By Pamela J. Bethel
What role should in-house lawyers play in assuring that corporate compliance standards are met? Should companies have a separate compliance department, or should it be part of the legal department and report to the general counsel?
Mitratech, an Austin, Tex.-based consulting firm that works with corporate legal departments, just issued a white paper based on a market-wide survey of legal departments that it conducted in July and August of 2014. The white paper is titled, “At the Intersection of Legal and Compliance: The Opportunity for General Counsel to Meet Increasingly Complex Compliance Requirements and Lower Business Risk.”
The report noted, among other things, that in 40 percent of the companies, the legal department owns the entire compliance function and that in another 24 percent, it owns part of the compliance function.
“In this increasingly complex compliance environment, the role of the corporate legal department and the General Counsel is constantly evolving,” the report stated. “No longer are GCs simply concerned with handling legal matters that come in the door. As compliance demands expand in both quantity and financial impact, compliance and regulatory issues are at the forefront as a top priority for GCs, although the role that the GC can play in the arena is still not being fully capitalized upon.”
We agree. General Counsel can no longer see themselves as just handling whatever comes through the door. They, along with outside counsel, must anticipate compliance and regulatory problems before they occur.
Although Mitratech did not make specific recommendations on where to house the compliance function, the report concluded:
“Mitratech’s recent survey confirms what many in the compliance field — from pundits and compliance professionals to regulators themselves – have said: When it comes to enterprise compliance, truly there is no one-size-fits-all solution. But this survey also clearly reinforces the critical role that General Counsel can and must play in their firm’s compliance program and as leaders within the broader organization.”