Legal compliance is a complex term that refers to systems, tools and methods used by corporate legal departments that help the corporation meet best practice requirements of applicable laws specific to those corporations or businesses. Since many laws are complex, legal departments institute specific methods for compliance within the organization.
The complexity of laws is one reason many large corporations have internal legal departments to deal with compliance issues. Legal compliance overlaps with other compliance issues such as governance and risk management. The corporate financial departments must work closely with the legal department to assure compliance on all levels. It is an essential part of legal best practices to be abreast of all new and existing government laws that apply to a particular business.
In addition to compliance with the law, best practice for legal departments includes the understanding of and practice of current ethical codes for the profession. The legal department must set up all policies to maintain consistency with meeting the applicable laws. They need to be sure that corporate policies are complete according to the laws. Beyond the requirements of law, the legal department should have methods for monitoring any non-governed corporate behavior. Once the legal governance structure is in place, risk assessment and monitoring can be done effectively. The legal team works closely with other teams in the corporation, including executives.
Corporate policies must be consistent and not be contradictory to the law. They must be complete to cover all possible actions that may be included in the law. For best practice, the legal framework set up within the corporations must be broad enough to include anything allowed by law, and prohibit anything not allowed by law. Legal department policies must be used by all departments of the corporation.
There are some groups that address issues of legal compliance. The Legal GRC Center for Innovation is a membership organization devoted to legal compliance concepts. They have meetings, online forums, and a blog. Best practices for legal departments are discussed regularly. Two other organizations dealing with legal issues are the Institute On Governance, and the Association of Corporate Counsel.