‘There are those,’ Clyde & Co partner Richard Harrison tells this week’s roundtable discussion on risk and regulation, ‘who think that they’re above it all and it doesn’t really apply to them. They’re so obsessed with themselves and their own success, and so focused on the deal.’
The roundtable attendees, most of whom specialise in professional regulation or compliance, recognise the ‘rogue partner’ type described – the City rainmaker who thinks regulation is for ‘the little people’. From its inception, the SRA appeared to reinforce this perception.
After assuming its full powers 15 years ago the regulator launched consultation exercises aimed at improving its understanding of solicitors working in the City. How, it seemed to say to them, would you like to be regulated? In summary, the answer the regulator got from these firms was that they are so sophisticated and their systems so good, they could be relied upon to police themselves. The message was pretty much, ‘we’ll call you if we find something’.
Of course, money turns heads in the Square Mile. For those within City firms charged with managing compliance and risk, the mood music from the regulator could have been more helpful. A professional seeking to embed and then maintain a compliant culture from within is up against their colleagues’ ever increasing pressure to meet billable targets and to get deals over the line. What chance do compliance or ‘wellbeing’ have against such fierce headwinds?
If deals come unstuck, or enforcement authorities uncover misdeeds, the result is, of course, a disaster for even a substantial firm. But what are the chances of that?
The chances are enhanced by the Economic Crime and Corporate Transparency Bill, currently in the House of Lords. It includes a new criminal offence of failing to prevent fraud, and as to the intention of the legislation, RPC partner Sam Tate points out: ‘I’m afraid that law firms are in the crosshairs.’
Oddly, and in the absence of many other counterweights to cash, that might be just the thing to focus rogue minds on risk.
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