Monday, May 6, 2013

Do Law Firms Have the Right Compliance Measures in Place?

That's the question Corporate Counsel magazine is asking: "Looking for Top Law Firms' Compliance Programs." They report that they: "thought it would be enlightening to check out how top law firms handle compliance issues. But what it found was that either many firms don't have formal compliance programs, or else they don't want to share how they do it."

This story is interesting both because of its substance and because it's raising the profile of law firm compliance with its corporate law readers:
  • "[Kenneth] Young, a member of the American Bar Association's law practice management section, said he has worked with law firms across the country. 'Candidly, I'm not seeing a lot of formal compliance efforts,' he said."
  • "And it's not like law firms haven't had any compliance problems—e.g., lawyers charged with insider stock trading for using or leaking confidential client information... Such high-profile cases 'should be a wake-up call to law firms that robust compliance and ethics programs are as critical to their business as to their clients,' said Donna Boehme, a compliance consultant who writes the Compliance Strategist column for"
  • "Boehme also thinks law firms are missing a key chance to toot their own horns. 'It seems to me that a law firm that could boast of a robust approach to compliance and ethics would find that a significant competitive advantage,' she noted."
  • "One compliance attorney who advises corporations, and who asked not to be named, said most law firms are not set up to enforce their own compliance. 'There are no hotlines or compliance officers or other types of mechanisms' like the ones that corporations are advised to employ, he said. The lawyer suggested that compliance is a piece that accounting firms have gotten right, while law firms have morphed into full-service, global companies without making compliance a priority. 'But the services are similar, and the risks are the same sort of risks," he noted. "It's crazy.'"
Corporate Counsel reached out to top five AmLaw firms by revenue for comment and received little on the record feedback:
  • "Latham & Watkins chief operating officer LeeAnn Black also handed off to spokesman, Frank Pizzurro, who said, 'Latham will pass on discussing the compliance topic, but thanks for the outreach.'"

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