The legal advisor is primarily responsible for drafting, negotiating and reviewing contracts. Compliance deals with violations of the code of conduct, policies and procedures, or other misconduct by those employed or contracted by the organization. In this analogy, compliance is the security team, legal is the insurance team. Compliance is the process of meeting legal and regulatory requirements, industry standards, and community expectations. A company is compliant when it operates in accordance with legal and regulatory requirements, industry standards, and community expectations.
Lawyers can be excellent compliance practitioners as long as they recognize the key difference between legal and compliance work. A lawyer defines and advises regarding the law – the rules of the road. Compliance officers develop controls, policies, procedures, and systems to ensure that company stakeholders comply with traffic rules. Unlike regulations, policies are not laws and are not in themselves enforceable in court.
Similarly, standards, which are collective work that sets out specifications and methods for achieving them by organizations with interest and expertise in the subject area, are in themselves not legally enforceable. Therefore, the authority of a particular country or organization requires individuals to follow or comply with that organization’s legal system. Every day, a compliance manager met with other business units to ensure that the proposed products and services were compliant, address the risk of non-compliance and the improvements that can be made to controls, and review proposed regulations and new compliance Review requirements. An in-house lawyer can be a very good investment for a company that wants to manage legal risks and reduce external legal expenses.
A CCO must work closely with the general counsel to ensure compliance and legal issues are addressed appropriately, that controls adequately cover legal risks, and that these controls are updated as legal interpretations and enforcement positions are adjusted. Compliance follows the law, while ethics do the right thing, sometimes even independently of the law. There is more than enough work for a CCO and a legal team to design and implement an effective compliance program. It’s just less obvious, as law versus compliance is a bit more abstract than fire protection and fire insurance. That’s why an analogy with these more accessible features helps clear things up.
Join the Compliance Design Club today and equip yourself and your program with simple, sophisticated tools that make compliance easier for you and your employees. The main difference between regulatory compliance and ethical responsibility is that regulatory compliance must be met, while ethical responsibility is a choice. The goal of an in-house lawyer is to create value through the combination of legal training and experience and knowledge of a company. And when it comes to explaining the difference between law and compliance, the intricacies and nuances can be enough to turn heads off any chemical manufacturer or retailer.
Once this basic principle is understood and the expertise each has in their respective areas of responsibility, a CCO and a general counsel can build a lasting friendship and partnership as part of the company’s effective compliance program. This person cannot engage in any legal activity within the meaning of the relevant regulatory instruments, unless they are also qualified as a lawyer. As compliance programs mature, lawyers also grow and with it their relationship to the compliance profession.