Goodbye job applications, hello dream career
Seize control of your career and design the future you deserve with LW career
GET STARTED

4 ways to stay on top of an extremely volatile regulatory landscape

Increasing regulatory scrutiny, heightened geopolitical tensions, and the ongoing COVID-19 pandemic have driven an unparalleled pace of regulatory adjustments. 

user iconKeonia Cole • 13 September 2022 • Corporate Counsel
4 ways to stay on top of an extremely volatile regulatory landscape
expand image

According to Gartner, legal and compliance leaders have four basic alternatives for dealing with unprecedented amounts of regulatory change.

You’re out of free articles for this month
Nick Sworek, director of advisory for the Gartner Legal, Risk & Compliance business, remarked that “the blistering pace of regulatory change right now is threatening to overwhelm some legal and compliance teams”. 

Mr Sworek continued: “As the main drivers of regulatory change appear ongoing, legal and compliance leaders will need to find a sustainable way to keep on top of the requirements this will place on their organisations.

“At the beginning of the pandemic, legal and compliance leaders turned to law firms for a quick solution to track the regulatory volatility of that time. 

“In 2021, when the pace of change clearly wasn’t slowing, legal leaders started looking at less costly in-house tracking options. This year, as legal and compliance teams are finding their ‘new normal’, they are looking at technology investment as a more sustainable strategy to keep up with ongoing regulatory change and support in-house staff.”

The experts at Gartner have suggested four primary methodologies that should be reviewed in order to assist legal and compliance leaders in understanding their options for tracking regulatory change.

  1. Law firms
In the early phases of the pandemic, legal and compliance leaders turned to their law firm partners for assistance in keeping up with regulatory developments. This is a smart alternative because law firms typically have a thorough understanding of the regulations that apply across geographies and industries and do not require a lengthy onboarding procedure to bring them up to speed.

“The main drawback of using a law firm for regulatory tracking is that it’s expensive, and that cost is likely to increase further in 2022 as many law firms are set to increase their rates,” added Mr Sworek. 

“The cost factor has led many legal and compliance firms to look for a more sustainable long-term approach to regulatory tracking.”

  1. ALSPs
Nearly one-third of alternative legal service providers (ALSPs) provide regulatory tracking as a service. ALSPs are especially beneficial in situations where off-the-shelf goods, such as regulatory intelligence tools, cannot match the organisation’s requirements.

“ALSPs are a cheaper option than law firms for regulatory tracking, but they may lack the necessary institutional knowledge to understand which regulatory topics are important to organisations.” 

“Additionally, the long onboarding process associated with ALSPs can cause issues, especially when organizations need a quick turnaround to set up a regulatory intelligence program,” highlighted Mr Sworek.

  1. In-house staff
The in-house workforce possesses extensive institutional knowledge and a high level of commercial acumen. They are aware of which rules are crucial and of the processes and policies that must be modified or created to satisfy new regulatory requirements. Using in-house personnel also reduces third-party involvement, increasing process control and assuring flexibility during periods of rapid change.

“It seems like an ideal solution, except that without a much bigger pool of in-house resources than most legal and compliance functions possess, the scale of the task tends to overburden in-house staff,” said Mr Sworek. 

“A 2021 Gartner study showed that over half of lawyers were at least moderately exhausted since the pandemic, so leaders must evaluate their staff responsibilities to ensure this is a sustainable option.”

  1. Regulatory intelligence technology
Some vendor-supplied tools automatically monitor and notify regulatory changes without requiring human input. Through a number of features, regulatory tracking software tries to automate the regulatory tracking process by allowing users to track specific topics and/or laws and by delivering alerts when something changes (e.g., a regulatory agency adds a new rule to an existing regulation that an organisation is tracking).

“These tools are cost-effective for many organizations and offer a long-term solution to staying on top of regulatory volatility, while reducing the burden on in-house staff. They can also open opportunities to delegate parts of the regulatory intelligence program to business risk owners,” said Mr Sworek. 

“However, such tools still require a human to manage them, and the staff responsible will still face a potentially burgeoning workload as they integrate these tools into their workflows.” 

Tags
You need to be a member to post comments. Become a member for free today!