a strong possibility. If the mediation is stalled in a stalemate, then the parties should revert back to arbitration or litigation quickly so as not to prolong the process and incur additional expenses that will not be cost-justified.
Editor: Where do you expect the forensic accounting and litigation consulting practice to be five years from now?
Neier: When I began rendering this type of service, the area of practice did not even have a formal name. There were some accountants working in the field but it was not as widespread as what you see today. Now, litigation consulting and forensic accounting services are recognized disciplines within the public accounting profession. Standard setting bodies are addressing this area, colleges are offering courses, certificate programs and even undergraduate degrees with specializations in litigation consulting and forensic accounting. I currently teach one of these courses at New York University. It is an area that has become a specialization and requires specific skill sets and training.