Corporate Monitors Costly, Influential
Corporate monitor agreements with the U.S. Justice Department vary to such an extent that they can have a big impact on companies that agree to them.
The agreements can last for months or years, they may or may not give the company a say in the monitor’s selection, and they differ in the authority given to the monitor, Corporate Counsel reports.
The legal publication reached its conclusions after reviewing 28 Justice Department deferred and nonprosecution agreements going all the way back to 1994. Monitors are appointed under the deals when a company has been accused of improprieties.
“Given that use of monitors is on the upswing, it’s important for general counsel—even those who think their company will never face these problems—to learn about the soft spots in the system,” Corporate Counsel wrote. “GCs can have enormous influence over the terms that define a monitor’s job.”
The publication also notes that monitors can be costly. Top lawyers charge as much as $1,000 an hour to serve as monitors, said Peter Henning, a law professor at Wayne State University in Detroit. “It raises the question: Are monitors worth the cost?” he asked.