When Lawyers Get in the Way of Compliance

lawyer2I hate to pick on lawyers. I have been practicing law for nearly 35 years. I have worked with and met a lot of lawyers, some great, some good and some not so good.

Lawyers can sometimes be their own worst enemies. When lawyers engage in ‘territorial” battles, or controversies over petty issues, they always lose, no matter what the result.

A confident professional will recognize that some issues are important and others are not. In addition, a confident professional will communicate competence and understanding, and will have a unique understanding of the big picture and avoid petty in-fighting. In other words, a good lawyer understands when and where to draw the lines without letting their egos get into the matter.

These observations about the profession apply with force to in-house lawyers and their adjustment to the rise of the compliance profession. There is plenty of risk to go around in a company, and there is more than enough work to keep compliance officers and lawyers busy.lawyer3

The rise of the compliance profession has not been at the expense of lawyers. In fact, I like to use analogy that worked with my kids. Everything in life is not a trade-off; sometimes the pie of opportunity and benefits can grow. Compliance adds value to the legal function. Both are enhanced by the rise of the compliance profession. One does not rise at the expense of the other. Lawyers who fail to see this basic point often engage in petty, territorial behavior that waste energy and resources in the corporate governance world.

All too often I encounter in-house counsel who are unable to see the big picture, embrace compliance, and recognize that everyone is better off when compliance succeeds. There is nothing more debilitating to legal and compliance operations when the two functions engage in conflict rather than collaboration.

Lawyers are not the only ones at fault. Compliance officers are under extreme pressure to succeed, to demonstrate their value, and to bring about rapid “change.” A non-creative compliance officer may identify legal functions as tasks they should be supervising and conducting. Such an approach can be a real mistake.

Lawyers and compliance officers have very different mandates. It is important that lawyers and compliance officers understand and apply the significant difference in responsibilities. I am not going to belabor the point by repeating the different approaches.

While they have different mandates, the legal function, for obvious reasons, plays a critical role in supporting and promoting the compliance function. Compliance officers also need to understand how they promote the legal function as an important complement to their compliance obligations.

lawyer4Many companies operate effective compliance and legal functions because of the professional and positive working relationship between the legal and compliance officers. It is a natural partnership and one that can work very effectively. I have experienced and worked with many well-oil compliance and legal operations in a number of companies.

Like the internal audit function, legal and compliance need to work together. I often call them the three amigos or amigas – they are interdependent and can implement important policies and procedures that reinforce their overall roles to the compliance function. When these three functions work together the company maximizes its ability to achieve an effective compliance program. When the three functions fail to work together, this can be a crushing blow to a compliance officer and the ultimate success of a chief compliance officer.

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1 Response

  1. Donna Boehme says:

    excellent Mike #TheRisingCCOLiftsAllBoats It’s important to recognize that each of those functions has a unique and valuable mandate in the company, That’s why “Collaboration, not Subordination” is a good way to explain Compliance 2.0- where each department can find ways to boost the performance of the others through good collaboration. Trying to operate one SME through the mandate of another SME results in mistakes , gaps and frIt’sfrustration. sit’s hard work to figure out the collaboration, but when agreed, all the mandates are served well!