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A proposal for how in-house lawyers can help to assess and mitigate compliance and ethics risks

Jeff Kaplan published a piece on May 9th about the interplay between lawyers in law departments and a company’s compliance efforts. His idea is worth pondering.

“Much has been written on the need for C&E functions to be independent of law departments but considerably less about the critically important roles of in-house counsel in assessing and mitigating C&E-related risk. For many companies, an ideal interplay of the two disciplines can be found in a model that, among other things, articulates assessment and mitigation responsibilities for both law and C&E departments in a risk-specific way.

For instance, under this approach, on a yearly basis the law department attorney with responsibility for antitrust would be required to provide the C&E officer with an analysis – using a defined set of parameters – of antitrust risks at the company (broken down, where useful to do so, by different geographies and business segments) and of the efficacy of C&E program elements in addressing such risks. He would also offer any suggested improvements to the latter in light of the former.

The C&E officer would then review this information with the attorney and suggest possible revisions. Together with similar information for other risk areas (e.g., corruption), she would present an analysis of her findings/plans in a detailed way to senior management (or some subset thereof) in the company and in a high-level way to the board committee tasked with C&E program oversight.”

Jeff has more to say in his piece, but the quoted sections summarize his proposal.