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What Is Compliance Counseling?

J.B. Ruhl

What Is Compliance Counseling?
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As the regulatory state continues to expand, compliance counseling is growing fast. It is also largely ignored in the law school curriculum as a systematic course of learning. There is no mock compliance competition or compliance drafting class. Even Richard Susskind’s Tomorrow’s Lawyers—the book I assign in my Law Practice 2050 class at Vanderbilt Law School—leaves compliance counseling out of the picture in its insightful discussion of litigation practice and transactions practice “decomposed.” Yet, compliance counseling is a discipline every bit as much as litigation and transactions.

What Do You Want to Do? Litigation, Transactions, or Compliance?

Clients need compliance counseling in a vast array of contexts. Any start-up company, for example, needs help in understanding how to comply with employment, securities, corporate, and other regulatory programs. Even an established company will need compliance assistance for developing a new product or proposed new industrial facility, and ongoing operations may seek compliance check-ups to reduce enforcement and litigation exposure. Then there is the myriad of permits, licenses, and other authorizations needed to do anything from building a deck in your backyard to opening a new nuclear power plant. And sometimes, companies miss the compliance mark, leading to questions regarding correction and disclosure.

Systematic Approach to Help Clients Navigate Compliance Challenges

Build Domain Knowledge

To provide compliance advice, a lawyer must become an expert in the relevant legal domain. But, it is also essential to build expertise in the business domains and other spaces the law is regulating—to understand how the two interact.

Develop a Compliance Analysis Flowchart

OK, I am a flowchart freak, but virtually any compliance problem can be reduced to a flowchart. True enough, they can be complex, but this is where the expertise comes into play—in developing a flowchart that works. It must embed all the relevant legal questions and sort compliance from noncompliance.

Assemble the Relevant Facts

Just as litigators plug facts into the elements of a claim, the compliance lawyer must find the client’s facts relevant to the compliance flowchart.

Apply the Facts to the Flowchart

The skill here is in identifying where more facts are needed to reduce ambiguity. Running through the flowchart is an iterative process.

Identify Instances of Compliance, Noncompliance, and Ambiguity

Once all the facts are in and as much ambiguity as possible is squeezed out of the analysis, it’s time to pin down instances of compliance, noncompliance, and lingering ambiguity.

Advise Regarding Noncompliance and Ambiguity

Although instances of compliance are important to identify for assessment and learning, the priority at this point is to determine how to handle instances of noncompliance and ambiguity. If the compliance counseling is for a planned activity, there may be ways to redesign the action to avoid noncompliance (e.g., relocate planned buildings out of protected habitat). If it is for an ongoing or past activity, reporting obligations and potential enforcement consequences must be assessed. As for ambiguities, risk assessments for different courses of action can be developed.

Assist in Long-Term Compliance Strategies

Although compliance counseling often involves one-off assessments or proposed or ongoing actions, developing long-term compliance strategies that learn from those one-off assessments is increasingly important in highly regulated industries.

Become the Compliance Counseling Expert

With new regulatory fronts opening almost continuously, young lawyers can develop compliance counseling expertise for an emerging regulatory program as fast as anyone else. When you spot such an opportunity, build the knowledge, craft the flowchart, write about it, and talk about it—become the compliance counseling expert.