It’s better to pay a £900m fine than suffer a worse fate

Debevoise and Plimpton, an international law firm with offices in the City, believes the way it handled the case will become something of a model for other European companies accused of white-collar crime.

The law firm, which launched a new corporate defence practice last week, has recently recruited former senior prosecutors - including the former British Attorney General Lord Goldsmith and the former US Attorney General Michael Mukasey.

Debevoise was called in by Siemens a month after dawn raids on the company's offices in Germany and the homes of senior executives in November 2006. US investigators launched their own inquiries after reading press reports and the two countries co-operated closely.

"Our mandate was to do a global investigation and to report to the audit committee of the company's supervisory board," says Bruce Yannett, who led the Debevoise team. "Faced with what could have been a life-threatening crisis, the company decided that it was best served by co-operating."

The idea of a company commissioning independent lawyers to investigate its own wrongdoing and pass on relevant information for the authorities to verify is more common in the US than it is in Europe.

Initially, German investigators feared that Debevoise might try to undermine the police investigation. "By the time the matter was resolved in Munich," adds Yannett, "the prosecutors were expressing their gratitude."

That comes as no surprise. International law firms have much greater resources than public prosecutors. And of course the client pays all the costs - being billed, in this case, for an extraordinary 1.5 million hours by 100 lawyers from Debevoise and 130 forensic accountants from Deloitte.

After Siemens had offered an internal amnesty and leniency measures to encourage whistleblowers, Debevoise volunteered information about worldwide bribes to prosecutors in Germany, the US and eight other countries.

Without this information and translations, where necessary, of 24,000 documents - available only because Siemens took "aggressive steps starting immediately after the Munich raids to preserve evidence in both electronic and hard copy form" - US prosecutors admitted they would have found it "exceedingly difficult" to track complex international transactions in the time available. They included contracts to supply ID cards in Argentina, a mobile telephone network in Bangladesh and mass transit systems in Venezuela.

But catharsis is good for more than the soul. First, Siemens avoided the risk of raids on its US premises and the arrest of its executives.

Secondly, it could negotiate a plea. If Siemens had been convicted of bribery, it would have lost public-sector contracts in many parts of the world. It avoided this by pleading guilty to accounting irregularities in the US, while three foreign subsidiaries admitted conspiracy to violate the US Foreign Corrupt Practices Act.

Then there were the fines. US sentencing guidelines based on the corrupt payments suggested a penalty of between $1.35 billion and $2.70 billion. The actual US fine -"merely" $450 million - was agreed because of the company's "exceptional" co-operation with investigators.

Finally, a hostile investigation would have taken two or three times as long. That would have cost the company more in legal fees as well as depressing the company's share price and staff morale for longer.

And there was an unexpected bonus. Siemens now knows that the additional costs of paying bribes for some past contracts meant that - far from attracting profitable work - it was operating these projects at a loss.