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A little over a year ago, the Department of Justice released the Yates Memo, named after its author, Deputy Attorney General Sally Quillian Yates. That memo set out a new approach for the DOJ: when companies do wrong, individuals will be held accountable.
That's great news if you're part of the "tough on corporate crime" camp. It's less exciting if you're a corporate lawyer or chief compliance officer who could be held personally liable for your company's failings. A recent survey shows that the vast majority of in-house counsel and CCOs are worried about personal liability following the Yates Memo and almost two-thirds of in-house attorneys and CCOs are less likely to remain in their position as a result.
Yates Memo Strikes Fear in Corporate Officers
DLA Piper's first-ever compliance and risk report recently surveyed CCOs and in-house attorneys and the results are, well, pretty surprising. The Yates Memo and increased scrutiny by both the DOJ and SEC are having major impacts on how CCOs and in-house attorneys feel about their jobs.
Eighty percent of respondents were at least somewhat concerned "about the change in tone and tactics from Washington," according to DLA Piper. Ninety-one percent (in other words, pretty much everyone) expected greater scrutiny from the feds now that Hui Chen had joined the DOJ's Fraud Section. Chen became the first attorney to fill the Justice Department's controversial compliance counsel position last year.
"Do You Really Need This Kind of Risk?"
But what's really surprising is how many CCOs and in-house lawyers might be considering new careers following the Yates Memo. Sixty-five percent of respondents might hesitate to stay in their current position or accept new ones as a result of the recent changes in Washington, DC.
And while corporate counsel's head is increasingly on the chopping block, many of those officers and attorneys don't feel adequately supported. Most respondents had not updated their compliance programs following the Yates Memo, and only a third of CCOs and in-house attorneys felt they had the resources needed to do their jobs.
A loss of compliance professionals could make compliance even more difficult. As the survey's executive summary notes:
The tension between heightened personal liability and stunted resources could have multiple negative implications for the compliance industry. It could drain the industry's talent pool, for instance, acting as a deterrent for early-to-mid career professionals. "If you have another 25 years to work, do you really need this kind of risk?" one experienced compliance officer told us.
Meanwhile, Washington has given no indication that it's interested in backing off its new, harder line approach to corporate accountability.
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