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Investigating Private Companies

This article has been archived and may no longer be updated.


Genie Tyburski, Web Manager, The Virtual Chase


   Originally published by Law Office Computing (Feb/Mar 2002) under the title, "Click and Go Seek." Revised to reflect resources and strategies current as of the date appearing at the end of the page.


7 April 2002. Lawyer X stops and turns abruptly at the sound of his name. He grins as he spies Lawyer A waving to him from a few feet away. X walks toward her and they stand in front of the courthouse chatting.

All too soon, thinks X, Lawyer A steers the conversation toward work. It's not that he doesn't enjoy discussing legal issues or research strategies with her. It's that he thought he had finally worked up the courage to tell her how he feels and to ask her out.

"I have an interesting assignment from Partner Tenacious," A tells him. "I have to learn as much as I can about our new client, Private Company XYZ."

She explains that Tenacious wants more than the basics about its operations. He wants to impress the client with the lawyers' knowledge of its industry, competitors, customers, products -- especially those that may be in development, and the like.

Lawyer A also mentions that she reviewed the memo X wrote a couple of years ago when he investigated ABC Private Company in San Francisco (In Search of ... Everything? Aug/Sep 1999). She consulted several of the sources he had noted.

"I have some information about the industry and the company's products, but how do I find competitors, customers, and information about what may be in development? This sounds like competitive intelligence. Shouldn't we hire an investigator?"

Hiring an investigator, or a researcher skilled in uncovering business intelligence, is probably overkill for this assignment. After all, the subject is the client. Partner Tenacious could simply ask for the information he wants.

But impressing a client never hurts. Moreover, Lawyer A is a second year associate who still has a lot to learn about potential sources of information and research strategies.

As they walk back to the office, Lawyer X suggests a few online sources and electronic research techniques. He recommends that she begin with a search for market research reports. These typically provide useful and timely information about the industry, including its market size, key players, mergers and acquisitions, regulatory concerns, costs, profitability, and more.

In addition to databases available on Westlaw and LexisNexis, lawyers will find market research reports at Northern Light * and MarketResearch.com. At Northern Light, you can query the database by company name, or browse available reports by industry. You can also enter keywords (brand name, product category) and then limit the search to a specific industry.

A second research strategy entails the use of an EDGAR database that allows for full-text searching by keyword. This rules out all cost-free sources.

X typically logs in to LivEDGAR to conduct a search of public company filings with the Securities and Exchange Commission, but he could accomplish the same research with other commercial databases like LexisNexis' EDGARPlus.

Query the EDGAR database using the private company's name as a keyword. Do not limit the query to the company name field. Initially, at least, search the entire text of all filings.

Sometimes public companies list private companies as competitors. This strategy may also yield names of officers, who were former employees of the private company. X relates an occasion whereby he ran such a query and found a former employee, who had worked in various senior product development positions. The individual talked to X about his former company quite willingly.

Another technique involves searching trade literature and works especially well in online research systems like LexisNexis and Dow Jones Interactive that support an "at least" proximity connector. Command the system to retrieve articles where the name of the company appears at least five times, and the truncated form of the word, competitor, occurs one or more times. Limiting the query in this manner practically ensures that the search yields articles that discuss the company.

In the LexisNexis News library, for example, you would enter the search statement:

atleast5(privatecompany) and competit!

In Dow Jones Interactive, try:

atleast5 privatecompany and competit$

Moving on to a fourth strategy, Lawyer X recommends examining the company's Web site. While the amount and quality of information varies from business to business, a company Web site may reveal information about the organization, its subsidiaries or affiliates, new products, customers or clients, regulatory concerns, industry issues, and more.

Before leaving the company Web site, look for a jobs database or want ads listing. These may provide clues regarding the development of new products, or plans to expand geographically or in a related service or product area. They may also provide key information about affiliated businesses or individual plants. Lawyer X remembers learning about a U.S. private company's sales abroad from a want ad.

Sometimes companies post want ads in newspapers or at Web sites like Monster Board, which maintains a database of classifieds. Fortunately, Monster Board enables searching by keyword. Enter the company name to find available positions. If the name of the company contains a common word like "mars," you will retrieve several irrelevant hits. You can weed through them quickly by scanning the far right-hand column, which contains the name of the company posting the ad.

Another site, CareerBuilder, enables querying classified ads appearing in multiple news sources as well as at job Web sites. The news sources cover many U.S. major metropolitan areas, but CareerBuilder does not include Monster Board's huge database of almost one million ads.

A fifth technique involves scouring the Web sites of relevant government agencies. The company's Web site may have provided clues about its regulatory concerns. It may, for example, have informed readers about its commitment to the environment or to workplace safety, or about a policy against the use of child labor in its overseas plants.

After connecting to the appropriate government agency Web site, look for public record databases, comments submitted to the agency, FOIA documents, and other public information that may provide more insight. A company that spends a fair amount of Web space on issues relating to the health and safety of its employees, for instance, may have some OSHA violations in its past. You can uncover information about such violations by accessing the agency's Establishment Search database.

Turning to a sixth strategy, Lawyer X suggests reviewing what people say about the company. Google Groups provides a large archive of public conversation dating back to 1981. If a company name search retrieves too many messages, try limiting it by adding keywords that describe the type of information that interests you; e.g., lawsuit, competitor, names of trademarks or products, strike, labor, etc. Since Google does not enable keyword truncation, you may have to run the query with relevant forms of the word added one at a time (e.g., mars competitor, mars competition, mars competing).

As the lawyers approach their office building, Lawyer X tells A about Web services like Spyonit that monitor changes on a Web page. If you find something of interest at the private company's Web site, you may want to know when information on those pages changes. Spyonit sends notification about such changes to email addresses, pagers, cell phones, Palm VII, or by instant message. Similar services -- TrackEngine and InfoMinder -- also track changes to Web pages.

"Oh, boy," Lawyer A frets, "I hope I remember all of this."

"I'll email you with the highlights," X offers.

"You're the best!"

Not giving himself time to consider the possibility of dating her any longer, Lawyer X blurts, "I have two tickets for the Pennsylvania Ballet. Would you like to go?"

Seconds pass during which X forgets to breathe. When A asks him if he meant the offer as a date, he has to gulp air before replying that, indeed, he did.

Now coy, A answers: "X, I thought you'd never ask."

* Now available only to paying subscribers of Northern Light. (Return)


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Created: 7 April 2002
Revised: 18 October 2007 (no text revisions)
URL: https://www.virtualchase.com/articles/archive/private_companies.html

Suggestions: Genie Tyburski, tvceditor [at] virtualchase [dot] com