Senior in-house lawyers must be able to anticipate regulatory enforcement trends to help their companies avoid behaving in a way that will trigger investigations, HSBC’s chief legal officer has said.
Stuart Levey (pictured) was speaking at The Economists’ General Counsel Summit earlier this month, where he told an audience of GCs and senior legal directors that there had been an ‘upward trajectory in enforcement that shows no signs of abating’.
Lawyers, he said, need to think proactively and be aware of not only what the law is, but what direction the law is heading.
Where companies operate in multiple jurisdictions, lawyers need to have a global mindset. ‘Where it comes to financial crime, what a company does in Mexico or Singapore or the UAE is very likely to be judged by authorities elsewhere, and especially in the US or in Europe,’ he said.
‘It is a tough balancing act for a global company’s senior lawyers to manage conflicting regulations and competing investigations – one that requires a global rather than a local approach, and makes it even more important to anticipate trends and provide advice that will help keep the company out of trouble in the first place.’
Levey was optimistic that the challenges faced by senior in-house lawyers could be met, ‘so long as the top management and board foster the right culture, and chief legal officers do their part to encourage and foster lawyers who approach their roles with a broader mindset’.
Levey joined HSBC in January 2012, after spending nearly seven years at the US Treasury Department as under-secretary for terrorism and financial intelligence. Prior to that he spent three years at the US Department of Justice.
‘When I moved into the private sector, some people told me that the transition from a government job, especially one in enforcement, to the kind of role I have now would require a major shift in mindset.
‘The perception is that there is a significant gulf between being in government – where the debate is generally over what is “right”, with the objective of advancing and protecting the public interest – versus the private sector, where the goal of the enterprise is typically framed as maximising shareholder value.
‘I think for senior lawyers, especially in global companies in highly regulated industries… “is it legal?” and “is it right?” are increasingly merging into one.’
HSBC’s lawyers, Levey revealed, were assessed - as part of their performance scorecard used for end-of-year evaluations - on identifying and mitigating forward-looking legal risks faced by the bank. Regular reporting of, and governance around, these risks was also required within the legal department, he added.