Ethics Column: Annual Reflections from the Compliance Corner

Ethics Column: Annual Reflections from the Compliance Corner

Tracey Calvert

Tracey Calvert

Oakalls Consultancy Limited

tcalvert@oakallsconsultancy.co.uk

www.oakallsconsultancy.co.uk

 

ANNUAL REFLECTIONS FROM THE COMPLIANCE CORNER

 

Part of my job description as a consultant is to be a scout for my clients, scanning the legal and compliance world on the look-out for changes, challenges and trends which may be relevant to them. We have certainly had more than our fair quota of these in 2016. I had thought at the start of the year that we may be entering a period of inactivity and bedding down and consequent calmness but it’s all been quite a whirlwind.

 

In terms of changes, we are of course now working with the 18th edition of the SRA Handbook. Whilst we now know that this style of Handbook is not going to survive for too much longer, we are expected to continue to respond and adapt as necessary so there is no excuse not to stay up to date simply because we know that the current materials will soon be defunct.

 

One of the biggest changes reflected by this year’s batch of Handbook revisions has been the switch from hours-based continuing professional development to continuing competency aligned with the Competence Statement issued by the SRA. This statement is very interesting reading for compliance professionals. The SRA uses a definition of competency first described by two academics, Eraut and du Boulay, in 2001 so that they are demanding of us: "the ability to perform the roles and tasks required by one's job to the expected standard".

 

Describing competency in this way suggests to me that we are not simply required to be good at the black letter law and we must develop or acquire new skills to demonstrate competency. Business skills, supervisory and people-orientated skills, and client care related skills all spring to mind when considering the various roles which an individual solicitor may need to perform depending on what they do and where they sit in the firm’s governance structure.

 

Whilst I have heard several negative comments about this change, particularly in circumstances where budget is an issue and cost-cutting may dictate the response, this reformulation can be an exciting opportunity to develop bolt-ons to the legal standard expected of solicitors. This year I have worked with a number of firms which have taken the Competence Statement and the SRA’s Handbook changes and harnessed these to new visions for their partners and employees. This has been borne out in revamped appraisal systems and internal training packages. In this way continuing competency supports not just regulatory compliance requirements but also develops the individual as a positive force for the firm’s brand. For this reason, I like the changes we have seen this year.

 

The challenges I mentioned in my introduction have been many and varied Brexit is of course the obvious external force that has come to pass this year. I was asked to sit on a Brexit Panel at Ark’s Risk and Compliance Conference earlier this month and it was interesting to hear the views of the other panelists and members of the audience. What is clear is that nothing will change immediately but equally that a “head in sand” attitude to Brexit will not do.

 

If and when it does happen, the post-Brexit landscape ought not take law firms by surprise. As compliance professionals, it is important to ensure that we are ready to help our employers by informing them about sensible forward thinking. What’s clear is that there are few answers yet, but we should all be in the process of formulating the questions. These will be conundrums such as the following: does Brexit alter our firm’s position in the European market, what about our lawyers and what they need to do in Europe, do we employ European lawyers and need to ensure that we manage their expectations about the consequence of change, will Brexit alter firm dynamics so that in future some department are busier than others, where does Brexit sit in the firm’s strategic thinking. At the very least, should Brexit be added to the firm’s risk register?

 

In terms of trends, I have been conscious of the re-emergence of good old-fashioned professional ethics this year, not as an offshoot of compliance but as a standalone force to be reckoned with. Of course, ethics never went away but it has been on the backburner in recent years whilst both the regulator and the regulated have concentrated on regulatory compliance issues and their new style of relationship. The SRA’s Question of Trust campaign, and many SDT decisions, call into play such basic behaviours as what integrity means and has it been demonstrated, are we independent of all internal and external pressures, and what does it mean to hold the role of trusted adviser. My observation is that the owners of law firms must have confidence in their colleagues that they will do the right thing. For this reason, basic ethical upskilling should be on the compliance professionals’ agenda. Are we confident that we can trust our colleagues to act ethically?

 

So, what is around the corner for the compliance professional in 2017? In my opinion, simply more of the same. We will have further consultations from the SRA and more clues about their new style Handbook which is now likely to be launched in early 2018. The regulator will continue to have a risk-based impetus and this must influence our internal priorities. We may start to get clearer indicators about the impact of Brexit. In pure legal terms, we will know more about changes in national anti-money laundering and data protection legislation and will need to plan for these.

 

In the midst of all of this the compliance professional’s position is clear. Compliance is increasingly regarded as an essential and core function in law firm governance terms. With this is mind, I would like to finish this article with a more personal reflection. One of the highlights of my year has been working with the International Compliance Association (part of the Wilmington Group), on the creation and launch of their Advanced Certificate in Legal Compliance.

 

Compliance is a credible alternative and addition to the legal services industry and this accredited qualification is the first of its kind in the UK. I continue to be associated with the qualification, and have recently met the second cohort of students passing through the workshop experience. The feedback I have received for the course has been very encouraging. Details of the course, and entry criteria, are available via http://www.int-comp.org

 

Tracey Calvert

16 December 2016

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