What to Do When Your Compliance Department Needs Legal Advice

According to Assistant Attorney General Leslie R. Caldwell, the purpose of corporate compliance programs is to not only protect your customers, but also to protect your company’s reputation, all counterparties, and the public as well as comply with the law.

While many companies have few problems understanding the purpose of compliance laws, sometimes navigating those laws can be confusing. As the laws, rules, and regulations change, company practices must also change. To do that, you need to know exactly how the changes apply to your business.

This is where trusted outside legal counsel can be incredibly helpful for your business if you can’t employ legal counsel full-time. To help you, DialConnection has created this helpful guide about what to do when your compliance department needs legal advice.

When Do You Need Help?

When it comes to seeking legal advice, your compliance officer (CO) must be able to distinguish between compliance issues that can be solved internally and those that require outside help. The CO should gather and analyze facts by regularly auditing your company’s adherence to internal policies and procedures and external client and regulatory requirements. The CO should then determine the root causes of compliance failures as well as constantly reassess your internal compliance standards.

This person should also be able to organize and position the data in a way that shows exactly where there’s a need for improvement or change. When there’s a question about how to remain compliant, the CO can then contact your outside counsel for more information about the proper ways to be compliant.

What Kind of Help Do I Need?

One of a CO’s main responsibilities is working with your outside counsel. Since many serious compliance issues will necessitate legal advice, you want to make sure the door is open between these two professionals so you can ensure that your company is complying fully. The outside counsel you work with should be familiar with compliance issues specific to your industry and have experience working with companies like yours so you’re both on even ground when it comes to maintaining compliance.

Before working with this counsel, be sure to establish attorney-client privilege immediately so, in the event that you find that you’re not compliant, your company is legally protected. The CO will work closely with the outside counsel using the data and analysis from your regular audits to ensure that your business practices follow the laws, rules, and regulations regarding compliance.

If your legal counsel advises for corrective action, it’s imperative that you follow this advice immediately and document everything. This will ensure that you’re on the right side of the law should you be audited. Going forward, from topics such as letter review to labor issues, you want your CO and outside counsel to work closely to ensure that your business practices make compliance an everyday practice.

If you’re operating in the accounts receivable management space, you should consider leveraging your outside counsel when working with your errors and omissions insurance carrier, which unfortunately will happen a lot. These carriers typically use a large nationwide network of attorneys and will assign one to you for each of your claims based on the part of the country where you’re having an issue.

This gets complicated if you have several claims in different parts of the country because you’ll be forced to work with several attorneys simultaneously. This typically puts you in a position where you don’t know what you’re going to get in terms of service, communication, legal advice, responsiveness, and billing practices.

To simplify this process, you should work out an arrangement between your carrier and your outside counsel so all claims can be placed with your outside counsel. They can then perform a majority of the required work at a most likely reduced or at least competitive rate based on a larger volume of work.

After your outside counsel performs the work, they can then work with your insurance carrier’s assigned local counsel to file documents, manage court appearances, etc. Creating a process like this will prove to be efficient and cost-effective because your outside counsel will have a firm understanding of how your company operates and be able to communicate with your insurance carrier and their local counsel effectively, which will enable you to focus on operating your business.

Learn More with DialConnection

The best way to maintain compliance is to regularly conduct internal audits on all of your business practices. Over the next couple of weeks, we’ll go over how to make an internal audit plan and how to use the data you collect to implement an effective compliance strategy.




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