A Law Degree is a Valuable Credential for a Career in Compliance
Bruce A. Ortwine
In recent years the compliance function has become increasingly important for companies across virtually every industry sector. Legal and regulatory requirements have grown significantly, and in recent years government prosecutors and regulatory agencies have been increasingly aggressive in both civil and criminal enforcement of these. These developments have resulted in significant costs to companies, including many large banks, amounting in the hundreds of billions of dollars in monetary fines, litigation settlements, and even criminal convictions for both companies and their employees, not to mention the incalculable costs of resulting reputational loss.
Companies have had no choice but to place a greater emphasis on compliance with relevant legal and regulatory compliance requirements, and to establish in-house functions dedicated to better ensuring compliance with those requirements. In many cases, companies have been obligated to do so as part of their settlement agreements with the government. Consequently, the corporate compliance function has grown exponentially over the past several years and has attained its own status within a company that in many cases rivals that of the more traditional and, increasingly, separate legal function.
As the compliance function becomes ever-more critical, so do the educational requirements for the persons who comprise it. In the past, few, if any, educational credentials were required for a person designated as “compliance officer.” Those days are long past. Now, an effective compliance function requires a specialized skill set that includes intelligence, knowledge of legal and regulatory requirements, independent analysis, an ability to problem-solve and in many cases make fast, on-the-spot decisions; overall, an ability to think on one’s feet, which in turn requires confidence in one’s own instincts. As a result, the traditional compliance officer is now regarded as a “compliance professional.”
There is, frankly, no skill set better suited to the demands of the compliance function than that learned in law school. The skills of a lawyer require the ability to problem solve, to analyze and assess the particular facts of a situation, and especially the ability to make reasoned yet quick decisions, especially in situations where there may not be clear “right or wrong” answers. So much of the law boils down to a consideration of all relevant pieces of information, analyzing and assessing those pieces against known legal requirements, which all-too-often do not directly relate to the particular position at hand, and then making a decision based on one’s understanding—essentially making an informed “guess” as to how the known legal requirements would apply in the particular situation being addressed.
So many compliance decision must be made in “real time” and do not offer the option of long research or discussion with colleagues who might have greater experience; rather, they must be made “in real time” with the compliance professional possessing confidence in his or her judgment, knowledge and instincts.
Anyone can make a decision quickly, but what separates an effective compliance function as opposed to an ineffective one is the extent to which the decision is organized, well thought through, and rationally based, therefore defensible if the decision involves an issue with no clear answer.
Legal training is intended to facilitate exactly those types of rationally based, defensible fast decisions that can withstand subsequent scrutiny, whether internally through an internal audit examination or externally through a regulatory examination, governmental investigation or litigation. Legal training is intended to promote a lawyer’s ability to “think on his or her feet,” and that ability plays a major role in the requirements of an effective compliance function.
Law students also learn skills that aid in developing the ability to conduct an internal investigation—a necessary credential for the compliance professional. This includes the ability to analyze and assess fact patterns to determine whether any pertinent legal or regulatory requirement may have been violated; to conduct interviews of company employees and other persons by asking questions, including follow-up questions designed to resolve open issues or clarify inadequate responses to previously asked questions; to listen carefully to each answer and use that answer to formulate the next question, all designed to draw out all of the relevant facts; to draw conclusions based on the facts learned; to act at all times professionally and objectively; and to document the results of the investigation in a clearly written, logical report.
In addition to writing skills, the compliance professional should possess verbal skills that a law student learns, especially in making a presentation to more senior management on any number of compliance-related topics and in being able to provide clear, concise and convincing responses to the inevitable questions that will be raised throughout the process.
Opportunities in compliance have and will continue to increase, across a broad spectrum of industries. Companies in all industries are continually looking for compliance professionals, not only because of ever-increasing legal and regulatory requirements, but also because the compliance field is so competitive that compliance professionals in any company are highly marketable and are often recruited by other companies. A qualified and talented compliance professional can rise rapidly, both in terms of responsibility and compensation. So the continuing need exists not only to expand the size of the compliance department as compliance requirements continue to expand, but also to replace persons who have left for more lucrative opportunities elsewhere.
Any individual who has a law degree will have no problem obtaining a position in the compliance function of a company. Once that individual obtains that position, after a required length of time spent acquiring industry-specific experience and honing skills, he or she will become highly sought after by other companies, and not necessarily only by other companies in that specific industry.
Compliance should not be thought of as a career choice that is made only because more traditionally desirable options—law firms, governmental agency, in-house legal positions, etc.—are not available. Rather, a law student should consider a career in compliance as a viable and potentially equally fulfilling career choice. And a law degree, as well as the attendant skill set obtained in the process, are powerful credentials in pursuing a career as a compliance professional.