Legal Compliance Association: An online community for legal compliance professionals

Risk and compliance officers are coming together at the Legal Compliance Association to learn from each other and corporates, says Leah Darbyshire

A decade ago, when Managing Partner first held its Risk Management for Law Firms conference in London, a key concern for delegates was the risk of crippling negligence claims caused by dishonest partners. Responsibility for risk and compliance was allocated to a single partner who, in addition to full-time fee-earning, was tasked with spotting the danger signs.

Since then, and especially following
the recession, negligence claims have indeed got bigger but that alone is not
what has been driving growth in the legal risk and compliance field. Increasing regulation, with the Solicitors Regulation Authority (SRA) single minded in its objective to promote the public interest and enhance the overall view of the profession, has resulted in a whole industry of toolkits, software, systems and support. Professional risk and compliance directors have been appointed, with large teams to support them. Client intake has been centralised. Compliance has become professional.

In the UK, the removal of strict rules and their replacement with outcomes-focused regulation has not freed up those larger firms that were already demonstrating best practice to enable them to make their own decisions, as the Solicitors Regulation Authority (SRA) might have hoped. Instead, this growing community of legal compliance professionals have an even greater need to come together to understand what a material breach looks like. Managing Partner's own COLP & COFA conferences have attracted nearly 300 delegates since 2012. At these conferences a strong theme emerged, one of confusion, followed by
a resounding call for the regulator to respond to unanswered questions and issue further guidance.

Corporate perspectives

While benchmarking is implicit in outcomes-focused regulation, under which greater responsibility is placed
on law firms to determine what constitutes a material breach in relation
to their size, practice areas and client base, Managing Partner's research
shows that international law firms are looking to learn from the experience of multinational corporations in ensuring regulatory compliance.

City firms recognise that, as large businesses with thousands of employees placed in disparate locations around the globe, they have a lot in common with MNCs. Not only do international law firms share common characteristics with large corporates, their clients, but these sectors have already experienced the introduction of regulation and formulated their response to it, in terms of policies, processes and systems.

Indeed, the task list of a risk director at a City law firm is not dissimilar to that of a risk director at an MNC. Both would fly out to high risk-jurisdictions to scope out the opening of branch offices. Both would visit existing overseas offices, spend time with local staff and try to get a sense of what is really going on there. Both would present on the importance of risk management to the board. Both would monitor changes to regulation and legislation, and run a team of knowledgeable experts to ensure compliance. And both would go even further than this to ensure that they are also tackling the key risks that
are keeping their senior management team up at night.

Law firm risk and compliance directors are, typically, also technically brilliant lawyers. But, following the introduction of the COLP role, it has become abundantly clear that the skills required for the job go far beyond pure legal advice and extend into classic interpersonal and influencing skills, even leadership.

So, where lessons have already been learned in the corporate sector, such as how to facilitate a compliance culture - critical for making any of the processes stick - it is no wonder that sensible legal services professionals are looking to the corporate world for guidance.

Louise Fleming, a consultant at Kingsmead Square and formerly responsible for risk management and audits at Barclays, believes that, in future, all large law firms will have independent internal audit functions, similar to corporate businesses.

"By 2020, internal audit will be established as the 'third line of defence' in all well-managed law firms," she says. "This is not about file reviews - it is about implementing a risk-based internal audit strategy to provide independent assurance to stakeholders that risks are being properly managed."

Fleming, like Julia Graham, chief risk officer at DLA Piper, advocates an enterprise risk management (ERM) approach to legal risk and compliance. ERM, of course, began life in the corporate sector, but the framework holds that the regulator constitutes one of the lines of defence for any organisation and therefore that regulatory compliance is one strand of a more holistic approach to managing risk across the whole enterprise.

Keith Read, formerly group director of compliance and
ethics at BT and currently a board member of the Legal Compliance Association, also sees similarities across the legal and corporate sectors. In an article written for the LCA about turning compliance communications from "push" into employee "pull", he argues that "most organisations, regardless of sector, face uncannily similar compliance and ethics challenges".

Your association

The objective of the LCA is to deliver year-round networking, learning and support in legal risk and compliance, with online member-to-member networking and topic-based discussion forums, as well as thought leadership from the corporate sector.

We have partnered with the financial-sector focused International Compliance Association (ICA) to bring you ICA articles direct to your desktop or iPad. Membership includes a 10 per cent discount on any ICA qualification, including the Diploma in Compliance.

Other benefits include targeted articles from Managing Partner, Compliance Week and Solicitors Journal, as well as from our board members, who are senior specialists in risk and compliance in the corporate and legal sectors, including leading international firms. All principal members of the LCA can also claim a 25 per cent discount on Managing Partner events
and reports, as well as a 10 per cent discount on Wilmington magazines.

A stronger community

To recreate the community established at Managing Partner's long-running conferences, our secure online discussions include a forum where you can pose hypothetical 'material breach' scenarios and ask other members how they would respond to benchmark your judgement.

Our information repository is fully searchable too - a search on anti-money laundering, for instance, might bring up articles, blog posts, discussion topics, member biographies and PowerPoint presentations from recent conferences.

Pearl Moses, an LCA board member and practice lead consultant in risk and compliance at Law Society Consulting says: "Over the past four years, I have seen Managing Partner distinguish itself in the support that it has given compliance-facing members of the profession. With this in mind, I am greatly encouraged by the opportunity to be a part of the LCA's launch. I am confident that the association will continue in the group's excellent tradition of tailored updates and scenario-based learning and that it will provide an invaluable resource for busy practitioners."

Perhaps best of all, the LCA offers members the opportunity to come together as a community four times a year to hear from those at the forefront of risk and compliance best practice. Compliance can be a lonely job; you are perceived as the policeman, the whistleblower and the business interruption unit at different times. But, this is your chance to share your war stories with your peers and gather your resolve so that you can be sure that, when your firm does take commercial risks, it does so with its eyes wide open.

If you are an LCA member and the SRA does come knocking, then you will be in a strong position, being able to demonstrate that you sought out best practice. Your willingness to comply will speak for itself. And you may even get your insurance premiums down. Now, that must delight even your most unsympathetic partners.

 

 

Leah Darbyshire is community
manager of the Legal Compliance Association and head of content at Managing Partner Events.

Principal membership of the LCA starts at £995 per year, which includes access to all LCA resources and events. Principal members can add affiliate members for £99 per year for online access only. For more information, please visit www.legalcomplianceassociation.com or contact Leah on 0207 566 8275 or lca@wilmington.co.uk.

The Legal Compliance Association is a division of Wilmington plc.  Managing Partner is published by ARK Group, a division of Wilmington plc.

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