Crowe regulatory response and legal consulting specialists have successfully collaborated many times with law firms to guide financial services clients through regulatory enforcement actions.
A successful collaboration typically involves the following four steps:
Law firms and consulting teams must work together to pore through the enforcement action, understand the main issues, and identify any specific remediation and reporting requirements called out in the action. This process can involve reviewing relevant documentation, interviewing key stakeholders, and analyzing data.
Based on the assessment, consultants and law firms can work together to develop a thoughtful, comprehensive strategy to address the enforcement action point by point.
A complete strategy might involve developing a remediation or validation plan, outlining communication procedures, fixing regulatory deficiencies through changes to policies, procedures, and controls, and implementing process improvements.
With a detailed strategy in place, the consulting team and law firm can execute the plan. Execution often requires training for staff, implementation of new processes, and collaboration with regulatory agencies to address any outstanding issues.
Success depends on having the right people in place who have the breadth and depth of expertise to address specific issues called out in the enforcement action. To get those people in place, the consulting team might need to help the organization develop a flexible staffing plan that includes temporary outside resources.
Responding to an enforcement action is like building a watch. It’s a delicate, detailed process with a lot of moving parts. To make sure everything keeps working as intended, it’s vital to monitor progress and verify the effectiveness of management’s corrective actions.
Consultants can make monitoring easier by providing thorough and timely validation support throughout the process. Law firms and consulting teams can work together to verify that the remediation strategy is implemented effectively and in a timely fashion, that the financial services organization remains compliant with relevant laws and regulations, and that corrective actions put into place to address deficiencies are sustainable.
Most regulatory enforcement actions require some input from a financial services consultants. But not every interaction between a law firm and a consulting team translates to a true collaboration that benefits the law firm’s client.
Law firms that want to engage in a truly collaborative process and provide the best experience for their client should look for a consulting team that brings the following elements to the table:
Together, law firms and consulting teams can help lift the stress of a regulatory enforcement action, take the uncertainty out of the remediation process, and strengthen the client’s processes so that future enforcement actions are less likely.
Our legal consulting and regulatory response specialists have collaborated with law firms and general counsel many times to help financial services companies of all sizes independently test and validate regulatory enforcement actions.
When your client needs help, don’t wait – get in touch and let’s talk.
For attorneys and law firms that work with clients in the financial services industry, a client receiving a consent order or other regulatory enforcement action can be a nightmare scenario.
Under a regulatory enforcement action, regulatory agencies have a variety of tools at their disposal to mandate compliance, none of which amount to an enjoyable experience for a financial services organization. The organization could face fines, sanctions, and legal action, not to mention reputational impacts and the pain of being frozen out from strategic activities, such as mergers and acquisitions.
If your law firm represents a financial services client or if you serve as in-house general counsel for one and the client faces this situation, you can expect to be the their first call. Financial services organizations know they need support and legal protection – but legal representation alone usually won’t be enough to guide the organization through a consent order or similar enforcement action.
That’s where an experienced financial services consulting team can step in and bridge the gaps. The right consultants can provide crucial banking regulatory expertise, project management experience, and hands-on support that can help the organization fix issues and validate that the work was performed in accordance with regulatory expectations.