2 The Path to the Professional PI – The Complete Idiot's Guide to Private Investigating, Third Edition

Chapter

2

The Path to the Professional PI

In This Chapter

Honing your sleuthing skills

Obtaining your PI license

Considering your liability and insurance needs

Peeping at privacy laws

Marketing your business on the internet

A career as a professional private investigator can be emotionally rewarding and fabulously entertaining. I like to joke that it’s much better than working for a living. But getting hired as a PI isn’t a simple matter of filling out an application at Monster.com and hoping for the best. As with many other professions, state agencies often regulate private investigators, and in most states, you need the right combination of experience and training to get your sleuthing license.

If you’ve decided you want to be a professional PI, this chapter helps you get started so that you can begin collecting those checks. And collecting checks from clients is probably the only way most of us will ever get to have a Ferrari.

Getting the Experience You Need: Coffee and Donuts Optional

The approach you take to starting a PI business depends on your previous level of investigative experience. If you’re leaving a position as an investigator with law enforcement, your years of running criminal investigations should give you a bit of a leg up in this business, at least at the beginning. Police experience is particularly helpful when you begin marketing your services.

If you’ve never cared much for coffee and donuts, though, don’t worry: other occupations besides cop work can lead you down the path to PI-dom. Here are some of the most common routes:

Insurance claims adjuster: Doing investigative work for insurance companies provides good background that can serve you well in the insurance end of the PI business.

Military intelligence: Time spent in uniform can lead you directly into private investigative work.

On-the-job training: You can get good training by working for another licensed private investigative agency.

In 41 U.S. states, you need documented experience such as the type I mentioned in the preceding list to get a PI license. For example, to qualify for a regular investigator’s license in Florida, an applicant must have at least two years’ investigative experience, or else a Bachelor’s degree in criminal justice and one year of experience. Nine states don’t require anything more than a business license; in those states, anyone can apply for a business license and hang out a sign as a PI. (I tell you which states require licenses and which don’t later in this chapter.)

As someone who has run a PI agency for more than 20 years, I know that it’s nearly impossible to find a job in this field without experience. Agencies have relatively few openings, and you can count on stiff competition for the slots that do become available. Thanks to the many books, movies, and TV shows about PIs, many people think of it as a glamorous occupation and want to try their hand at it. I don’t blame ’em.

HIDDEN HINT
If you live in a state that allows interns to work toward their PI license, you can jump right over the hurdle of finding a job with an established PI agency by starting your own agency, even with no experience! Here’s what you do: hire a fully licensed investigator to manage your agency, and have the manager serve as your mentor or sponsor. If you’re in a state that has a state licensing board, check with them to see if this runaround works in your state.

On average, my firm receives three inquiries a week from folks seeking to intern. How do you compete with the crowd for the few openings out there?

Step back for a minute and think about the difference between skill sets and their application to specific jobs. If you already have good skills in one job, you can often quickly be taught how to apply those same skills to another job. On the other hand, if you lack any applicable skills for a job, you face a double whammy: you need double the training because you need to learn both the necessary skills and the right way to use them.

When looking for a job with a PI firm, emphasize the skills that qualify you to do the work. Over the years, I’ve learned that it’s easier for me to teach a person how to be an investigator (applying the person’s existing skills) than it is, for example, to teach him the photography skills and research skills that good PI work requires. Come to me already skilled, and I’ll teach you how to apply those skills to this line of work. Here’s your second investigative assignment: as you read this book, keep a running list of the skills an investigator needs. That ought to strip away some of the TV-induced glamour. Are you already good at each one? Can you take classes to learn or enhance the necessary skills? As an employer, my attitude toward a potential employee is favorably affected when a candidate shows initiative by taking steps to improve her qualifications. For example, if she can talk intelligently about photography, she significantly increases her chances that I’ll hire her.

If you really want to impress me, walk in with a top-of-the-line digital 35mm single-lens reflex (SLR) like a Canon 5D Mark III (it shoots both 35mm full-frame and video). Show me how cool it is and demonstrate that you know how to use it. I’d probably hire you on the spot.

Make yourself attractive to the firm where you’re seeking employment, and be persistent.

Consider this list of skills and experience you should acquire before applying with a PI firm:

Experience in digital photography, both single-lens reflex (SLR) and video

Knowledge of computer programs, especially Microsoft Word, Excel, and Apple operating systems because many agencies are leaving Microsoft and turning to Apple

Excellent keyboarding skills

Good knowledge of Internet search engines

Knowledge of your local and county courthouses and the ins and outs of the clerk’s office (see Chapters 5 and 6 for details)

If a person came to my office possessing all of these skills, I would hire him on the spot and create a position for him even if I didn’t need another investigator.

HIDDEN HINT
Having your own surveillance equipment can boost your chances of getting hired. Most PI firms don’t supply the high-tech camera equipment anymore; each investigator has to have his own. When you get the job, buy the equipment that your firm recommends. Be familiar with both digital video and single-lens reflex digital cameras. Learn the difference between physical zoom and digital zoom on video cameras.

Obtaining Your Licenses

Nine states don’t specifically license private investigators:

Alabama

Alaska

Colorado (a voluntary licensing statute allows you to obtain a license if you want one)

Idaho

Mississippi

Pennsylvania (some counties issue licenses)

Rhode Island (some cities and towns issue licenses)

South Dakota

Wyoming

Even in these states, you need a business license. In some of these states, individual cities might require a private investigator’s license in addition to a business license. Many states require proof of training.

THE SCOOP
PI Magazine has a number of useful resources, including links to all the PI licensing divisions in the various states. Find out the requirements for your state by checking with the appropriate licensing authority (www.pimagazine.com/private_investigator_license_requirements.html) before you apply for a job with an agency.

Twenty-three states require PI applicants to pass an examination before granting a license. To pass the Georgia test, for example, you need to be familiar with the Georgia wiretap and eavesdropping laws, as well as the laws that apply to carrying concealed and unconcealed weapons. In addition, the test covers legal procedure, interview techniques, and basic investigative procedures.

Some states, including Florida, require you to possess at least two separate licenses: an agency license and a private investigator’s license. Of course, you must pay a separate fee for each license. If you run a larger operation or have multiple sites, you may also be required to have what’s called a manager-of-an-agency license.

If you want to carry a weapon while on or off the job in Florida, you need two more permits: a weapon license to carry while on duty and a concealed weapon permit to carry a firearm off duty. That adds up to as many as six different licenses and permits in the state of Florida if you want to be a PI.

Getting Reciprocity: Working Across State Lines

As your business expands, you may want to acquire licenses in states other than where your principal office is located. If you’re working a case in your state and it leads you to a neighboring state, some states allow you to continue working within their borders as long as the case originated where you’re licensed. Others won’t. Always check the licensing regulations and reciprocity agreements between states before working a case in a state where you don’t hold a license. Contact the state regulatory body before investigating where you’re not licensed. (To find contact information for your state regulatory body, go to www.pimagazine.com/private_investigator_license_requirements.html.)

DEFINITION
A reciprocity agreement is an agreement between two states to honor licenses issued by either state, allowing license holders in one state to work in the other state, and vice versa. Usually reciprocity agreements between states are limited in time and scope.

Reciprocity is important. If a client wants you to travel from Georgia to Oklahoma, you need to know whether the two states have a reciprocity agreement. If not, you need to team up with a licensed investigator in the other state.

Florida has reciprocity agreements with the following states: California, Georgia, Louisiana, North Carolina, Oklahoma, Tennessee, and Virginia.

Check your state’s reciprocity agreements and make sure you’re legal before you pack your hiking gear to follow some guy and his girlfriend down the Grand Canyon in Arizona.

Protecting Yourself with Insurance or Bonds

Many states require a PI to carry a liability policy. Other states require PIs to be bonded. The requirements vary from state to state. Florida doesn’t require PIs to carry liability insurance. California, however, requires $1 million in liability insurance if you’re going to carry a firearm. Firearm-carry regulations for private investigators are often different and more harsh than for a simple concealed weapons permit. South Carolina requires a $10,000 bond, and Georgia requires a $25,000 bond or a liability insurance policy with a $1 million minimum. Check your own state before deciding how much liability insurance you need. Those states that require either a bond or insurance will want proof of coverage before issuing or renewing a license.

LEGAL TRAP
If you have serious doubts about the legality of any action you’re about to undertake, get a legal opinion first—or don’t do it.

The policies typically cover comprehensive general liability coverage for death, bodily injury, property damage, and personal injury coverage, including false arrest, detention or imprisonment, malicious prosecution, libel, slander, defamation of character, and violation of the right of privacy. I think the kitchen sink is in there, too, but at least they had the courtesy to leave out the toilet.

Even if your state doesn’t require you to have liability insurance, consider getting it anyway. It’s not unusual for corporate clients to require $2 million in insurance coverage and to be named as an additional insured on the policy. If you want to go after the big fish, you’ve got to use big hooks.

In nearly 30 years in the PI business, my agency has never been sued for any action that came out of our investigative effort (we have been sued for a couple automobile accidents). Despite that, in today’s litigious society, only a fool would work as a PI and not carry insurance.

Pulling Back the Curtains on Privacy Laws

Surveillance is such a large part of many private investigators’ practices that, to avoid being sued, you need to understand when people have a reasonable expectation of privacy and when they don’t. The expectation of privacy comes from the U.S. Constitution, the Fourth Amendment protecting Americans from unreasonable search and seizure. (Many other Western countries have similar laws.) We have a reasonable expectation of privacy if a reasonable person would believe that other people will not hear or see what she says or does. How do you establish what is reasonable? Several factors of importance to the PI play out here, including the sophistication of equipment used to “invade” the private space and the vantage point from which the investigator is viewing or hearing. A general rule is, if the activity being observed can be seen from a public area, or an area open to the public, the subject does not have a reasonable expectation of privacy.

A couple kissing or making love in front of an open window that can be seen from a parking lot is fair game. How about a window with the blinds down? Many times I’ve sat in one of our surveillance vans and shot video of cheating couples through second-floor blinds because the miniblinds were shut in such a way that, from the ground-level parking area, I could see into the apartment. If you have miniblinds, play with the slat angles, and you’ll see exactly what I mean.

Did that couple have a reasonable expectation of privacy? Some would say “yes,” because they made an attempt to close the blinds. The fact is, I could observe and photograph the activity with ordinary, off-the-shelf photographic equipment. In my opinion, they may have thought they had privacy, but they didn’t close the blinds properly. Their lack of proficiency in closing the blinds negated any claim they might make for an expectation of privacy.

The expectation of privacy can be applied to neighborhoods, surveillance, and crime scene investigations; in addition, a number of recent court rulings have addressed expectation of privacy in the workplace. As a PI, if you’re conducting an internal theft investigation for an employer, you need to know what you can and can’t get away with.

In Chapter 1, I told you about a Shipyard case in which I used a two-story apartment complex with a view over a subject’s 8-foot privacy fence to video him working in his backyard. My subject never considered that a resourceful investigator could gain legal access to the apartment that had the view. But just because he didn’t consider it didn’t mean that he had a “reasonable expectation of privacy.” If the apartment had been two blocks away and I’d had to use super-long lenses and digital zooms, maybe I would have crossed into his area of reasonable expectation to privacy. But then again, maybe not.

Always be alert to this privacy problem. It extends well into the information-gathering area, including not only physical, but also electronic and financial data. As I hope this example illustrates, privacy laws can be tricky. You need to know what the laws are in your state to avoid getting in trouble.

Finding Your Clients

Many agencies bill themselves as “full-service agencies.” That’s fine. Take whatever business you can get. A word of caution, though: it’s difficult to be all things to all people. Successful agencies find a niche and then exploit the devil out of it.

When the Brown Group Inc. was marketing insurance surveillance work heavily, it was billing between $80,000 and $90,000 a month. This was in the early 1990s from a single location in northern Florida.

Sure, it did domestic work and some electronic countermeasure work, but its major market was insurance defense cases. The agency marketed that niche by staffing booths at workmen’s compensation and insurance liability conventions, where it gave away promotional material and freebies to insurance adjusters and attorneys working insurance defense cases.

C. J. Bronstrup, a long-time private investigator and expert marketer in the PI industry has this to say about marketing:

Beware: lack of “technical” knowledge is not the leading cause of failure. Many fine investigators with 20-plus years of law enforcement backgrounds go belly-up every year. The major cause of failure is not having enough business. Take the time to learn how to market your business. It can propel your agency from making peanuts to a steady six-figure income almost overnight.

Jimmie Mesis, editor-in-chief of PI Magazine, is known as the “marketing guru” for private investigators. He shares some of his key marketing points.

“Marketing yourself and your services is essential to survive as a PI. Those investigators who fail to market or advertise are doomed for failure,” says Mesis. “It’s unfortunate, because failure can easily be avoided with proper marketing and following a few simple steps.”

Mesis alleges that success as a private investigator boils down to steady and aggressive marketing so that people will always remember you. “It’s not who you know, but who knows you, and who remembers you when they need a PI.”

Mesis goes on to say that investigators need to determine what investigative specialty niche they want to market, ideally a niche that they are good at and one for which there is a need. Finally, they need to identify the target markets that require that specialty. Or, as I like to put it: find your niche, and then market the heck out of that niche.

The typical PI customer base comes out one of the following sections of our economy:

Attorneys

Insurance companies

Business (corporate)

Consumers

Other PIs

Each of these target markets must be approached in a manner unique to their specific investigative needs. Insurance companies will be more interested in your surveillance and video skills. An attorney will be more interested in your interviewing techniques, what kind of a witness you will make, and if you can put together a coherent written report that won’t embarrass him in court.

In my own firm, we got tired of doing insurance defense work and moved away from that to skip tracing. For five years, we skip traced more than 2,000 people a month. Recently, I was able to sell the skip-tracing portion of my business.

The most important question you need to ask yourself is this: can this business be financially rewarding? The answer is yes, under certain circumstances. Here are three ways to make your PI business financially successful:

Run the business yourself. Build it up until you have 6 to 12 investigators working for you. You will not make a six-figure income working cases by yourself. Do the math. If you work 40 hours a week, you’ll be lucky to bill 24 of them. Twenty-four hours billed at, say, $85 per hour results in weekly billings of $2,040. Fifty weeks of those billings gives you a gross income of $102,000 a year. Subtract all of your expenses, and you’ll be lucky to net 50 percent, or $50,000. It is very hard to succeed as a one-man operation.

  With six men whom you pay $30 dollars an hour, billing the same 24 hours a week, all of sudden you’re bringing in about $396,000 a year after meeting your investigative payroll. Sure, overhead will increase, but you should still end up with a net well into the six-figure area.

Use the “make-it-up-in-volume” strategy. Find a high-volume niche that needs little manpower, such as skip tracing or background investigations. Each case might only gross $50 to $100 dollars, but if the volume is high and the costs are low, you can make a nice profit. If the net profit on your high-volume, low-cost product is, say, $35, and you are processing 500 of them a week, the gross profit will be over $900,000 a year. Not too shabby, huh?

You can make a six-figure income working high-dollar cases as long as the overhead is low. Consider due diligent adoption searches. The cost of working that type of case is practically nothing. Maybe $50 max per case, but you’ll charge your client $750. A net profit of $700. If you do three a week, you’re netting over $100,000 a year.

There may be other ways to make high dollars in the PI business, but these are three proven ones for me.

The Internet and Your Business

Much is made of marketing on the internet. Hundreds of books have been written on internet marketing. A whole new industry has sprung up dealing only with search engine optimization (SEO). A detailed discussion of internet marketing is beyond scope of this book, but here’s some good advice from Mesis:

A great website is not only essential for generating inquiries and assignments, but also for establishing yourself as an investigative professional. Your website must be search-engine optimized or no one will ever find you or your site. You also need to have a specific page for each investigative specialty that you’re promoting. Do not create a dinner menu by listing all of your investigative services on just one page. When you promote one service on one web page, search engines reward you with a higher ranking, which means more traffic. More traffic translates into more phone calls and more assignments.

One of the main reasons PIs fail is they try to go the cheap route. They don’t spend any time or money on marketing or advertising, yet they expect their phones to ring with cases.

HIDDEN HINT
The biggest mistake PIs make is building their own websites. Website design and optimization may look easy, but doing it well is difficult. You should leave it to professionals.

A full 30 percent of our new cases come from clients who found us on the internet. Usually they search “Private Investigator” and then the city where they want the work performed.

Those who ignore this advice may wake up one day to find their biggest client just got lured to another PI firm by some kid sitting at the kitchen table in his Harley boxers using a laptop computer.

I’ve had potential clients tell me that they are using a large national firm with an internet presence. How do they know this firm is large? All they see is the website, the toll-free number, and the claims on the website. It’s not a large national firm. It’s that damn kid in the underwear. Excuse me while I hit the stores in search of my own Harley boxers.

My agency had one of the original PI websites early in 1992. At that time, there were about seven private investigators on the web, and we were the only ones taking case assignments directly over the internet. Our bank, with whom we’d done business for years, would not give us a MasterCard and Visa merchant account because the internet was so new and they were afraid of it. We had to go elsewhere to set up our merchant account. Of course that sounds silly now, but that’s how early our presence was on the net.

Even at that early stage, we were bringing in cases from all over the United States, and our bottom line began to increase because of our website. There’s been a lot of shaking out in the industry since then, but a good, well-designed website can increase your business, even if you are working out of your kitchen. Don’t be cheap.

The Least You Need to Know

Becoming a licensed private investigator is a popular dream. Making it a reality involves acquiring certain skills.

Forty-one states require PIs to be licensed. Twenty-two states also require a minimum passing score on a licensing examination. The test covers state laws on weapons, privacy issues, and general legal knowledge.

States typically require liability insurance and bond coverage before issuing a PI license. Also, many clients require proof of insurance, often up to $2 million, before assigning cases to a PI.

Surveillance is a big part of many PI jobs; to avoid getting into legal trouble, you need to be fully informed about privacy laws.

Use a professionally designed web page to increase business. Expect 30 to 40 percent of your business to come through your website.