“Rules are for the obedience of fools, and the guidance of wise men [and women].”

I am not sure the Solicitors Regulation Authority, or any other current regulator, would agree with this sentiment, especially when you take into account the following from its Principles and Codes of Conduct:

• ‘The SRA Principles comprise the fundamental tenets of ethical behaviour that we expect all those we regulate to uphold’
• ‘The Codes of Conduct describe the standards of professionalism that we, the SRA, and the public expect of individuals authorized by us to provide legal services.’

In an ideal world, a firm would draft appropriate policies to ensure employees met the standards and requirements of both the firm itself and its regulator, and employees, once trained on them, would ensure they complied as required. However, this is not an ideal world as it is filled with humans who don’t always do what you want them to do!

So, how do we try and ensure those who work for us do as we would like them to do?

I read an excellent book recently called ‘Humanizing Rules – bringing behavioural science to ethics and compliance’, written by Christian Hunt (https://www.dhirubhai.net/in/humanrisk?lipi=urn%3Ali%3Apage%3Ad_flagship3_profile_view_base_contact_details%3BPJ7lxSlBQgSmE6ROSRqzPg%3D%3D) , in which he provided some fascinating insights into why some people don’t like rules and obeying them, and how firms can go about changing mindsets using behavioural science; it is well worth a read, and no, I am not receiving a commission for the recommendation!

When firms get employees to read their policies, many will require them to sign a statement at the end that says something like, ‘I have read and understood this policy’, but have they really understood it? As suggested in the book, perhaps we should give employees the option of saying, ‘I have read, but do not understand this policy’, with the firm then providing clarity around the areas they have not understood; just because we write a policy that we want? employees to follow doesn’t mean that all of them will actually understand it and therefore implement it as envisaged.

I noted in the book something that just about all compliance practitioners have known for ages, and that is that some people see compliance as boring, dry and an obstacle that just gets in the way of doing business, but perhaps, if we changed the function description from ‘Compliance’ to ‘Profit Retention’ it would get a better reception?

But what do I mean by ‘Profit Retention’?

Again, in an ideal world, firms would be able to attract clients and provide competent legal services, where there were no complaints or claims of negligence because everyone was doing what was expected of them. However, in the real world we have what I call the ‘leaking bucket, which contains a firm’s fee income, but which drips, or floods, out the bottom because the firm and/or its employees do not take compliance seriously, which leads to profits draining out of the bucket by way of lost management time and compensation paid to resolve complaints, paying excesses and increased insurance premiums due to negligence claims, new revenue lost due to reputational damage, and high staff turnover leading to increased recruitment and training costs.

But, no matter what we do, there will always be those who don’t want to ‘buy-in’ to what we want them to do, and we must be prepared to act accordingly, even if this is showing them the door; if you make an exception for one you may as well make an exception for all!

Compliance is key to success!