The compliance function has become increasingly important as part of the legal business landscape. The evolution of the function has mirrored the evolution of regulation and has, in recent years, emerged very much as a stand-alone service. In this article our consultant, Ellie Price, explores some market trends and the reasons why more financial services regulatory and product lawyers are actively choosing a dedicated compliance career in-house over legal.
1. The recruitment market has become increasingly busy and demand is high because of new and constantly changing regulations as outlined above. This, coupled with a greater awareness of identifying and managing regulatory risk, means that businesses realise that they require a dedicated individual or team (depending on the size of the business) to look after this area.
2. For those in the non-financial sectors, with the Bribery Act in place and well embedded in most businesses, there is no immediate rush to establish a stand-alone compliance function where it has not previously existed. A number of FTSE 100 companies are keeping this under review, but there is a definite tendency to leave compliance under the remit of the General Counsel for the time being.
3. In financial services however, there is a growing trend, especially amongst larger institutions, to split this role and differentiate between entire legal and compliance divisions. The importance of compliance departments has grown so substantially that in some larger financial institutions, they are often the same size as in-house legal teams.
In the past, compliance as a function was often viewed somewhat negatively, with Compliance Officer positions considered to be mundane and simply providing a “box-ticking” service. As the regulatory landscape has evolved in its complexity, compliance is now seen as a challenging and genuinely rewarding career path, where a compliance professional positively influences many key decisions affecting businesses. Over the last 18 months we have seen a notable increase in the number of regulatory and product lawyers looking to take on positions within dedicated compliance departments. In particular this has been an evident trend within hedge funds, as well as banks and other financial institutions.
The question therefore remains: what is it about a career in compliance that has become so attractive to lawyers?