Chief Legal Officer vs. General Counsel: Compliance Roles in Healthcare
Healthcare compliance is complicated enough without constant confusion about specific roles and responsibilities. But many organizations still struggle to make sense of the difference between Chief Legal Officer and Legal Counsel – leading to a lack of clear accountability within the department.
This article clearly defines these two roles and explains the separate but vital part each plays in an effective compliance program.
Chief Legal Officer vs. General Counsel: What’s the Difference?
While General Counsel (GC) and Chief Legal Officer (CLO) both involve overseeing legal matters within a company, their roles differ in focus and scope:
- The General Counsel typically manages the day-to-day legal operations, such as handling contracts, compliance, litigation, and regulatory issues. They act as the primary legal advisor to the company, ensuring it operates within the law.
- The Chief Legal Officer has a broader, more strategic role that aligns legal strategy with the company’s overall business goals. As a member of the executive team, the CLO not only oversees the legal department but also plays a key role in high-level decision-making, risk management, corporate governance, and long-term planning.
So, while the GC focuses on operational legal tasks, the CLO takes a proactive, big-picture approach to anticipate legal risks and shape strategies that drive the company forward.
How Do the Roles Interact?
The two roles can vary somewhat between companies, with smaller companies often combining these roles. But there is a strong historical precedent wherein the CLO tends to hold a more senior position with greater strategic influence.
In 2010, the Department of Health and Human Services (HHS), Office of Inspector General (OIG), and American Health Lawyers Association (AHLA) published a joint study that found that one-quarter of the surveyed healthcare organizations had their compliance function under the authority of their Legal Counsel. This aligns with other findings:
- In a 2012 survey, the Society of Corporate Compliance and Ethics (SCCE) and the Health Care Compliance Association (HCCA) found that 15 percent reported both functions under Legal Counsel.
- The 2020 SAI Global Healthcare Compliance Benchmark Survey (Survey), developed with and analyzed by Strategic Management, found that 15 percent of respondents reported that their Compliance Office function was part of Legal Counsel’s responsibilities.
- Elsewhere in the Survey, 15 percent of respondents indicated that they have the Compliance Officer reporting to Legal Counsel.
But this is no longer an acceptable practice – and healthcare organizations must resolve the issue immediately.
The OIG’s Guidance on Compliance and Legal
The OIG recently issued its long-awaited new “General Compliance Program Guidance.” This 91-page document provides updated Guidance built off decades of experience. Among key points is the clear statement concerning Compliance Officer reporting structures. The Guidance states, “the compliance officer should not lead or report to the entity’s legal or financial functions, and should not provide the entity with legal or financial advice or supervise anyone who does. The compliance officer should report directly to the CEO or the board.”
The OIG has long held that the compliance function should not be subordinate to Legal Counsel or the CFO, as stated in the Compliance Program Guidance for Hospitals. The DOJ and OIG have maintained the view that Legal Counsel is an advocate for the organization, protecting its interests, and not an independent gatherer of facts and evidence who voluntarily discloses violations of law and regulation to appropriate authorities.
They have also often encountered Legal Counsel attempting to put information under privilege to avoid full disclosure. Corporate Integrity Agreements (CIAs) reinforced the OIG’s position regarding Legal Counsel’s involvement with compliance. They included standard language: “The Compliance Officer shall be a member of senior management…and shall not be or be subordinate to the General Counsel or Chief Financial Officer.”
The takeaway? Organizations with Compliance Officers reporting through or to Legal Counsel or other executives will be considered outside the acceptable standard.
Why Compliance Must Never “Report” to Legal
To carry out their official function, compliance officers must provide independent oversight and mitigate potential non-compliance risks. As such, they must keep leadership and the Board aware of issues and ensure that identified potential weaknesses are properly addressed.
When the Legal Counsel assumes a dual role of providing legal counseling and overseeing the Compliance Program, it limits the range of viewpoints concerning compliance-related issues. However, the OIG recognizes that Legal Counsel can play a critical role in supporting an organization’s compliance program.
The OIG stresses the importance of Legal Counsel in coordinating with the Compliance Officer, as needed and upon receipt of reports or reasonable indications of suspected non-compliance, to promptly investigate and determine whether a material violation of applicable law has occurred.
Fix Your Compliance Issues with Strategic Management Services
For organizations with the Compliance Officer subordinate to Legal Counsel, executive leadership and the Board should be informed that this is a questionable practice and should be reviewed. Strategic Management Services (SMS) can help you undertake this process, revise your policies, and ensure your compliance and legal programs are fully aligned with the OIG’s guidance.
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