We can see that even if for some years now many French and international companies have been giving more and more importance to legal departments. Some departments still suffer from a lack of recognition mainly due to a lack of knowledge of their work.
The legal function in French companies can be found under various structural models.
Perimeter of the legal management and compliance.
The most accomplished is the legal department, which is organized and hierarchically structured around a real manager. He is a member of the management committee, who takes part in strategic decisions
But let’s make no mistake, only half of the legal directors are in this case. Even if this figure is increasing, we are still far from having the same consideration as a commercial or financial director. Then we find a more classic form, the legal department under the responsibility of a senior lawyer. Supervising a small team and sometimes only assisted by an assistant, he is usually attached to the financial management and reports directly to the CFO. Finally, the most minimalist form is the single lawyer, who, depending on the size of the company, will report directly to the CEO, but often to the CFO. The latter is often justified in the case of small SMEs.
The legal function in the company has inherited a structure stigmatized by the image that the general management has of it and by the role that is in fact attributed to them.
It is a support function that has to answer legal questions. Reduced to contracts, litigation and legal secretarial work for the most part. Issues related to strategic decisions and external growth are generally handled by external counsel. With the legal counsel acting as a relay in the best of cases, but perhaps “legal privilege” has a lot to do with this. Regarding the handling of litigation for which the lawyer/legal counsel duo is inseparable. Notwithstanding, we can easily understand why most legal services have a very light structure and why they are attached to a department that often has difficulty in managing their constraints and needs.
Fortunately, this mentality tends to disappear, thanks to the opening of the international market and the confrontation of our companies with foreign models, where the “legal” is a predominant element. On the other hand, the issues of “compliance” mean that strategic decisions can no longer ignore the legal component.
The need to set up an internal and, above all, efficient legal structure.
It is essential, and should be remembered that the lawyer has the company’s knowledge of its issues and its needs, External counsel can only, despite all its qualities, grasp through the data provided.
This structure must be able to “protect” the interests of the group but above all to participate in its development, in fact, having a legal department present on the board of directors is a minimum.
This brings us to what we can call the extended legal structure. In fact “compliance” shows that the law is transversal because compliance affects all the departments of a company. If the role of the legal department is to supervise this compliance through processes and audits. It is not useless to finally group under its guidance all the departments initially devoted to the same work. For example, we can mention health and safety, real estate, insurance, etc.., but many other possibilities exist, each company being unique.
In recent years, compliance has become an important issue within companies. Regulators are more and more vigilant in enforcing the compliance rules that govern economic operations.
A recent professionalization
First of all, compliance is a matter for experienced lawyers. In fact, 92% of them have a legal background or hold a Capa degree. 75% of them have more than eight years’ experience, and more than fifteen for half of them. It should be noted, however, that the number of years of experience in compliance matters themselves amounts to a maximum of eight years, as this area has only recently professionalized.
Compliance professionals report to a high level of management. Even though issues may be managed jointly by several departments. They are mainly handled by the legal and compliance department (59%), but also by general management (19%) and the compliance management (17%).
In medium-sized companies, it is essential that the person dedicated to compliance has a direct reporting relationship with the management.
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