What Is a Legal Register?
The legal register is a fundamental concept to understand when providing compliance management services. The most basic definition of a legal register is that it is a list of relevant legislation, its details and how it relates to an organization. Thus, it serves a basic purpose in keeping track of the laws that are applicable to an organization.
However, a legal register can serve a purpose beyond being simply a list of statutes and regulations . It can, for instance, include other information about relevant legislation such as:
This additional information adds value to the legal register as it becomes a more useful tool for compliance management in that you have not only a list of the relevant legislation, but a tool to both quickly access the legislation and to see the impact of a change in legislation. For example, you may discover that changing definitions in legislation can have downstream effects on several policies in your company.
Legal Register Components
A legal register will contain different components depending on its purpose and the scope of the property and the governing regulations. By way of example, and for purposes of illustration only, a legal register may contain the following components: Laws – Federal, state and local laws such as the Clean Water Act, Clean Air Act, Superfund etc. will be included in the legal register. All subsidiaries that are subject to federal, state, tribal, and local laws must be identified. Regulations – Similar to laws, federal, state and local regulations such as NPDES regulations and permitting requirements should be identified in the legal register and their linkage to the governing law. Standards – Specific standards to implement laws and regulations may need to be identified in the legal register such as emission and discharge limits, waste characterization and waste distribution standards. Compliance Requirements – Some laws and regulations may require obtaining permits, authorizations, and approvals. Identifying the applicability of the permits, authorizations and approvals provides the information required to create the compliance and regulatory calendars which tracks and schedules permit application dates, deadlines and submittal dates.
Significance of a Legal Register
For organizations, the legal register is not just a resource directory; it’s a roadmap to maintaining compliance and mitigating legal risks. Ensuring compliance with existing laws and regulations is a primary function of a legal register. Moreover, it’s a forward-looking document that aims to identify applicable obligations and regulations that are on the horizon; thereby, the organization can plan accordingly. A robust legal register will also provide the basis for an action list which will address any new obligations or regulatory compliance that must be factored into existing risk management strategies. You can plan for compliance and avoid or mitigate legal risks only if you know what they are.
Creating a Legal Register
The process of creating a comprehensive legal register for a business or organization typically follows a systematic approach. Initially, a business should undertake a detailed scoping exercise to identify and understand the specific legal requirements relevant to its operations. A cross-functional team including members from different departments such as legal, compliance, audit, risk management, and sustainability is often the best way to go about this. Engaging in discussions and internal workshops can help in identifying any current uncertainties on what legal registrations exist for the business, and what legal updates need to be monitored.
The next step is drafting legal clauses for incorporation into contracts with service providers and suppliers, if not already in place. Further, it is recommended that any outsourcing of direct responsibilities for compliance with laws and standards is reviewed. For instance, suppliers may provide assistance in certain areas but any final responsibility for compliance should be retained by the business and not transferred inappropriately to a third-party.
The next stage focuses on actually registering relevant requirements by creating an action plan and working through any identified actions. Here, the business should pay particular attention to lessons learned from previous audits, and consider global best practice approaches to raising awareness of legal requirements. This process can enhance the effectiveness of subsequent monitoring mechanisms.
The next stage is a mandatory requirement to review the register regularly, and update where necessary. This process helps to ensure that no gaps are created in implementing the business’s obligations. When updates do need to be implemented, they should be communicated to relevant stakeholders within the business and, if necessary, actioned.
Above all, the legal register should be used as a tool to assist with due diligence and compliance across the business. At every level, the register needs to be understood, maintained, kept up-to-date and, where necessary, used as the basis for processes running across the business. This is true at all levels of decision-making and for all functions and work streams, from the board, senior management and leadership teams, to the day-to-day front line businesses and functions.
It is highly recommended that a system is in place to collect and act on employee feedback on the legal register to assist with continuous improvements. Such feedback is imperative, as it will allow the business to invest time and resources where it will make the most difference, and help with efficiency in the administration of the legal register.
Preparing and Maintaining a Legal Register
Establishing best practices for maintaining and updating a legal register can help minimize negative externalities from having an incomplete or outdated Register.
Identifying and Tracking Regulatory Changes
Technology and the growth of social media have made it increasingly easy to track regulatory changes. One of the best ways to stay current with upcoming regulatory deadlines (such as those imposed under the FFRA and FFDCA) is to sign up for alerts from government and agency websites, like those at the FDA and CGS. The ability of industry trade groups to issue timely, accurate newsletters has also become invaluable. For example, the U.S. Food and Drug Administration Group on LinkedIn is free and can keep you up to date on regulatory news from the FDA and other members.
Integrating Cross-Functional Input
To maintain an effective legal register, companies should use cross-functional input, which can prove invaluable in ensuring greater depth and accuracy . Input from multiple departments, including Facilities, HR, Accounting, and Marketing can provide a detailed view of how your products operate in the real world, facilitating validation of your legal register and review of the planned regulatory due diligence.
Engagement of Internal Stakeholders and Legal Counsel
Regularly schedule your legal register updates internally with different departments. Using agendas, action items, and status updates to record progress toward maintaining an accurate legal register will help ensure that the proper stakeholders supply the corporate information needed to keep it current. Verification of changes with legal counsel can also help instill confidence that important deadlines are not missed.
Reporting
Leading practices for ERP systems with regard to maintaining a legal register should be accompanied by reporting requirements. This includes ensuring mandated compliance reports are submitted in a timely fashion to avoid fines and penalties; each department or business unit should be responsible for compliance verification and follow up. Compiling these reports are also good practice to ensure any material misstatements are caught early and remediated.
Challenges in Legal Register Management
The process of keeping the legal register up to date can be time-consuming and prone to human error. For large organizations, especially those that operate internationally, the number of proposed and existing statutes can become unwieldy. Not only do such organizations have to keep track of their obligations at a high level, but they must also fully understand how these obligations impact specific aspects of their operations and what remedial measures must be taken to comply with the relevant laws.
Such difficulties are compounded by the fact that most legal issues are not static; they are constantly evolving. New laws are passed and signed, amended or repealed, and even existing laws and standards are under continual revision as society changes. Internally, organizations grow or downsize and go through mergers, acquisitions, restructuring or divestitures; any of these changes may require a review or update of the legal register.
All of the various elements impact the adequacy of a legal register. Organizations that do not devote sufficient resources to maintaining a current and accurate legal register may face unexpected liability or other legal troubles.
Cases When Legal Registers Are Useful
The following case studies offer insights into how various organizations effectively use a legal register to identify compliance needs and organize forms and clauses:
Accis Technologies: The Automotive Division of Accis Technologies identifies laws and regulations relevant to its products, services, and business operations by using a legal register. Its legal register is organized into three sections:
Accis Technologies: The Company-Wide Process
Accis Technologies: The Automotive Process
Accis Technologies: The IT Asset Process
Bell Canada: Bell Canada uses a Microsoft Access database as its compliance register. The database tracks relevant laws and regulations, identifies gaps, and answers the question "Where do I need to be?" In addition, it provides a searchable database for users to find laws they did not know applied to their area. Bell Canada’s Compliance Office monitors the compliance register and the company’s regulatory framework. It brings issues to the executive compliance committee or executive regulatory committee, which both report directly to the CEO. Bell Canada also uses Sharepoint to keep track of all policies and procedures, and has implemented monthly reports from its lawyers so that the company is aware of any upcoming changes in regulations.
Programmed Electrical Industries (PEI): PEI created a legal register template to proactively identify regulatory requirements. The legal register template was created by PEI’s legal counsel and tailored to PEI’s business. Further, the creation of this legal register template ensured that PEI’s legal counsel understand PEI’s business, and that PEI understands the requirements of its counsel. PEI created a combined legal register for both environmental and health and safety laws. The legal register contains 41 regulatory sections divided into Australian federal regulations and New South Wales state laws. For each section, the register identifies relevant laws that may be level 1 or level 2 (level 3 refers to those laws PEI has chosen to comply with voluntarily). For each law, the register identifies the relevant department, a description of the law, PEI’s obligations, and PEI’s compliance with that law. PEI’s legal register template will be updated every two years.
Software and Tools for Legal Registers
As with other management processes, there is now a range of tools and software available to help those responsible for legal registers. Some will be familiar, others unique to this specific area. With this dedicated process, the software tools used for quality management systems may not yet have caught up to the unique requirements of legal registers, so it’s worth looking at what’s available.
Existing legal register software will have the framework required for the specific management of legal compliance. Create and maintain a dedicated, in-house register for each organisation, or for all group companies, if that’s more efficient. Track changes to the register, including review dates, compliance status, and the details of those responsible for compliance. Where the organisation has compliance obligations in multiple jurisdictions , the legal register software will provide dedicated registers for each jurisdiction, helping the team keep track of all obligations across divisions and group companies. Information will be clearly supported by a series of comprehensive overviews and reports which the software can generate.
Many ISO-certified companies are using their existing software for QMS to extend into legal register software, taking advantage of existing supplier relationships to reduce both costs and training time. Some with entirely bespoke systems are migrating to the dedicated software that can be easily adapted to fit in with their existing processes. This reduces the administration required for regular updates, and eases the burden of compliance or certification audits.