11 Disadvantages Of Hiring a Private Investigator—And How To Avoid Each Pitfall

Editor's note: Fairet has been investigating cases since 2009, has handled thousands of cases since then, and has compiled in this article a list of 11 pitfalls to avoid--especially if you've never hired a private investigator before.

We wrote this article to provide you with a detailed explanation for our selection of each pitfall, and we end the article with a checklist you can use to avoid making any of these "rookie mistakes" mistakes. Also, if you're in a hurry, you can find a summary of the entire article at the bottom. Hope it helps!

That's an average price that only accounts for experienced private investigators (private investigation is usually not the place to hire the discount provider if your case is important).

If you want to know how much a private investigator would charge to work on your particular case, then you need to figure how many hours it might take the PI to do the thing you need done. Just ask a few PIs for a time estimate. That gives you some data on which to base cost estimates.

Disadvantage # 1

Private investigators charge high hourly rates.

So far, pretty obvious, right?

Well, what might be less obvious--but probably more important to know--is how you can determine whether the cost of hiring a private investigator is worth it. Because that's the point of the cost estimate you calculated anyway: you to want to be able to compare that estimated cost against the estimated or potential value/consequences. You really want to answer the question...

(Because...many things are expensive, but some of those things are worth it. The trick is to know how to tell the difference.)

So, to answer that question, you need to do (what is called) a cost-benefit analysis.

Quick Example

That mental process that starts when you read the sign above, that comparison of getting $50 versus losing your car/the $150 impound fee to get it back--that's a simple cost-benefit analysis. So you probably already know how to do this.

The case involved a cheating spouse and, of course, the question of whether hiring a private investigator was worth it.

Here's what a basic cost-benefit analysis might have looked like in that case, from the perspective of the client:

• I'm pretty sure my wife is cheating on me.
• After I confront her with evidence to confirm my suspicion, I'm pretty sure a contentious legal battle will ensue.
• That legal battle will address the issues of child custody, distribution of marital assets, and ongoing financial obligations such as alimony and child support.
• Even if I can prove that she cheated on me, a settlement will likely carry significant costs for both her and me--given many courts' tendency to "split the baby" in divorce and custody cases.
• If my evidence of her infidelity is not compelling, then she might be able to wrangle more concessions from me through pre-trial settlement negotiations.
• If I add up all of those potential costs to me, then I could quantify the approximate comparative value of hiring an experienced private investigator to dig up good, compelling evidence of my wife's wrongdoing.

To put this cost-benefit analysis in the husband's own words...

The total cost of having pay alimony/child support and splitting their house's equity could have been hundreds of thousands of dollars had he not found that evidence. So, when I asked him after the matter was settled whether he thought hiring a private investigator had been worth it, he did not hesitate: "absolutely!"

...because it is generally true that both litigation and divorce settlements can be very expensive.

Disadvantage # 2

The cost of hiring a private investigator might exceed the value of winning your case if the stakes are not high.

So far, we've discussed how high-dollar stakes in a case can allow for a high enough ROI (return on your investment of the fees you paid to the PI) to counterbalance that disadvantage, making it easy to still justify hiring a private investigator, even though you know that an experienced PI charges high hourly rates in absolute terms.

Not all cases have high-dollar stakes, though.

This is an important question, mainly because most of the so-called "cases" you encounter in life do not involve large sums of money. They're smaller, more bite-size, but still important enough to warrant the question.

When the case involves lower-dollar gains/consequences, then the cost-benefit analysis is not so one-sided as it was in the cheating spouse case we looked at above.

For example, let's say you connect with a potential date on Tinder. You are interested is going on a date with this person. But you also want to do enough due diligence now to make sure you're aware of any obvious signs that this person is a serial killer or an otherwise dangerous person.

The consequence of you not doing this due diligence could be injury to you or loss of life. But unless you show up on the date with $5,000 cash in your pocket, then the actual dollars at stake would be low. Your life and well-being are valuable, but they're hard to insert into a fully quantifiable cost-benefit analysis.

Thus, as rule, in thinner-margin cases such as the Tinder case above, you have to either amend how you do the cost-benefit analysis, to allow for inclusion of hard-to-quantify factors such as your well-being, or you need a way to evaluate the cost of a private investigator.

Disadvantage # 3

Low-stakes cases make it hard to find an appropriately priced PI, and also hard to calculate potential ROI if you do find a right-priced PI.

Because putting a dollar-value on your life and well-being is so subjective, I am not going to expound in this article on how you might go about doing that. Instead, I will just say that you can, and probably should, do that when appropriate.

(Consider, for example, only the headline of this article: "Ex-Girlfriend Of 'Tinder Serial Killer' Says He Was A 'Dream Guy' Until He Threatened To Kill Her.")

So, uh...with that shocking bevy of statistics now behind us, I will next expound on how private eyes charge for their services.

If you spend any amount of time "price-shopping" for PIs, then you will notice that there is a remarkable degree of homogeneity in the prices private investigators charge.

They usually charge by the hour, and that hourly rate is usually around $100/hour (again, accounting only for experienced PIs). Also, the prices they charge usually have little to no connection with the eventual outcome of your case--whether, for example, the evidence they dug up helped you to achieve a favorable outcome, and whether the fees you paid the PI proved, in the end, to have been a good investment.

The predominant pricing structure, in other words, is the unimaginative billable hour--there might even be an upfront retainer. In some cases, this might be perfectly acceptable. But in many cases, there are good reasons to avoid hiring a private eye by the hour.

...which I will explain.

Disadvantage # 4

Most private investigators only charge by the hour.

The major downside of the billable hour model is that it forces you, the customer, to bear all of the economic risk. This is also one of main reasons people are reluctant to hire attorneys: most attorneys use a billable hour pricing model, and that model forces you, the customer, to bear all of the economic risk.

As a customer, yes, I'm willing to pay the bill. But no, I'm not a fan of transactions wherein I carry all of the risks. In fact, call me spoiled, but I sort of expect nowadays that most services will either be designed to share the risks with me, by simply aligning our interests, or carry all of the risks for me, such as all-or-nothing, pay-for-performance models. Even in the most balanced of those options, the "aligned interests" model, what I am looking for specifically in a PI (or attorney) is someone who has a vested interest in me winning or losing my case, and whose pricing structure reflects that.

...which why all of these "blank check," billable-hour models seem to me about as crazy as carrying your horse around on your back.

Disadvantage # 5

Hourly pricing often forces all of the economic risk on the customer.

It comes the philosophy of ethics, and it regards one way to measure which party in a transaction has the greater responsibility to insulate both parties from consequent harm arising form the transaction.

(If you're an ethics geek like me, and this topic interests you, then read section 3.8 of John Stuart Mill’s Moral and Political Philosophy for a discussion of harm and offense.)

Some harms are unavoidable, while other harms can be avoided with varying degrees of effort. In ethics, if someone behaves in a way that harms someone else, there are three inquiries you can use for determining just how impermissible (in moral terms) that behavior is:

1. Is the behavior necessary? Or could it instead be abstained from with little to no consequence for the actor abstaining?
2. Is the effect of the behavior avoidable?
3. If the effect of the behavior is avoidable to some extent, how hard would it be for the person harmed by the other person's behavior to avoid that harm?

To explain this simply, I will use the example of loud music as a nuisance (rather than an important moral issue).

Is it necessary? Let's stipulate that person A's behavior of listening to this music is not necessary, and let's further stipulate that it's especially unnecessary to listen to it at loud volumes. Person A certainly enjoys listening to this music, and he might prefer to listen to it at loud volumes, because the entertainment value of the music degrades at low volumes, but the behavior does not rank very highly on something like Maslow's hierarchy of needs. So, insofar as it is not necessary, and insofar as its primary value is entertainment, abstaining form listening to this music at this time will impose little to no consequence on person A.

Is the effect avoidable? Let's stipulate that person B is studying by accessing a website via his computer, and that internet access only exists in this household in person B's bedroom. If person B were to leave the bedroom, he could no longer study.

Conclusion - Once you stack all of these factors up side by side, you could conclude that, insofar as person A has some sort of responsibility to not harm person B by interfering with his ability to study--and, perhaps, damaging his long-term career prospects, depending on the importance of the exam--then person A has a greater responsibility given the fact that his behavior is easily avoidable while the harmful effect of his behavior is not. That is the role that this question of avoidability can play in ethics, and you see similar examples of this dynamic in law, parenting, interpersonal relationships, etc. It's a widely applicable concept.

Disadvantage # 6

Because of the experience he/she has that you do not, your PI has a greater responsibility to eliminate unnecessary investigation costs than you do, but this still doesn't stop many from padding the bill.

Now, back to the topic of private detectives' (and attorneys') pricing structures...

Few people have sufficient experience to be their own general contractor. That's why almost everyone who builds their own house hires someone to be the general contractor: to plan the build, to delegate the work, to manage the project along the way, etc.

Once the plan is in place, people with hammers and nails start showing up to perform various jobs under that plan. It would be a mistake to assume that everyone who shows up with a hammer could also do the job of your general contractor. Some might be able to, but most probably could not.

Most general contracts I've ever known started as one of those various construction workers, and thus know how to do most, if not all, of the various construction jobs under the plan. But the general contractor's "unique differentiator," the thing that sets him apart from all of the other construction workers, is that he has also, over time, acquired sufficient experience to devise the overall build strategy.

Quite simply, you want a private investigator who is like that general contractor: knows how to do the work, but more importantly, knows how to first plan the case, given what your actual objectives are.

Look again at the screenshot above. Now, I'm not picking on this guy--he may do perfectly adequate work--but his number of "years in business" stat should alert you to the possibility that this is not a PI with sufficient experience to devise your case strategy.

Disadvantage # 7

Many private investigators are more inexperienced than you realize, or would prefer, given the gravity of your case.

It may not be obvious to you yet, so I will just state this explicitly: hiring an experienced private investigator is the most effective way to (a) eliminate unnecessary investigation costs and (b) maximize your chances of actually achieving the case outcome you're looking for.

The specific part of the overall case strategy you want the PI to help devise is the investigation strategy, which should be designed to answer questions like:

1. What evidence would be required to prove each of the claims, or working theories, guiding the case strategies?
2. Where might that evidence be located?
3. How might that evidence be obtained?
4. What is the optimal sequence to search for each piece of evidence?
5. What are the potential loopholes your opponent to exploit to undermine the credibility of a given piece of evidence, and what additional evidence could we obtain to preempt those arguments? In other words, how do we make a given piece of evidence as damning as possible?

Thus, you want a private investigator who sees his/her role in your case as part strategist and part hired hand, rather than only hired hand, because he/she can use the list of questions above to maximize your chances to achieve the case outcome you're hoping for.

But, back to common thread we've been teasing out in the last few sections, it is important to know that a PI-strategist can also help you eliminate unnecessary costs. Here's is one example from all of the lawsuits Microsoft faced in 2011. On average, there were 49 million pages of evidence that Microsoft and its opponents had to sift through to find evidence relevant to the given case. By the time this sifting process ended, on average, there were only 142 pages used at trial.

Can you imagine the magnitude of unnecessary investigation costs that might have been wasted in each of those cases if an inexperienced investigator was not able to narrow down the investigators' focus with a well-though-out investigation strategy? In the Microsoft example above, if the investigation had focused on any of the top 4 levels of the triangle, then 99% of the investigation costs would have been virtually wasted. That's why having an investigation strategy that tells you where to look and what to look for is so important to be efficient with PI costs.

Disadvantage # 8

Most of the fees you pay to PI could be wasted if you don't have a good investigation strategy to narrow the scope of the search.

We've talked about a PI's pricing structure and the need for a good investigation strategy. Now let's tie those two points together to make a third point.

One problem with the billable hour model is that is does not account for the experienced practitioner's greater ability to predict a case's workload. Instead, it basically implies that the PI (or attorney, as another example) have zero clue what the workload might be, because that is what an hourly rate represents, in effect:

As the customer, when you agree to this kind of fee arrangement, it is like handing someone a blank check which you've already signed. The only thing you know upfront are the increments and pace at which the cost will increase. You usually know little to nothing about what the total cost might end up being. At best, this makes the total, eventual cost you will incur unpredictable. At worst, it makes it easy for service providers to take advantage of that blank check in your name.

If you have a private investigator on one side of the table and someone on the other side who has never hired a PI before, and the two parties begin discussing the price the PI would have to charge to do the job the client is requesting, which of the two parties do you suppose is better able to predict how much work a job will require? Obviously, the experienced PI would be able to make a far more educated guess than the inexperienced client. The same is true of an attorney vis-a-vis a client. The experienced practitioner of the trade is better able to predict how much work a job will require.

Thus--referencing again nuisance loud music example above, which illustrated the conditions in which one party has a greater responsibility to do or not do an action--experienced private investigators, have, I would argue, an ethical responsibility to advise you how much work a given investigation might require, such that you have at least some shred of data on which to budget--this, in addition, of course, to all of the other table-stakes responsibilities such as don't be dishonest and don't abuse the billable hour model just because you can: bill honestly, fairly, and only when in the client's best interest.

The problem is: even if all PIs complied with each of these ethical responsibilities, you would not have a way to know it for sure until after you've hire him/her. And given the more likely fact that not all PI are honest, the fact that it's hard to discern the crooks from the saints upfront makes it more necessary to look for pricing models that share risk and are not as easily abused.

Disadvantage # 9

If you don't know upfront whether you can trust a given private investigator, then you're vulnerable to whatever abuses the PI's pricing structure allows.

We've already covered a lot of material. So we can go ahead and summarize it into a brief checklist you can refer back to when you're ready to start shopping for a PI:

1. Experience - Look for someone who is experienced.
    
2. Fixed prices - Look for someone who offers fixed, upfront prices, rather than only hourly rates.
    
3. Shared risk - Look for indications that at least some of the economic risk is shared (Example: if the job takes 20 hours, instead of the estimated 10 hours, the price you pay the PI will not change. This aligns the PI's interests in getting the job done efficiently with your interests in keeping costs low.)
    
4. Investigation strategy - Look for someone who can help you devise an overall investigation strategy--not just someone who can spy on people and go through their trash, because...even raccoons can do both of those things.
    
5. Precise billing descriptions - Look for someone who gives you precise descriptions of the services to be rendered at each phase of the investigation (this is a good tip when hiring an attorney as well, incidentally). I'll wrap up this article by explaining this last point.

So here is one final thing you can look for to infer either that a PI is honest or that, at least, his pricing structure makes it harder for him to be dishonest: precision when describing the services to be rendered. This is generally the easiest way for a private investigator to be transparent with you about which services you are getting in return for the fees you pay them

This usually takes the form of the PI itemizing for you upfront the quantity and type of service they intend to render for your fee. For example:

This is a commendable level of detail about what you would be getting for your money, and it's not uncommon for private investigators to go into even further detail, because they essentially "geek out" over the spy-like tools of the trade: "To conduct the surveillance, I'm going to use [ABC device] which does [XYZ function], etc."

Disadvantage # 10

Imprecise descriptions of the services to be rendered give private investigators further leeway to double-bill you and otherwise abuse the pricing model.

Oftentimes, the deal you strike with the private investigator is essentially separated from any sort of strategic, problem-solution framework (not always, of course, but certainly too often, as we've already discussed above). What would be better is a private investigator who...

• Understands the parameters of your case: legal, factual, interpersonal, etc.
• Understands your ultimate objective, the reason why you are reaching out to a private investigator at all.
• Doesn't just take your order--"Oh, you want me to watch someone for 8 hours? Cool, I'll do it."--but actually has sufficient experience and expertise to be able to suggest alternative ways to investigate the case that might be more efficient or effective to achieving your ultimate purpose.

How, and whether or not, the private investigator knows how to conduct extensive online investigations early on in a case, for example, is a frequent determinant of the probability that the PI might walk right past an easy opportunity to help you make better resource decisions and improve your chances of winning your case.

As an example of what I mean, consider the page from a notebook/planner, shown in the image above. Many private investigators began their PI career when they retired from law enforcement or military careers. While their previous careers might have trained them to do many of the tasks required of private eyes, it is not always the case that those previous careers trained them on new technologies or investigation techniques. For many of "retiree" private investigators, in other words, notebooks like this didn't exist when they were in school.

To the extent that online investigations could be impactful in your case, this is a scenario in which being exclusively "old school" might be a telltale sign that a given private investigator is not fully equipped to present you with every option, and in particular, the most cost-efficient options, available to you.

Disadvantage # 11

Many private investigators either do not know how to use newer, more cost-efficient investigation techniques.

But if the PI is precise is describing the services to be rendered, then, as a heuristic, you can easily recognize upfront, before you actually sign the hire agreement, whether the PI intends to start with online research. If he/she does not intend to start online, then, nowadays, this is usually a good indication of a private investigator who has not kept up with new investigation techniques that allow the PI to keep your investigation costs low. So, if you're talking to a PI who cannot explain to you how he/she tends to use the internet for preliminary research, then you should probably move along to the next PI.

If you need help applying any of this info to your specific case, we're happy to help.

Fairet offers 10-minute micro-consultations to help you orient your case around an investigation plan, which could then equip to hire the right PI. Also, in keeping with the points outlined in this article, we charge a fixed price of $32 for the micro-consultation ;)

You can book that micro-consultation call below.