Posted by Michelle Garlick, a partner in the professional risk team at Legal Futures Associate Weightmans
Christmas has been and gone and the festivities of New Year are over. Despite the hangover, is the real headache yet to come? Possibly, if you’re starting 2013 as your firm’s compliance office for legal practice and/or for finance and administration (COLP/COFA).
I made a resolution this year to do more exercise and get fit. It’s the same one I make every year and its going well so far – I’ve actually made it to the gym a couple of times. But will it last, I ask myself? My previous record suggests not – I don’t enjoy the gym and let’s face it it’s pretty boring on that treadmill and if I can find an excuse not to go, I will.
I know that my willpower needs more work to force myself to make the time and I am determined that this year will be different so that when I look back in a year’s time, I will be able to see the rewards of my labours.
What’s this got to do with COLPs and COFAs? Well, from my discussions with many who will now have been appointed, quite a lot. A COLP and COFA’s responsibility to ensure the fitness of their firm has now started and it’s here to stay. You will be required to demonstrate effective governance and risk management from 1 January onwards. For the roles to be effective, there must be a proper governance structure and clear reporting lines that empower the COLP and COFA sufficiently, as well as systems for ongoing monitoring and active management.
There is, I think, a reluctant acceptance amongst appointed COLPs and COFAs that these roles will have to be carried out and to the best of your ability but there is understandable concern about how to go about fulfilling the roles and the amount of time being the COLP/COFA will involve.
Many will find dealing with compliance and risk management new to them, difficult to understand/deal with and/or boring in comparison to fee-earning or other management responsibilities. For those COLPs/COFAs with a fee-earning role as well, there will be the temptation to put non-chargeable risk management work to the bottom of the pile underneath chargeable work.
There might well be a surge of activity and enthusiasm at the start but as time goes on and other priorities come to the fore, the risk of neglecting the fitness regime increases. This can’t be allowed to happen.
So what should COLPs and COFAs be looking to do in the first month of their new role? It does, of course, depend upon how much work has been done in preparation beforehand. If the answer is ‘not much’, have a look at my pre-1 January 2013 checklist here.
The first month in my view should be about communication and getting used to the role:
- Inform/remind all staff who the appointed COLP and COFA is and explain your role. Provide suitable training on the staff’s responsibilities, the reasons why compliance with procedures and systems is so important and the need to report issues to the COLP and COFA. Bring risk management and compliance to the forefront of people’s minds;
- Check that the reporting lines are set up/meetings with other relevant managers diarised;
- Check that necessary templates and procedures for monitoring compliance and recording/reporting breaches are set up;
- Check the risk register and identify any areas which need further work and create a plan of action to ensure these are addressed. Prioritise the high impact and probability risks and focus on these initially; and
- Ensure you have factored in sufficient time in your working day and financial budgets to carry out your role effectively.
In the same way as I have put a plan in place to ensure that my enthusiasm for the gym doesn’t wane (if you are interested, it involves setting myself achievable targets and goals within realistic timescales and involving people close to me to encourage and support), so too should the COLP and COFA feel able to call upon assistance and support.
This can come from internal support through delegation (although responsibility will always lie with you and, of course, the firm), but also external assistance through outsourcing certain tasks such as claims and complaints handling, file reviews, compliance auditing and policy and procedure drafting. Consider it as an Alka-Seltzer for your headache or a personal trainer for your firm’s fitness.
Good luck and hopefully, like me and my relationship with the gym, you will look back in years to come and realise the effort has been worthwhile.