At the heart of the report is the surprising discovery that legal professionals have not only adapted to but have enthusiastically embraced new hybrid office attendance policies. This pivot marks a stark contrast to the initial apprehension surrounding many firms’ planned return-to-office mandates, which many feared would rigidly tether employees to traditional in-office schedules. Instead, a flexible hybrid approach has emerged as the preferred model, striking a delicate balance between office presence and remote work.

The survey, conducted between December 2023 and January 2024, gathered responses from 350 legal professionals working at large US law firms. Almost all (97%) of the respondents were full-time workers, and almost three-quarters (73%) were lawyers of various classes.The survey reveals a broad consensus among legal professionals in favor of these flexible arrangements. A notable majority (57%) expressed outright satisfaction with these new policies, while a minority (29%) said they feel at least neutral about the policies. The report also highlights that those respondents registering dissatisfaction with the policies are most commonly among those legal professionals subjected to less-flexible policies, suggesting a direct correlation between policy flexibility and employee satisfaction.

Despite the warm reception to hybrid work, the anticipated productivity and collaboration benefits of increased office attendance remain elusive. The report challenges the notion that mere physical presence in the office leads to enhanced productivity and collaboration, as the findings indicate mixed outcomes, with no definitive evidence that returning to the office has significantly boosted productivity levels. Further, the objective of fostering better collaboration and mentorship through more frequent in-office interactions seems to have fallen short as well, especially as senior lawyers often benefit from greater work-from-home flexibility.

These nuanced findings extend to the impact of office attendance policies on firm performance and employee retention. High levels of satisfaction with these policies generally correlate with a positive outlook on job retention; however, a minority of legal professionals express dissatisfaction, primarily those from firms with stringent attendance policies. This discontent could potentially influence their decision to remain with their firm, underscoring the critical balance firms must strike in implementing these policies.

Those respondents registering dissatisfaction with the policies are most commonly among those legal professionals subjected to less-flexible policies, suggesting a direct correlation between policy flexibility and employee satisfaction.

The report also critiques the one-size-fits-all approach to office attendance, advocating for a more tailored strategy that considers the diverse needs and preferences within the legal profession and among individual law firms as well.

As law firms evolve in their response to the shifting paradigms of the legal industry, the 2024 Law Firm Office Attendance Policies Report serves as a pivotal reference point, capturing a moment in time when the legal sector stands at the crossroads of tradition and innovation, while navigating through the complexities of a rapidly changing work environment.

The insights garnered from this comprehensive survey not only reflect the current state of law firm office attendance but also illuminate the path forward, highlighting the importance of adaptability, understanding, and strategic flexibility in shaping the future of legal work.

You can download a complimentary copy of the Thomson Reuters Institute’s “2024 Law Firm Office Attendance Policies Report” by filling out the form below:

As a result, visibility into supply chain actions and outcomes has catapulted to the top of many corporate wish lists — but many business leaders become frustrated when their operations and technologies don’t deliver. Still, experts say, better visibility into corporate supply chains can be achieved, but only if companies are willing to think about their sustainable supply chain initiatives in a more innovative way.

According to a September on sustainable supply chains, visibility has become one of the top priorities among supply chain leaders. Of the 525 large corporations surveyed, 58% said that increased end-to-end visibility in their supply chain was among their top two priorities in both the past two years and the upcoming two years. However, despite that desire, just 37% of supply chain leaders reported achieving supply chain visibility over the past two years, indicating a large gap between the desire for more visibility and the progress many organizations are practically achieving.

Rae-Anne Alves, ESG & Sustainability Supply Chain Leader at EY Americas and co-author of the report, said that visibility is the key first step to compliance. “When companies are thinking through their supply chain and trying to make it more sustainable, they need end-to-end visibility to know is what is happening,” Alves said. “Companies are lacking the transparency that they need from their suppliers through logistics, especially in areas outside of their four walls.  Achieving this transparency will give them the visibility they need across their supply chain.”

Recent research from the ¶¶ŇőłÉÄę’ Market Research & Competitive Insights team mirrored these findings. In interviews conducted with senior leaders of US-based companies charged with tracking ESG efforts, large numbers of companies say they have established dedicated ESG efforts but collecting data and measuring those efforts remains disconnected and lacks consistency.

The issues in raising visibility

When it comes to trying to raise the visibility of supply chain practices and outcomes, many corporate leaders have run into an unfortunate reality: the difficulty of gathering and mingling data that lives in disparate systems. One public company ESG head explained that a common supply chain review pulls data from systems as broad as risk management and operations software, human resources software, and procurement and supplier-oriented software.

Combining all of these types of data into one truth remains difficult. “I don’t even know how they collect their data,” said the supply chain head of another public company. “Every vendor has their own process.”

This problem is only increasing as companies are beginning to scale up the types of data that they collect, EY’s Alves added. To take a firmer grasp on their supply chain, many companies are looking to catalog not only emissions from scope 1 (directly owned by the company) and scope 2 (indirect use of energy the company purchases), but increasingly scope 3 emissions that result both up and down the company’s value chain as well. Indeed, the more a company’s data collection scope expands, the more complex the visibility question becomes. Many supply chain-centric software providers have arisen in recent years to try and compile and display all of these data sources, however, currently, there is not a leader that has captured a substantial share of the market.

Some companies have been able to achieve more supply chain visibility, becoming sustainable supply chain “trailblazers” with an “extreme focus on transparency”

“It’s unclear yet whether there will be a provider that is able to deliver the end-to-end capability needed for a digitally network-connected supply chain,” explained Gaurav Malhotra, Partner and Americas Supply Chain Technology Leader at EY. “There are many factors that have to come together, versus just a singular platform from a control tower or visibility standpoint to enable the orchestration.”

Instead, many companies have tried to apply other technological fixes to the issue, often without much success. “Almost everything is run on Excel. It’s truly terrible,” a public company’s supply chain head told Thomson Reuters Institute. “We have very few tools for environmental stuff. Everything is reported through Excel, everything is measured in Excel, everything is rolled up in Excel and it’s extremely inefficient because we have all these different teams.”

Supplying more visibility

Still, some companies have been able to achieve more supply chain visibility. EY’s report designated certain companies as sustainable supply chain “trailblazers” and noted that one of the traits they have in common is an “extreme focus on transparency” through which “[t]hey can significantly or moderately peer into Tier 2 and 3 supply networks.”

EY’s Malhotra said these leaders often undertake two simultaneous shifts to aid this transparency. One involves automating individual supply chain functions so that they can run more efficiently and be consistently reliable. The second involves integrating those individual functions and making sure their output data is portable to enable the needed effective real-time communication, both internally and with external supply chain ecosystem partners.

Currently, he explained, most supply chain networks are “not digitally integrated in their true sense” because they operate in multiple stages. Data is processed by one organization that controls their section of the supply chain ecosystem, then it is transmitted to be able to be consumed or processed by other organizations. While Malhotra concedes that it takes “time and effort to ultimately get to a mostly autonomous state,” he believes combining, integrating, and automating these steps will be the future of supply chain management.

“What we have found is that some leading companies have moved towards an integrated process and singular platform that allows the right level of visibility, orchestration and actioning with their supply chain network partners,” Malhotra said. “Enabling trust, effective execution and accountability with the overall network in play, resulting in a highly efficient, highly integrated, differentiated and reliable supply chain.”

Leading companies are also pushing for data standardization among common supply chain suppliers, Alves added. Many sustainability frameworks are available, and increased regulatory attention continues to add more complexity. Increased standardization can make supply chain data more actionable, and auditable, potentially lowering a company’s risk profile. When asked about top supply chain priorities for the coming year, the ESG head of one public company was clear: “We want to make sure that we have auditable processes in place, that the data is sound.”

However, Alves added that for sustainable supply chain measurement and reporting businesses are “definitely not there yet.” As both public and regulatory attention in the space continue, expect that visualization into supply chain processes and data will become even more important, and leading organizations will continue to invest resources and personnel to get their supply chain data house in order.

This has allowed courts, litigants, and others to recreate the environment of a face-to-face court proceeding, with the added benefit of efficiency for all and improved access to justice for citizens.

Key considerations for courts

Of course, there are several key considerations that courts need to address as they continue to pivot towards conducting proceedings remotely.

What does a fully remote or hybrid proceeding entail?

In a remote proceeding, the judge, attorneys, clients, witnesses, and other participants can appear from multiple locations. By contrast, a hybrid proceeding involves some participants — often a witness — appearing remotely, while others are present in the courtroom with the judge. In either of these proceeding types, participants must have access to the specific remote technology used by the court, which frequently involves Zoom videoconferencing. While videoconferencing typically serves as a primary method for conducting a remote proceeding, a telephone backup ensures that the proceeding can continue to take place even if technical difficulties arise.

Courts may utilize different features for the videoconferencing platform as well. For example, one of Zoom’s standard features involves a private breakout room, which allows attorneys and their clients to privately communicate with each other through the Zoom platform. However, Idaho state courts disabled Zoom’s private chat feature for participants and instead require them to communicate outside of Zoom, such as by telephone.

The judge and court staff remain in control over a remote proceeding and, for example, can employ the mute feature to silence any disruptive participants.

How do the courts determine which proceedings will occur remotely?

Concurrent with rolling back orders and directives governing the pandemic, several courts have established procedures, orders, and rules addressing the specific circumstances for remote and hybrid proceedings. These proceedings vary among state and federal courts and the type of court proceeding.

What are advantages to remote proceedings?

Remote proceedings help limit litigation costs, by eliminating attorneys’ travel time and any waiting time at the courthouse. Remote proceedings also allow a party to present testimony from witnesses who may not be able to attend in person. For example, a key witness may be unable to attend in person because of their location, financial condition, or health, yet the witness may be able to participate remotely.

Courts usually can handle many matters remotely with the same effectiveness as in-person proceedings, such as holding status conferences or motion hearings that may involve non-evidentiary or procedural matters. Remote proceedings also provide flexibility for courts in scheduling proceedings when an in-person proceeding is impossible, because of a lack of available courtrooms, for example. Remote proceedings also promote public access to the courts by allowing additional viewing through livestream or recordings.

What are disadvantages to remote proceedings?

Remote proceedings may not be an effective substitute for an in-person proceeding, however. Assessing the effectiveness and credibility of a testimony requires being able to observe a witness’s demeanor, which may be impossible, limited, or even appear unnatural when captured by camera in a remote setting. Likewise, presenting exhibits can involve unique problems in a remote proceedings, requiring an ability to use the “share screen” feature and multi-tasking between sharing or reviewing displayed exhibits. If a problem arises, the effectiveness of testimony exhibits may be lost, especially if participants are forced to use a dial-in number or hold exhibits up to the camera.

Remote proceedings also restrict the ability for counsel to confer with their clients in confidence. During a proceeding, counsel and their clients oftentimes communicate by whispering or passing notes. However, a remote proceeding requires having an ability to communicate through a breakout room, texting, or otherwise, but without the appearance of distraction or improper coaching.

Further, a remote proceeding requires that the participants have technical capacity and competency. This includes having a reliable internet connection, a compatible computer, familiarity with the videoconferencing platform, and a backup plan — such as a smartphone app or dial-in number — if connectivity issues arise.

What safeguards are necessary for remote proceedings?

As with in-person proceedings, remote proceedings must comply with applicable procedural requirements, including any constitutional and statutory rights, such as constitutional due process. Additional safeguards may be necessary so that participants can have an ability to meaningfully participate, including if a participant (especially a self-represented party) cannot use a videoconferencing platform.

As a result, courts may need to facilitate access to remote proceedings by providing instructions, verifying the ability of litigants to participate, having a backup if technology fails, or holding a proceeding in-person when all else fails. Indeed, many courts, such as the , provide detailed guidance for using Zoom, while others, like the Massachusetts Trial Courts, provide to accommodate litigants.

You can find out more about here.

In addition to criminal investigations, there have been civil investigations involving 1,800 individuals and entities for alleged misconduct in connection with pandemic relief loans totaling more than $6 billion. The three strike force teams will operate out of US Attorney’s offices in the Southern District of Florida, the District of Maryland, and in a joint effort between the Central and Eastern Districts of California.

AG Garland established the COVID-19 Fraud Enforcement Task Force in May 2021, to better coordinate resources between the DOJ and other “agencies across government to enhance efforts to combat and prevent pandemic-related fraud.” The DOJ has worked closely with law enforcement partners to “analyze the extraordinary amount of data” from the states and the Small Business Administration, which administered several major pandemic loan programs. This data analysis has been the “key to identifying and prosecuting the organized criminal groups and networks of overseas fraudsters who stole pandemic relief funds.”

The DOJ efforts to combat COVID-19-related fraud schemes include investigations involving the Paycheck Protections Program, Economic Injury Disaster Loan program, Unemployment Insurance programs and COVID-19 healthcare fraud enforcement.

Pandemic fraud enforcement highlights

Within days of announcing the three new strike force teams, the DOJ announced federal criminal charges against “47 defendants for their alleged roles in a $250 million fraud scheme that exploited the federally-funded child nutrition program” during the pandemic. According to the allegations, employees of a nonprofit organization participating in the federal child nutrition program to open more than 200 program sites throughout Minnesota. These sites then “fraudulently claimed to be serving meals to thousands of children a day within just weeks of being formed.” The defendants created “dozens of shell companies” to enroll as program sites and also used shell companies to launder proceeds from the scheme. As a result, the defendants allegedly “obtained, misappropriated, and laundered millions of dollars that were intended as reimbursements for the cost of serving meals to children.”

In another incident, the DOJ filed a civil injunction suit in May to from preparing federal income tax returns for others. According to the suit, the “tax return preparers prepared more than 1,300 returns in 2021 and over 3,100 returns in 2022” that “falsely claimed over $53 million in credits and refunds intended to provide COVID-19-related relief for self-employed individuals.” In addition to the permanent bar, the suit requests that the court require the defendants to disgorge the fees the obtained by preparing false and fraudulent tax returns.

In April, the DOJ also announced a coordinated law enforcement action on . In the action, the DOJ brought criminal charges against 21 defendants for their roles in healthcare “fraud schemes that exploited the COVID-19 pandemic” and resulted in $149 million in false billings to federal programs and theft from federally funded pandemic assistance programs. The schemes involved offering COVID-19 testing to “induce patients to provide their personal identifying information and saliva or blood sample.” That information was then used to submit false claims to Medicare for “unrelated, medically unnecessary, and far more expensive tests or services.”

Another scheme exploited telehealth policies intended to increase access to healthcare during the pandemic by “billing for sham telemedicine encounters.” The DOJ also brought charges against two defendants for misappropriations of Provider Relief Fund monies and charges involving fake COVID-19 vaccination record cards.

A May 2021 enforcement action resulted in criminal charges involved in similar schemes with losses exceeding $143 million. In addition to the criminal charges, the Centers for Medicare & Medicaid Services (CMS) announced adverse administrative actions against more than 50 medical providers for their roles in healthcare fraud schemes related to COVID-19 or the “abuse of CMS programs” that were intended to increase access to care during the pandemic.

Additionally, just in the last few months, several individuals have been prosecuted for their efforts to defraud the Paycheck Protection Program (PPP), including:

• • • A Southern California man who was in prison in July for submitting fraudulent applications for money from the PPP, submitting false statements to a financial institution, and money laundering. He submitted 27 loan applications to four banks on behalf of eight companies he owned, seeking $27 million in PPP loans.
    • Two Florida men were sentenced in May for “leading a ” the PPP for millions of dollars. Both men pleaded guilty to conspiracy to commit wire fraud. One of the men “submitted or facilitated at least 79 fraudulent loan applications worth at least $35 million.” The other man was “responsible for at least 34 fraudulent loan applications worth at least $15 million.”
    • In April, an Oklahoma woman pleaded guilty for a scheme to defraud the PPP of more than $43.8 million. She admitted to conspiring to submit at least on behalf of at least 111 entities. The entities received approximately $32.5 million in PPP funds through the fraudulent applications, and she personally received at least $1.7 million.

Although the impact of the pandemic itself appears to be lessening, the impact of COVID-19-related fraud likely will continue for years to come.

Couple this with catastrophic climate events and political upheaval, and you have multinational companies scrambling to devise strategies to minimize the impact of these disruptions.

To further examine this situation, ¶¶ŇőłÉÄę’ first annual Corporate Global Trade Survey Report takes a look at the real-world factors affecting global trade executives and managers today. For the report, we surveyed more than 200 global trade professionals around the world to find how the current trade environment is affecting their business, what specific challenges they face, and how they are using technology to meet these challenges.

Responses to the survey were separated into four regions — the United States, the European Union and the United Kingdom, Latin-America, and the Asia-Pacific region — with more than half of survey respondents being upper-level executives at the director level or higher.

Technology is one of the common denominators in all of the issues facing global trade managers — so much so that 81% of respondents agreed that the solution to rapidly changing customs environments lay in adopting more capable global trade technologies.

What aspects of global trade concern these executives the most? Among the top responses cited, were:

• • • • regulatory changes;
      • new agencies, rules, and policies;
      • tariffs and sanctions;
      • supply-chain snarls;
      • rapid technological change;
      • risk management; and
      • the need for skilled talent.

Themes of the Global Trade Report

In addition to specific data from each major trade region, the report explores three major themes that are currently affecting multinational corporations involved in global trade:

1. 1. 1. Political upheaval and the accompanying supply-chain uncertainty are forcing companies to pay much closer attention to the integrity and resiliency of existing supply chains and the availability of resources.
      2. Both governments and companies are adopting more sophisticated digital systems and processes to streamline and simplify tax and trade operations; however, more than half of the companies surveyed said they were behind the curve technologically and are still working to catch up.
      3. Because jobs in trade management are becoming increasingly technical and involve a great deal of specialized knowledge, companies are finding it difficult to find people with the right skills to fill key roles and be effective in the business of global trade.

The expanding role of trade technology

Technology is one of the common denominators in all of the issues facing global trade managers. Indeed, 81% of the survey’s respondents agreed that the solution to rapidly changing customs environments lay in adopting more capable global trade technologies that can provide better security, largely automate trade compliance and customs operations, and contain tools to help companies analyze and optimize their supply chains.

The study found that the highest priorities for companies investing in global trade technology currently include:

• • • better visibility into the supply chain;
    • ability to conduct due diligence for transactions, suppliers, and customers;
    • leveraging predictive analytics;
    • Using blockchain technology in the supply chain;
    • ability to use data to produce insights into opportunities;
    • modeling capabilities to simulate trade-lane options and optimize performance; and
    • utilizing artificial intelligence (AI) to automate product classifications.

Despite a general desire to invest in more powerful technologies, however, finding the right people with the right technical skills, knowledge, and experience to work in key global trade positions is becoming an industry-wide challenge.

The report explores this widening skills gap and the measures being taken to counteract it, including identifying where companies are finding the most capable recruits, and what industry-wide actions can or should be taken to nurture a more reliable talent pipeline.

To find out more, download the ¶¶ŇőłÉÄę Corporate Global Trade Survey Report here.

As part of the CARES Act, the federal government provided an estimated $260 billion for benefits under three new pandemic unemployment insurance benefit programs. These programs expanded the number of individuals eligible for unemployment benefits, extended the eligibility period, and also increased the benefits by $600 per week.

Unfortunately, few states were prepared to handle the influx of individual applications for unemployment benefits much less the rampant fraudulent applications made by criminal enterprises using personal information available from data breaches and purchased on the dark web. During this time, states were processing “10- to 15-times the typical volume of claims.” Within the first five months, the Labor Department reported for benefits.

In addition to the increased volume of claims that overwhelmed antiquated systems, states prioritized getting assistance to individuals over screening for potential fraud. As a result, millions of fraudulent applications were approved and billions of dollars in fraudulent claims were paid.

The US Employment and Training Administration reported an for 2021 in two of the three pandemic unemployment benefit programs with a “significant portion attributable to fraud.” By this estimate, at least $163 billion could have been improperly paid, according to the Labor Department.

The department identified that contributed to the increased fraud in these programs, including:

• • • state information technology systems that “were not modernized”;
    • staffing resources that “were insufficient to manage the increased number of new claims”; and
    • federal guidance that was “untimely and unclear.”

Fraud detection & overpayment recovery

Under the most , the Labor Department is providing an additional $225 million to states to “support accurate reporting, as well as detection and recovery of overpayments.” Permissible uses of these administrative funds include:

• • • payment of expenses incurred for reporting on investigation and overpayment activities;
    • payment of expenses incurred to gather business requirements, program computer systems or otherwise implement tools, strategies, or solutions to detect, establish, and recover overpayments as well as processing allowable waivers of recovery;
    • hiring staff or obtaining contract services for processing overpayments and recovering those overpayments; and
    • corrections of program eligibility issues.

Although the program letter focuses on fraud detection and overpayment recovery, it also acknowledges the need for states to ensure that “eligible individuals with legitimate claims get the benefits they are entitled to when they are due.”

Attachments to the program letter detail the amounts available to each state for administrative expenses. Applications for funding must be received no later than close of business on September 23, 2022.

Labor Dept. funding provides opportunities

The unemployment fraud recovery efforts adds another burden to state employment programs, which must still process applications for benefits quickly while operating with reduced staffing. These programs also are still relying on the same IT systems that remain vulnerable to exploitation by criminal enterprises.

— 44 of the 50 states — did not perform all recommended benefit payment control crossmatches, according to the 2021 Labor Department audit. Cross-verification can help states identify the most obvious of fraudulent claims, including those involving i) multi-state claimants; ii) Social Security numbers of deceased individuals; iii) claims made by federal prisoners; and iv) claims made using “suspicious and disposable email accounts.”

Investing in technology solutions and tools that can help verify beneficiary identities at the application stage can greatly reduce the payment of fraudulent claims. These solutions would allow states share data and crossmatch personal information to identify fraudulent applications.

Indeed, the Labor Department audit found that 38% of states did not perform the required recovery activities. Other technology solutions are available that can help states identify the bank accounts previously associated with fraudulent schemes that also received unemployment benefit deposits. This would create a higher probability that the state could recover improperly paid unemployment benefits.

The Labor Department funding provides a unique opportunity for states to increase staffing to alleviate some of these workload issues, or to invest in technology solutions and tools that could help them recover improper payments that were already made and even prevent future unemployment benefit fraud as well.

However, that resilience showed some signs of buckling recently as the legal world has become buffeted about by new uncertainty over inflation, international conflict, and deep shortages of legal talent. This time, as law firms across the world began facing down yet another storm, the Australian legal market has been no exception.

Indeed, according to the just-released 2022 Australia: State of the Legal Market Report, legal demand at Australian law firm fell from 6.5% growth in the first quarter of the July-to-June fiscal year to a 4.4% contraction by the fourth quarter. What had at one time appeared to be a beacon of inspiration to legal professionals around the world was now in danger of becoming a cautionary tale instead — an example of what might befall law firms that fail to heed the warning signs and respond to rising threats.

The report, published by the Thomson Reuters Institute and the Melbourne Law School, along with management consulting firm Barolsky Advisors and ESPconnect, a legal tech firm, used data collected from 16 participating law firms operating in Australia, including some of the largest firms by lawyer-count in the region, as well as interviews with 98 Australia-based stand-out lawyers as nominated by their clients in the ¶¶ŇőłÉÄę Stellar Performance report.

Fundamentals still solid

The report shows that despite currently turbulent business conditions, the fundamentals of the Australian legal market are solid, with record rate growth pushing revenue growth to 10.0% for the 2022 financial year, even with slowing demand during the second half of the year.

As law firms across the world began facing down yet another storm, the Australian legal market has been no exception.

Australian law firms also have been successful — thus far — in keeping their lawyers content with their compensation on one hand, while simultaneously holding their compensation expense growth relatively in check.

As other regions saw their hard-fought profit gains fade, Australia — which did see a slowing from last year to be sure — experienced a year over-year pace that remained extremely stable throughout the course of the year, despite a slide in Q4. Combined, these factors indicate that the Australian legal market has good reason to continue to see itself as a beacon, a guide for how modern large law firms can navigate such crises.

Yet, trouble looms

However, a strong foundation — even one that can hold up against past storms — may find itself threatened by other factors, as the report demonstrates. Essential challenges loom for the region, which, if not addressed by law firm leaders, could well become unsolvable in the future.

For example, legal talent turnover in Australia is relatively high, with nearly one-third (31.6%) of associates leaving their firm in the past year, more than their counterparts in the United States. Further, firms are facing additional hardships in developing and implementing technology, an aspect of Australian firm operations that is increasingly critical.

Also, Australian law firm partners are finding themselves bearing a load that is seemingly heavier every year and facing greater pressure than ever to master an evolving role which is increasingly focused on developing and adopting new technologies and establishing leadership in addition to their role as top lawyers within their firms.

For now, Australian law firms are weathering the continuing storm, but they must be careful that other risks — many found outside of their financial foundations and thus, outside their direct control — do not extinguish their beacon.

You can download a copy of the new 2022 Australia: State of the Legal Market Report, here.

The traditional way for large companies (including retailers) to ensure their vendors are following desired ESG requirements is by implementing a supplier code of conduct (sometimes called a vendor code of conduct). These codes typically set out the minimum requirements regarding fair and safe labor and environmental practices, among other concerns, that manufacturers, suppliers, and other vendors must meet in order to sell goods to or otherwise do business with the company.

The codes typically sit on company websites and are sometimes incorporated by reference into the contracts in which they enter into purchase goods and services. Non-compliance may subject a vendor to penalties, including loss of the chance to do business with that company. While the codes can showcase a company’s commitment to ESG, it is not known for certain how effective they are in fostering ESG values throughout the supply chain.

Beyond supplier codes of conduct

ESG-related requirements can also be directly embedded in supply chain contracts. This can be seen in the increasing use of representations and covenants in supply contracts to supplement the contract’s compliance with law provisions. A breach of the representation or covenant is a breach of the contract itself that subjects the breaching party to contractual liability in addition to whatever public or private remedies are provided by law.

Examples of ESG-related provisions include:

• • • Conflict minerals clauses — These include provisions that require the seller of goods to represent that the goods do not contain , the presence of which could trigger reporting obligations under the conflict minerals rules promulgated under well as sanctions, under Executive Order 13671. The rules aim to reduce a significant source of funding (trading of conflict minerals) for armed groups that are committing human rights abuses and contributing to conflict in high-risk areas, such as the Democratic Republic of the Congo.
    • Forced labor clauses — These include covenants used by US importers of goods to prohibit their foreign manufacturers or suppliers from using any form of forced labor in the production of the imported goods, including in their own supply chains. These clauses help to ensure compliance with , which prohibits importing goods into the US that are made with forced labor, including convict labor and forced or indentured child labor.

Climate-conscious clauses

Detailed climate-conscious clauses in purchase contracts, such as clauses requiring a supplier to reduce their greenhouse gas (GHG) emissions, are still not commonplace, but this may be changing. Paving the way is the increasing standardization of the terminology used in these contracts, especially regarding GHG emissions.

For example, it is widely accepted practice to group a company’s emissions for reporting purposes according to the three categories defined by the , a corporate accounting and reporting standard that helps companies and other organizations to identify, calculate, and report their GHG emissions. These three categories include a company’s self-generated emissions (Scope 1); indirect emissions from the company’s purchased energy (Scope 2); and all other emissions that a company is indirectly responsible for across its value chain, such as emissions from the manufacture of purchased goods or emissions from the customer acquiring the goods (Scope 3). Clearly, Scope 3 is the most expansive and difficult to measure.

Another driver for the increased use of climate-conscious clauses in supply chain contracts may be the for public companies issued by the Securities and Exchange Commission (SEC). These proposed rules also could impact privately held companies that are not directly subject to the SEC’s proposed rules but are part of public company supply chains. For example, public companies may have the incentive to use their negotiating leverage to impose climate-related obligations on their smaller partners in order to help public companies fulfill their SEC disclosure obligations and inform their investors.

The Chancery Lane Project

Further help in navigating climate-conscious contract clauses, however, may be on the way. For example, UK-based  has worked in collaboration with lawyers and sustainability professionals across multiple disciplines and jurisdictions to create a suite of open-access contract clauses (more than 100 so far) that can be adapted to drive climate action and align contractual drafting for the transition to net zero.

The clauses can be used, for example, to incentivize reductions in Scope 3 emissions and promote positive sustainability behaviors. The clauses are based on the law of England and Wales, but the organization has begun work to adapt them for use in other jurisdictions, including the US.

¶¶ŇőłÉÄę Regulatory Intelligence’s (TRRI’s) , focuses on the challenges expected to be faced by risk and compliance functions within financial services firms in 2022. The report is based on a survey that generated responses from almost 500 practitioners worldwide, representing global systemically important banks, banks, insurers, asset and wealth managers, regulators, broker-dealers, and payment services providers.

You can download a copy of ¶¶ŇőłÉÄę Regulatory Intelligence’s (TRRI’s) newly published 13th annual Ěýłó±đ°ů±đ

The survey questions remained largely the same as the previous year, and the survey closed before the Russian invasion of Ukraine and the resulting widespread sanctions. The shifting priorities highlighted in the survey results will only have been exacerbated by the myriad sanctions imposed on Russia.

Last year’s pointed to a need for compliance officers to focus on planning for the future and developing a vision to manage their firms’ evolving compliance and regulatory risks.

The new 2022 report and survey shows the difficulties that compliance officers are experiencing as they try to plan for the future. Competing priorities are compounded by tightening budgets and potential shortages of skilled professionals. Compliance functionality is a fundamental part of the in-house core competency required to secure the long-term future of financial services firms, but many are struggling to meet their commitments while maintaining an appropriate risk and compliance culture.

The demand for compliance skills has increased substantially in the last few years, the report shows. The regulatory environment has diversified, with developments occurring in many areas, such as crypto-assets, fintech, artificial intelligence, third-party management, operational resilience, and cybersecurity. The range of regulatory topics for which compliance is now expected to provide senior managers with assurance has increased. There is also emerging evidence that the compliance function is having to work much harder to continue to be heard at the highest level of the firm.

The 2022 results show a frustration among respondents that, despite compliance’s widening duties, staff numbers are unlikely to grow, mostly because staff costs are increasing and budgets remaining tight. Add to this the increases in personal liability for compliance officers, and it’s perhaps easy to see why capable individuals may be deterred from joining the profession and experienced personnel may choose to leave.

Outsourcing, new technology, and regulatory technology may step in to plug some of the gaps, but all these resources will need to become more sophisticated to make the type of changes required by compliance functions.

According to the new report, the greatest compliance challenges that boards expect to face in 2022 include:

Further, the 2022 report briefly explores some of the main regulatory developments and other drivers that have contributed to the heightened demand for skilled compliance officers as well as the challenges compliance officers are facing.

The findings in the report are intended to help financial services firms with planning and resourcing while allowing them to benchmark their own approaches with those of the wider industry. The experiences of the global systemically important banks are analyzed where these can provide a sense of the stance taken by the world’s largest financial services firms.

What does the ideal future of the compliance function now look like?

“I am concerned compliance is moving backwards, not forwards. That’s due to other challenges — supply chain, pandemic, and non-pandemic issues — that we’re getting less budget, getting more isolated, and returning to check-the-box type of compliance management. We’re in danger of losing the progress we’ve made rather than moving forward into a future state, ideal or not.”

— Anonymous, United States of America

In some firms there may be a perspective that technology could reduce the need for compliance functions. In fact, the increased popularity of regtech is a step down this path; however, technological solutions are often immature and need to show their value before they’re widely accepted. It is imperative that compliance functions, whether manual or automated, showcase their value and necessity to senior managers. A well-resourced, skilled, and managed in-house compliance function remains the most effective way of delivering high-quality compliance at a firm. Indeed, compliance skills are a core competency, and an appropriately resourced compliance function is a key way in which a firm can ensure that it continues to thrive.

Strong compliance functionality is difficult to achieve especially in the current climate. Firms should consider a wholesale review of their internal compliance strategy. A board-sponsored directive that the compliance function evaluate the firm’s post-pandemic position, the impact of new geo-political tensions, the refreshing of skills, and a continued investment in digital transformation all may go some way to untangling competing priorities that compliance leaders now face.

TRRI thanks all respondents for their participation in the survey, offering a continued assurance that responses will remain confidential unless permission to include an anonymized quote has been received.

The special report will be featured on the Compliance Clarified podcast which is available on ,Ěý, and .

You can see report co-author Susannah Hammond here.

Global fraud rings used numerous scam techniques to drain federal relief programs and defraud unsuspecting victims through phishing emails and texts, bogus social media posts, robocalls, impostor schemes — all highly effective at stealing personal identifying information and pandemic relief funds.

Now, more than two years after the start of the pandemic, law enforcement is looking for ways to recover some of those funds for victims and improve communication between the public and private sectors as a way to prepare for the next pandemic. They are examining the evolution of fraud over the last two years and identifying key takeaways to safeguard for the future.

Early in the pandemic, criminals focused on fraud related to personal protective equipment (PPP) such as N-95 masks and bogus testing kits. But as the US government began to fund stimulus programs through the Coronavirus Aid, Relief and Economic Security (CARES) Act, individuals and organized criminal networks worldwide pivoted their crime schemes.

This has led to a focus on recovering pandemic-related relief and has become an investigative priority for the Secret Service in partnership with government agencies and financial institutions. “Law enforcement is prioritizing the exploitation of pandemic-related relief because the federal funding through the CARES Act attracted the attention of individuals and organized criminal networks worldwide,” says Roy Dotson Jr., Assistant Special Agent in Charge of the Jacksonville Secret Service field office and the .

Partnership is the way forward

Part of Dotson’s job is to act as a point person, addressing ongoing COVID-19 pandemic criminal activity through prevention, mitigation, and investigation. He works in conjunction with his office’s and with federal, state, local, tribal, and territorial partners, as well as with foreign law enforcement, academia, and the private sector partners, particularly financial institutions.

“I work with law enforcement partners to provide information and training relative to the recovery of pandemic funds — whether through seizure warrants or administrative seizures,” Dotson says.

As he investigated pandemic-related crime over the past two years and spoken to agencies across the country, Dotson has seen a huge uptick in cyber-enabled crime, meaning those crimes that are digital in nature. Whether business email compromise scams, ransomware attacks, data breaches, or the sale of personally identifiable information on the dark web, financially motivated cybercrime is on the rise. And we saw it in some of the biggest pandemic-era fraud scams, including unemployment fraud and theft of PPP loans.

Two scams Dotson specifically points out aren’t all that new — identity theft and money mule networks, in which victims, often unwittingly, launder or move illicit funds for criminals. Dotson has worked hard to share his expertise and resources, and disseminate best practices to law enforcement and financial institutions relative to their core investigations.

Sadly, money mule scams are challenging because the victims are often members of vulnerable populations or come from low-income communities. Money mule scams can happen through fraudulent employment schemes or online dating or romance scams. Dotson says criminals recruit money mules to help launder proceeds derived from online scams and frauds or crimes like human trafficking and drug trafficking. Because money mules add layers of distance between crime victims and criminals, it is harder for law enforcement to accurately trace money trails.

“I speak with elderly persons who respond to an online job opportunity,” Dotson explains. “They don’t really understand they are being manipulated.” The victim will accept an offer of employment from the criminal, and then the criminal will direct the unsuspecting victim to open a bank account in their own name to receive and transfer money.

As the criminal gang’s “employee,” the victim will be asked to receive funds in their bank account and then “process” or “transfer” funds through wire transfers, Western Union, or MoneyGram, ACH, or even US mail. In some scenarios the victims are even instructed to send funds via a bitcoin ATM machine.

Compounding the problem is that the criminals are often international syndicates, including West African groups. “These aren’t just random lone criminals on the internet. The scammers are a full-time operation. This is their focus 24/7. They are much more sophisticated than we give them credit for,” he says.

Improved communication leads to better results

While this may seem daunting, Dotson is optimistic about stopping fraud such as unemployment fraud scams, should another pandemic-like disaster occur. State agencies, which administered much of the COVID-19 pandemic relief funds, have improved their platforms and modernized their process. There are also greater interagency communication. “The states are communicating much better with the Department of Labor,” Dotson says. “At the start of the pandemic, we basically had 54 statewide agencies operating independently from one another.” While this was through no fault of any particular agency, it presented a huge opportunity for criminal organizations to exploit that vulnerability.

In today’s environment, cyber-enabled crime investigations require the skills, technologies, and strategic partnerships in both the cyber and financial realms. Dotson says that investigators can no longer effectively pursue a financial or cybercrime investigation without understanding both the financial and internet sectors, as well as the technologies and institutions that power each industry.

However, Dotson’s office is here to help. “I want to continue to develop great relationships with financial institutions and agencies,” he says. “I can share fraud trends I am seeing that might be novel to their bank — or, if something major goes down, we can get that information out to the community very quickly.”