The first Monday of each month is designated for the senior management meeting at a 15 partner law firm with 180 staff (Firm A). The meetings held in the conference room located in the centre of an open plan office with floor to ceiling glass walls are characterised by a mix of laughter, informal discussions and a generous lunch provision which overflowed to staff in close vicinity of the conference room. 

However, on this particular Monday there was a distinctly different feel about this senior management meeting because all the partners were also going to be in attendance. The reason for the combined partners and senior management meeting was a letter received from the firm’s most important client. The client had experienced rapid growth through recent acquisitions and mergers and it was reviewing its legal services panel as it anticipated that its legal spend was likely to increase by 200% over the next few years and it was exploring how best to do more for less.

Is Your Compliance Leader Effective
photo credit: bernat… via photopin cc

The client in the recent letter to the firm acknowledged receipt of the firm’s tender proposal including the information provided in response to the question ‘Are your compliance arrangements suitable?’ However, the client required further information prior to the firm presenting its proposal at the tender interview. The client required the firm to demonstrate how it ensured that the compliance leader is effective.

This request for supplementary information caught the firm off guard because they had not previously considered an assessment of the effectiveness of the compliance leader. The reason why this issue had not been addressed is because there was a distinct lack of enthusiasm to assume leadership of the compliance function and the chosen compliance leader was in effect a reluctant leader and tacitly exempt from close scrutiny with regard to effectiveness.

So this special meeting of the senior management and all partners was to begin the process of identifying the pertinent issues with regard to assessing the effectiveness of the compliance leader.  The managing partner indicated that a checklist with a long list of relevant questions to consider on this issue had been tabled and the purpose of this meeting was to agree a shortlist of appropriate key questions.

After lengthy and tense discussions facilitated by many cups of coffee, the group identified the following key questions as the most relevant to determine the effectiveness of their compliance leader:

  1. Does the compliance leader primarily promote compliance to legal and regulatory obligations?
  2. Is the compliance leader easily approachable to discuss minor and major compliance issues and/or potential issues of concern with everyone in the firm?
  3. Does the compliance leader facilitate the delivery of timely, relevant and comprehensive training for all staff in the firm to ensure effective compliance?
  4. Does the compliance leader adopt appropriate tools and processes to monitor and track compliance issues in the firm?
  5. Does the compliance leader maintain positive, proactive and constructive relationships with influential people across the firm?
  6. Is the compliance leader well respected by employees particularly leaders in the firm?

Satisfied with the outcome of their internal brainstorming session, the firm’s delegates (excluding the compliance leader) attended the tender interview with confidence that their client would be reassured that their approach to managing risk and compliance was robust and effective.

A few days after the tender interviews with the shortlisted firms, the client invited the firm (Firm A) back for a meeting to provide feedback on the outcome of the tender process. The client indicated that they have decided to move their business to another law firm (Firm B) because they demonstrated that their approach to risk and compliance was embedded in their ways of working and facilitated a more consistent and better client experience. Furthermore Firm B’s compliance leader provided valuable information during the tender interview which reassured the client that the role was clearly influential in the firm with proactive input in the formulation of strategic priorities and has the freedom to meaningfully challenge any proposals that present risks to client outcomes.

Following the massive disappointment of losing this client account, Firm A called another emergency meeting of the senior management and all partners on the next day which was surprisingly on a Thursday to discuss the implications. Unsurprisingly, the main item on the agenda was ‘Reviewing our approach to risk and compliance to keep and win clients’.

Is such a strategic review due at your firm?