A CCO doesn’t necessarily need a legal background. Some think it’s better when they hail from somewhere else, in fact. Nicole Di Schino considers whether a legal background works for or against the compliance pro.
Should your next chief compliance officer come from the business ranks of your company rather than from the legal team? Denis Jacob, Vice President and Deputy Chief Compliance Officer at Orthofix, says yes. He made the comment at the SCCE virtual conference in September, and this got me thinking: Is a legal background a help or hindrance to a professional working in compliance?
And if it’s a hindrance, how can those of us who spent our formative professional years as practicing lawyers overcome that background to become first-class compliance specialists?
The Evolution of the CCO
“I have nothing against CCOs with legal backgrounds,” he said, but “I don’t think it should be a requirement,” Jacob says.
But historically, of course, it was.
Twenty years ago, most companies demanded that their compliance officers be lawyers, said Maurice Gilbert, a compliance recruiter and Managing Partner at Conselium Compliance Search. The profile of a typical compliance officer was “somebody out of the government, a kick-butt litigator who was going to come in and read the riot act to people.”
Companies slowly realized that this model was a failure, Gilbert said, because “everyone was petrified of the chief compliance officers.”
A new trend emerged about 10 years ago. Rather than looking for enforcers, companies were beginning to request compliance officers that could act as educators, Gilbert said. While most compliance officers were still attorneys, companies wanted individuals who could “befriend the key stakeholders and get to know where the skeletons were.”
An informal poll may reveal that people are even more open-minded about a CCO’s background today. Steve Harrison, also a compliance recruiter at Conselium, posted a LinkedIn poll earlier this year, asking professionals to weigh in on how important it is for a compliance officer to have a J.D.
The results were telling: 31 percent of respondents said that it was “not at all” important, while only 11 percent said a J.D. is essential. The remaining 58 percent of respondents indicated that a law degree was “nice to have” or “very useful.”
Harrison said that he was “a bit surprised” that even 11 percent of respondents consider a law degree essential. While some of his hiring authority clients still ask for CCOs with legal backgrounds, many are open to looking at a wide range of candidates and some are looking specifically for someone who is not a lawyer, he said.
An Under-the-Radar Controversy
In conversations with other current compliance pros, I’ve observed that most believe a CCO does not need a legal background to be successful, including Jacki Cheslow, the Global Compliance Program Leader at IEEE. Cheslow, who does not have a law degree, said she “strongly disagrees” with any push to have a lawyer as a CCO.
“Compliance is what it is today because we are a blended profession,” she said. “We need all kinds of talent.”
Those who disagree with this position tend to do so quietly, perhaps to avoid the risk offending friends or colleagues who didn’t attend law school. After I promised anonymity, a former chief compliance officer of an international media company explained her reasons for dissent.
“Lawyers are trained to think in a very deep and analytical way … [and they] tend to have much more confidence in their ability to interpret the law and to apply its requirements to their program than non-lawyers,” she said. “The ability to review new laws without needing the legal department or outside counsel to do it for you creates an immediate cost savings.”
She acknowledges that many lawyers are “too legalistic in their thinking and writing,” but considers that a reasonable trade-off for “the important work of deeply understanding the law, regulatory guidance, deferred prosecution agreements and prosecutorial actions.”
Between those benefits and “the capacity to claim privilege over investigations and much of the work involved in the program, the argument answers itself,” she said.
The Trouble with Lawyers
Murray Grainger, Country Manager for Spain and Portugal for Business Keeper AG, disagrees.
He says lawyers serving as compliance officers often lack the key characteristics needed to guide a company through risky waters.
“A person absolutely does not need to be a lawyer to be a good compliance officer,” he said.
“Compliance officers need to be spending 75 percent of their time training and communicating. Those are not core legal skills.”
Nor are lawyers given the ethics training they need to steer the compliance ship, he said. “When I was in law school, the ethics module was limited to ‘don’t embezzle client funds.’ The world of business ethics is obviously a very different animal from that.”
Cheslow has observed a similar problem in that it can be difficult for some lawyers to “take off their legal hat.” While something may be legal, it is not always ethical, she said. “It isn’t that black and white.”
So, if our legal training isn’t always a benefit, how can those of us who are recovering lawyers retrain our brains to make ourselves better compliance leaders?
Maybe the first step is to know what you don’t know.
Retrain Your Legal Brain
“Sometimes people aren’t humble enough to say, ‘I need to learn more about this topic.’” Jacob said. “It’s important to recognize where your legal training may be blocking you.”
Grainger offered insight here, too. He said the best way to combat the negative aspects of your lawyer brain is to actively embrace learning.
“When I started in compliance, I did training courses, I went to conferences, I did lots of benchmarking with other organizations to find out what ‘good’ looked like,” Grainger said. “I had to drink from the firehose of learning about effective compliance. It didn’t matter how good I was as a lawyer.”
Seek Out Other Experts
Jonathan Turner, the Global Head of Compliance, Privacy and Governance at ZOLL Medical Corporation, suggested that lawyers working as compliance professionals look for colleagues who have complimentary talents. To help build an effective program, they should seek out data scientists, auditors, marketers, human resources professionals and more, he said.
“What makes a diamond sparkle is the number and diversity of angles in the facets, and what makes a compliance team succeed is the number of differing perspectives,” Turner said. “More of the same has limits on utility.”
Lawyers also have a bad (and sometimes well-deserved) reputation for thinking they are the smartest person in the room. If employees get a whiff of this kind of attitude, it can utterly decimate compliance efforts, Cheslow said.
“A CCO needs to understand that the team needs a variety of people. She has to recognize that she can’t do it all and that there are facets to a compliance department that don’t exist in a legal department,” she said.
So how do we ensure that key stakeholders in every department and at every level of management will know that we value their input and opinions? As I tell my children, it’s important to turn on your listening ears.
“Empathy, the capacity of working with people, is very important,” Jacob said. “A CCO should have navigational skills across the organization.”
Grainger agrees, noting that “relationship building is not a legal skill” and may require practice.
Lead. They Will Follow
Cheslow takes it a step further, insisting compliance professionals must do the hard work of understanding how and why their colleagues behave in certain ways. They must become social scientists.
“When managers talk, people listen. When leaders talk, people follow. A CCO needs to engender passion and motivation,” she said. “Put in the time, effort and energy to drive human behavior and do so in a way that is not only ethical, but benefits the business.”
Hone Your Business Skills
Many legal professionals, even those in-house, have spent limited time working in the business sides of the organizations they represent. But understanding how a company operates is key to building a successful compliance program, Jacob said.
“If you are joining a compliance organization from an outside law practice or from the internal legal department, make sure you take time to truly learn the business. Ask lots of questions. Understand the products or services your company develops. Know what makes the company profitable. Research the process the company uses when its entering new markets or new geographies,” he said.
A Call to Action: Keep Growing, Let’s Flourish
So, after all of my research, did I decide a legal background works for or against you in the compliance field? In true lawyer fashion, my conclusion is, it depends.
I believe that lawyers who are humble enough to re-wire their brains can make excellent compliance professionals. Those who believe they already know everything they need to know to succeed in compliance? They’ll have a much harder time.
The key, it seems, is continued growth. I encourage my fellow lawyers-turned-compliance-professionals to work at continuous improvement. Our legal backgrounds already allow us to easily navigate tricky regulations and legalese. Armed with compliance knowledge and leadership skills that can assist us with traversing human relationships, we can make lasting and important contributions to our chosen field.