Resist or cooperate? The enduring dilemma for the corporate defendant: my experience suggests that resisting the investigation almost always leads to a better result for the company than had it surrendered at the outset.

• Author: Green, Thomas C.

On any given day, countless corporations and their officials are under criminal investigation by federal and state prosecutors or agency officials. Almost every corporate official and board member will, at some point, have to confront the question of whether it is better to surrender and buy peace or better to resist and defend in court ... or at least prepare to defend in court.

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I understand that there are many, both in my profession and in the business community, who would argue that resistance is not an option. And, admittedly, they could point to myriad incentives to acknowledging wrongful conduct quickly and cooperating with the government, whatever the cost and whatever the outcome. Their view is that the risk of trial and conviction with substantial penalties, as well as debarment or exclusion under federal law, all accompanied by incessant adverse publicity, is too great to bear. Nevertheless, my experience suggests that resisting the investigation almost always leads to a better result for the company than had it surrendered at the outset.

The principal objective of resistance is the development of defenses and other legal obstacles to convince the government to agree to settlement terms better than those that would be achieved through instant cooperation. There is no secret to this process: the only tactic available is to make the government just as fearful of the eventual outcome of the investigation as you are. The more insecure the government becomes about its case, the better chance for a successfully negotiated outcome.

When a corporation rushes to disclose to the government the results of its own internal investigation, or signals a desire to resolve the government's allegations early, the wrong message is sent. The most that can be said for such an approach is that fear of the unknown is traded for certainty, but that certainty is both expensive and painful.

The Justice Department's internal guidance to prosecutors in deciding whether to charge corporate defendants embraces a strategy of seeking deferred prosecution agreements rather than convictions if the organization commits to a rehabilitative program and adopts corrective action. But cooperation is very expensive and includes resource-intensive review and production of enormous amounts of documents and access to all relevant (and some irrelevant) corporate employees. More important, the early cooperation strategy forces corporations under...