Opinion | 06-08-15

China focus: Compliance as a career path - how to transition to the role of a compliance officer

In our article last month, we outlined the role of the compliance department. This month we will be shareing some insights on the current market and gives some tips on how lawyers can transition into a compliance role. 

Would a compliance role be the right fit for you? 

Before considering a move into a compliance role, it is important to understand the focus and drive needed to cement a career in this area. Currently in China, Compliance Officer roles are amongst the most popular in the market. It is often easier for an in-house counsel to progress into compliance as they already have an understanding of its role within a business and have a solid legal background. Therefore, for many in-house counsels, a transition to compliance is the natural option for career progression.  However, it is important to reflect on your own personal suitability for a compliance role, as this easy progression may be suitable for your career, but not necessarily for you as an individual.   

Compliance work includes drafting policies, consulting, training and investigating. The legal basis of compliance revolves around the Foreign Corrupt Practices Act (FCPA), which was initiated by the US in 1977, and the UK Bribery Act 2010, as well as the internal compliance policies issued by the multi-national companies (MNCs) based on the FCPA regulations (all together “compliance policies”). Compliance is heavily detailed, concrete and unchangeable. This often provides the compliance officer with little room to maneuver and little opportunity to find various solutions to a problem. This can result in a certain routine of tedious work, which can be restricting for an in-house counsel not used to the limitations of the external statutory laws. 

The investigation aspect of a compliance role means that the individual is required to travel, interview and audit invoices. This is often seen as light “legal” work whereby no legal knowledge is required and therefore, many lawyers often feel that compliance is a side step away from more formal legal work. 

Why should you consider a role in compliance?

The straightforward answer to this is because you could progress your career faster and further compared to within a pure legal role. However, there are a number of other reasons: 

  1. Competition in the compliance sector is far less severe than in the pure legal sector. Many MNCs in China have built up their legal teams over the last few years and therefore are no longer short of in-house counsels. In order to progress further, in-house lawyers now need to compete not only on ability, IQ and EQ, but also on education and academic qualifications,  overseas experience and qualifications, private practice experience, corporate experience, and even industry sector experience. At the more senior end competition only increases. Therefore, making a move into compliance, particularly within the highly regulated industries (such as healthcare) where compliance is crucial to the business, can give you exposure to complex compliance and regulatory work at a higher level. 
     
  2. A move into compliance can often be a more logical step for a legal professional compared to someone with experience of finance or operations because lawyers have a better understanding of compliance policies and can be more flexible during the execution of these by combining the local anti-corruption and antitrust rules, by leveraging their legal practical experience. 
     
  3. A compliance role may provide the team management experience essential for career progression.  Due to the differences in the job responsibilities of legal and compliance, the compliance team is usually much bigger than the legal team. A legal team often consists of sole contributors and it is quite common for a senior lawyer with 10 years’ experience to have no team management experience.  However, Heads of Legal/Compliance are always required to have team management experience and often this is difficult to gain within an in-house legal team or private practice. Compliance teams will usually have more reporting layers due to the large team size, which provides candidates more opportunities to gain team management experience, even at the more junior /mid-level. 
     
  4. A move into a compliance role can help lawyers to convert to in-house counsels and/or help them to enter a new industry without specific sector experience. For example, in China we are seeing more and more healthcare companies request lawyers with related industry experience when recruiting a legal head/senior in-house counsel. On the other hand, when recruiting compliance officers, they are looking for candidates with a legal background and some knowledge of compliance, but are not overly concerned with finding candidates with industry specific experience. This is because currently there are few compliance officers with legal background and industry experience available in the existing market.

How to plan for a compliance role as part of your career path

Most importantly, when considering the best path you must decide whether or not you are willing to take on a compliance role. 

For a lawyer, it is advisable to choose an industry/business which values compliance and one where compliance is at a similar level to that of legal. In the healthcare industry for example, compliance is as important as legal. With regards to the work, it would be better to choose a role with more focus on policy making and consulting rather than a role which is driven by investigation, as this is more aligned to legal. 

Converting to compliance does not mean that you would have to stay in the compliance function forever. As already highlighted, it is easier for a compliance professional to move to the legal function within the same company. Compliance departments are often closer to the business than even the legal department. Therefore, after working within a company and gaining understanding of its commercial drivers, it is much easier to successfully move to the legal department. It is very common for MNCs to allow candidates an easy transition internally from compliance to legal because of the importance placed upon industry experience and business understanding.

Whether or not to make a move into compliance is always going to be down to very personal factors. You need to decide if the role and work is going to be right for you and if it is going to produce the longer term gains you are looking for. However, in China, compliance is still a relatively new concept to the legal market, and therefore there are lots of opportunities available at a variety of levels, making now a great time to think about a move like this. 

If you are looking to make a move into compliance or want to grow your compliance team please contact Shawn Chen on +86 21 6103 7331 or via email [email protected].