According to Chris Webber, a partner in the London office of Squire Patton Boggs, imposing personal responsibility for financial misconduct onto GCs could be the last straw in an already 'complex and demanding' profession. The new FCA Senior Managers Regime is designed to boost individual accountability within the financial services sector, and will require senior managers to gain pre-approval from the watchdog prior to stepping into management positions. However, with the new regime slated to begin on 7 March, it is still unclear to what extent in-house lawyers will be subject to the new rules.

Brain drain

Mr Webber has argued that including lawyers in the new regime may threaten the flow of legal talent to the financial services sector. 'We would over time see a brain drain from financial institutions’ legal functions, as high-calibre lawyers start to decide the personal risks attached to regulated sector GC roles are not worth taking,' he warned. It has also been widely suggested that including lawyers within the new FCA framework would pose risks to attorney-client privilege. Source: Law Society Gazette