There was a letter in this week’s edition of Barron’s that said, “Lawyers look backward to precedent. Innovators assiduously look forward and avoid precedent. The two mindsets are antithetical.”

The letter is about why lawyers at the SEC can’t keep up with the advanced math and technology that hatches new ways to beat out ordinary retail investors, as with high-frequency trading.


It also got me thinking about the two mindsets people look for in an investigator. If precedent told us what we needed to know about what someone might do next, we could simply research the past and change the dates: he always settles four months after he files suit, he always parks his money in side companies named after the street he lives on, and so forth.

In fact, investigators have to look both backward and forward: backward to find people with whom to discuss a subject’s past actions as well as mindset, and forward to try to imagine what a subject may be doing given past patterns and current facts. Some of those current facts are known, some need to be guessed at within constraints of limited time and budgets.

My colleague at Cardozo Law School Peter Tillers has written extensively about the mindset of a fact investigator and is organizing a workshop this week on evidence and inference.

His view is that what contributes to making fact investigation especially daunting to some is justifiable fear of failure. That fear may be related to lack of innovation, he says. “Explorers don’t know for sure what’s going to happen. It takes genuine courage to investigate.”