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.
According to Gartner, legal and compliance leaders have four basic alternatives for dealing with unprecedented amounts of regulatory change.
To continue reading the rest of this article, please log in.
Create free account to get unlimited news articles and more!
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.
- Law firms
“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.”
“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.
- In-house staff
“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.”
- Regulatory intelligence technology
“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.”