Interview: Michael Rothman: From Lawyer to High-End Private Investigator

Career opportunities often fall into a lawyer's lap when he or she least expects it. The key is to seize the opportunity.

A case in point is Michael Rothman who moved to New York and took a job in the global investigations department of a leading investigative consulting firm to secure an interim source of income while studying for the bar. The company's only in-house lawyer unexpectedly left, which presented Rothman with the opportunity to assume a bigger role on the business side of the company. Eventually, he became Senior Vice President of Investigations.

However, Rothman comes from a family of entrepreneurs (his father owned and operated a lumberyard for 25 years), and he decided he was more suited to being his own boss than being an employee. Starting at his kitchen table with $30,000 in savings, Rothman set his sights on providing due diligence and investigative services to high-end financial clients such as investment banks, hedge funds and private equity firms.

His firm - Rothman Consulting - now services a growing roster of clients in the Wall Street community helping them identify potential "landmines" that could prove damaging or embarassing such as securities violations, criminal records, fraudulent credentials, factual misrepresentations, and character issues before the client proceeds with a major transaction such as a merger or acquisition, or makes a key hire such as a hedge fund manager.

Click below for a full interview with Michael.

JD Bliss (JDB): You’ve used your training as an attorney to found one of the country’s preeminent firms providing investigative due diligence services to corporate, financial and professional service clients. How did you get your start on the investigative consulting path after you got your law degree?

Rothman: After I got my J.D. degree in 1993 from Golden Gate University School of Law in San Francisco, I moved to Florida, passed the bar exam and practiced there for about a year. I moved back to New York City with the objective of taking the New York and New Jersey bar exams and entering practice in New York. While I was studying for the Bar I took a job in the global investigations department of a leading investigative consulting firm, to give myself an interim source of income while using my legal research skills. It turned out that the investigations firm was a great opportunity. They were looking for someone with a legal background to direct and prepare their research reports for clients, and when their only in-house lawyer left I was able to take a bigger role on the business side of the company. Eventually, as Senior Vice President of Investigations, I managed all aspects of their global investigative research, reporting and business development.

JDB: Did you ever intend to return to practicing law?

Rothman: Certainly I wanted to maintain my professional standing as a lawyer, but primarily because it provides great context and insight for my investigative consulting practice. Today I’m admitted to the Bar in New York, New Jersey and Florida, and I’m also an officer in the New York Army National Guard’s Reserve JAG Corps. But investigative due diligence consulting has remained my great interest and passion.

JDB: When and why did you move from your original company to starting your own consulting business?

Rothman: It’s fair to say that I’m great as a boss, but not so great as an employee. I was brought up in an entrepreneurial family – my dad owned a lumberyard for 25 years, and I helped manage it for several years after I got my undergraduate degree. I’ve always had the drive to pursue my own ideas, and while I was at my first firm I had the opportunity to develop a surveillance camera that parents could use to monitor their children. It had great potential, especially in investigating “shaken baby” cases, but the company wasn’t interested. So in 1997, I decided to leave and started my own company, Rothman Consulting (www.rothmanconsulting.com) to pursue this specialized idea and establish an investigative firm with broad-based capabilities.

JDB: How did you get the business off the ground?

Rothman: I started at a very basic level, literally working at the kitchen table. I used savings and financing for my initial investment of about $30,000, which went for such fundamentals as licensing and equipment. I started small with the surveillance camera idea, but my objective all along was to focus on creating a boutique consulting firm for the due diligence investigation needs of high-end clients: investment bankers, hedge and private equity funds, law firms and other professional service organizations, corporations and high net worth individuals. Working for them was completely geared to my legal training. It enabled me to know what my clients needed, where the best research sources were, and what to avoid – which, as the recent problems of Hewlett Packard showed, is as important as knowing what to do. Within a year we were largely out of home care provider surveillance work, and focusing on due diligence investigations.

JDB: What does your due diligence work consist of? What would a hedge fund or investment banker turn to you for?

Rothman: We give them the critical information they need to identify potential problems before making a decision on a merger, acquisition, key hire or some other important transactional decision. We conduct our due diligence investigations on three levels, that begin with database research and move up to include direct inquiry and on-site investigation. Because we want to solve problems for our clients and not create them, we take the time to properly source, confirm and analyze our information, and put it into the right context. We’re looking for the problems that can break a deal or cause damaging headlines when they come out after the fact: securities violations, criminal records, unpaid tax liens, fraudulent credentials, factual misrepresentations, character issues.

JDB: As President and CEO of your company, what do your day to day activities involve? Are you still active in due diligence investigations yourself?

Rothman: Even though I have to make the effort to pull myself out of day-to-day concerns and focus on profitability and business development, I’m still very actively engaged in our client work. Our entire organization is built on the idea of collaboration among the members of the firm. Everyone in Rothman Consulting knows about all the cases, and either I or another senior officer review and sign every investigative report. This is a place where we all enjoy coming to work, and a big part of that is because we work to the highest ethical standards – and it’s my job to ensure we do that. Ultimately our work is a lot like a typical law office, where everyone knows what needs to be done and pulls together to do it.

JDB: You make the comparison to a law office – how important is your background as a lawyer to what you do?

Rothman: It’s invaluable, and really makes us unique as investigative consultants. All our investigations are covered by privilege and confidentiality. Everything we do is in absolute compliance with the applicable laws and regulations, and we make sure our clients are in compliance – whether it’s the Fair Credit Reporting Act, the Gramm-Leach-Bliley Act, or some other statute. We have the lawyer’s responsibility, and toughness, to tell our clients that something like pretexting is wrong, and that we won’t do it.

JDB: It sounds as though you take a great deal of satisfaction in what you’ve achieved. How would you sum it all up?

Rothman: We have good growth potential but I’m quite comfortable with where we’re at now, both in what we do and how we do it. I go home and sleep well knowing that we are ethical and aboveboard, and do the right thing. We offer a great work product at a fair price, and I can honestly say I’ve never had a cross word with a client. Put all that together with the enjoyment of being my own boss, and the business has been tremendously satisfying.