More than half of companies surveyed hired independent counsel in the past year to help with internal investigations, a move widely believed to reduce any punishment regulators might later mete out.

A majority of companies have hired outside counsel to help with an internal investigation in the past year – a sign that companies are concerned about how their handling of problems will be perceived by regulators and the public.

About 63 percent of over 400 U.S. and international companies surveyed by law firm Fulbright & Jaworski undertook at least one internal investigation with the help of outside counsel.

The act of engaging outside counsel at least makes the investigation appear more rigorous. "[If] there is a concern that you appear as credible as possible, hire outside counsel to conduct [an investigation] so they can discuss their results with the Department of Justice or others and tell them what the corporation itself has found," explained Layne Kruse, a senior litigation partner at Fulbright & Jaworski. Layne says the current number of outside counsel engagements is much higher than usual.

All regulatory agencies have their own list of factors to consider when determining what type of penalty to give the company, notes William McLucas, former head of the SEC's enforcement division, and now a partner at Wilmer Cutler Pickering Hale & Dorr. Both the Department of Justice's "Thomson Memo" and the Securities and Exchange Commission's "Seaboard Report" outline the credit given to public companies when they cooperate with the government. Both of those documents "include the extent to which companies self-report and self-investigate," explains McLucas. (For CFO's analysis of the SEC's Seaboard Report, see "The Limits of Mercy."

Additionally, in this Sarbanes-Oxley era, companies are hiring outside, independent counsel to investigate all types of business issues from accounting to disclosure, observes McLucas. "The issue relates to the increased responsibility that audit committees have under Sarbanes-Oxley," he said. It also underscores the "overall heightened sensitivity of board members to the company's exposure to harsh government enforcement proceedings as well as the risk that the board itself could be subject to enforcement proceedings," added McLucas.

[CLB: Somehow this implies that the old-fashioned role of an external auditor wasn't sufficient, or that it is reborn anew. After Arthur Anderson, has anything actually changed?]