Outsourcing Compliance – Can You Afford Not To?
Solicitors notoriously work long hours and rarely have enough time to get through all the requirements of the ever-increasing demands of clients. So, when a solicitor tells me that they manage all their own compliance I ask them a few simple questions.
- What is the actual cost of you managing your own compliance? Whilst dealing with “compliance” and all that it entails could your time be better spent dealing with fee earning matters, staff development or just winning clients? Is compliance the best use of your valuable time? In the current market, it is increasingly important that each person within the organisation adds value to the business allowing individuals to optimise their core skills to manage the different areas of the business. The cost of outsourcing your compliance requirements, be it in full or as an advisory support mechanism for you is likely to be cheaper than doing it yourself.
- Given that you are probably short on time do you have time to properly stay on top of the ever changing face of the compliance regime? With the new Solicitors’ Handbook pending in 2018, the Money Laundering Regulations 2017, Criminal Finances Act and General Data Protection Regulations all either in place already or pending implementation can you honestly say you are fully conversant with the requirements and are “compliant”? The vast majority of regulations implemented in the last 5/6 years is very much based on consumers and the approach firms take to risk. Gone are the days of black and white regulations where there is a yes or no or right or wrong solution. In this era of compliance businesses must focus on the ultimate result and ensure there are clear and transparent systems in place. Ultimately it will not matter if you have an impressive written policy in place if personnel are either unaware of it, or do not understand. The key therefore is making sure your staff understand the requirements. Outsourced consultants in compliance are experts and can reduce the time you spend trying to break the back of detailed/ convoluted regulations.
- How are your internal politics? Do you have high earning colleagues who bend the rules a little but are so important to the business no one really assesses the risks they might present to the business and even if risks are found out could they be brushed under the carpet by strong ego’s putting pressure on other colleagues? Third party consultants are agnostic to the politics of your organisation and will treat all matters and personnel equally.
- Can you see the wood for the trees? If you wrote your policies how do you know they are in line with industry standards and that your team a really adhering too them. Of course they will tell you they are but wouldn’t it be helpful to have a third party properly assessing them without you having to tell your colleagues you are assessing their work?
- Finally, as a COLP/ HOLP or COFA/HOFA you have significant responsibility. What’s your defence if you miss something? By selecting an external independent expert you are protecting your position and making it easier to defend the risk based actions you take.
In reality, outsourcing is an increasingly growing area in the legal and financial regulatory area and whilst many firms are of the view they are saving time and money doing it themselves many are not doing it adequately or at all. Being behind on compliance is never fun but sadly often happens. If things go wrong the potential impact on the business far outweighs the cost of outsourcing in the first place. The benefits speak for themselves and can give you the peace of mind and assurance you need.
Can you afford not to outsource compliance?
This article was submitted to be published by Legal Eye as part of their advertising agreement with Today’s Wills and Probate. The views expressed in this article are those of the submitter and not those of Today’s Wills and Probate.