From Corp. Counsel, Vol. 16, June 2009 at 66, we learn about the compliance function at The Hartford Financial Services Group. “The law department’s compliance group has a staff of 35 (13 of them lawyers); another 250 compliance officers, only some of them lawyers, are deployed in business compliance units.” Packed into that single sentence are several management points worth unpacking.
a) Compliance at the Hartford relies on the legal department for legal guidance, but does not report to it (See my post of Jan. 20, 2009: reporting lines of compliance function with 11 references.). No reporting line dominates among US companies.
b) The decentralized lawyers deployed throughout the company who do compliance exemplify what I refer to as “hidden lawyers” (See my post of March 9, 2009: one survey estimated the percentage of hidden lawyers at 8 %.).
c) Compliance functions have a much higher ratio of non-lawyers to lawyers than do legal functions. Many compliance tasks are delegable to paralegal-level employees (See my post of July 9, 2007: paralegals with 11 references; and June 22, 2008: paralegals with 18 references.).
d) The primary obligation to ensure compliance with laws falls on business managers, not on the legal department or even on legal plus compliance groups. It is the same with ethics.