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In-house lawyers making big moves to avoid scandal

Posted by: Laurence Simons 16/05/13

Compliance and ethical behaviour have always been central to how companies in the public eye carry out their business - after all, non-compliance and bad behaviour are clear routes to unprofitability, the worst of all potential sins for companies keen to succeed.

However, the recent climate in the UK has made FTSE 100 firms even more aware of the importance of staying on the straight and narrow, thus thrusting in-house lawyers into an important position where they can offer guidance on how to avoid legislative pitfalls.

Heavily regulated sectors such as oil, gas and pharmaceuticals have led the way when it comes to risk and compliance issues in the past, but the reality is that all kinds of companies now need to be very aware of their legal standing or risk losing a lot of cash.

Jacqueline Barrett, a qualified lawyer and group compliance director at Vodafone, told Legal Weekly that there are a number of different drivers pushing the move towards stricter compliance in the UK, but also across the world.

"It is more a global phenomenon of greater regulatory scrutiny and the consequences flowing from that - in particular, the enforcement activities of some of the US regulatory authorities," she suggested.

Fundamentally it boils down to a fear of consequences - like naughty schoolboys, businesses are willing to act up until they are told that they'll not be allowed to play football at lunch for the next six months unless they toe the line.

"The damage to reputation and the trust of consumers, as well as the fact that it can be costly, intrusive and take a long time to resolve means companies are keen to avoid such situations," explained Ms Barrett.

While the EU competition law and the Bribery Act have been important, the hard-hitting attitude to regulators in the US has been one of the most crucial factors in changing how compliance is perceived, concluded the Vodafone lawyer.

So with many companies frightened of the big stick represented by newly-eager regulatory bodies, in-house lawyers have got the chance to help guide their organisations through the complicated regulatory system. The stakes may be higher, but so are the benefits.