The compliance seat: Why compliance culture is harder to build than it looks

Author: Laurence Baker
Read time: 11 minutes
Published date: 2 July 2026

Most funds say compliance is a priority. Fewer have built a function that deal teams actually want to work with. Here's what the best firms do differently.

Ask a GC at a scaling private markets fund whether their legal and compliance function has a seat at the table, and most will pause before answering. Not because the answer is no. But because the honest answer is: it depends on the day, the deal, and who's in the room.

For me, that pause is telling, and has become something I look for. It describes a function that is valued in principle and marginalized in practice—brought in when things get complicated, consulted after commercial decisions have already been shaped, and associated in the minds of deal teams with friction rather than momentum. It is a pattern that shows up across funds of all sizes, but it becomes structural at scale. And once it is structural, it is very hard to reverse.

Building a legal and compliance function that is genuinely embedded in how a firm operates has always been one of the defining challenges of the role. It does not get easier as firms grow—if anything, the pace of deal flow, the expansion of teams, and the pressure to move faster all make it harder to maintain. What separates the functions that sustain it from those that struggle is rarely intent. It is design.

The tension between legal and commercial teams is a structural feature of how investment firms operate, reflecting genuinely different incentives and timelines. It does not go away. It gets managed—and managed well or badly depending on how the function is built and how it behaves.

The seat is earned, not assigned

There is a version of legal and compliance that the best GCs describe in similar terms: a function that deal teams pull into conversations early, not because they have to—but because they want to. A team that understands the commercial context well enough to ask the right questions rather than issue the right warnings. A culture where compliance is experienced as part of how the firm operates, not as a checkpoint at the end of a process.

“A good compliance program is the integration of compliance across the board—the flow of information and communication across teams.”
—Haris Vrahliotis, principal compliance director and counsel, TowerBrook Capital Partners

What is striking about this version is how rarely it comes from formal authority. The GCs who describe it do not point to reporting lines or governance structures as the reason it works. They point to relationships, consistency, and presence. Their teams were in the room early enough to shape decisions rather than review them. They communicated in commercial terms as well as legal ones. They built a reputation for making things move, not for finding reasons they couldn't.

That reputation is the compliance seat. And it is earned through a sustained pattern of behavior, not through a single initiative or a new operating model.

Why timing shapes everything

The most persistent challenge for legal and compliance functions is not the quality of their work. It is when they get involved. A function brought into a deal early can shape, redirect, and add genuine value to the outcome. The same function brought in late can only review what has already been decided—and any concern it raises at that point is experienced as friction rather than input, regardless of how well-founded it is.

This is a dynamic most GCs and in-house counsel recognize. It is not usually the result of deliberate exclusion—deal teams are not trying to marginalize legal and compliance. It is the result of momentum. Deals move fast, early-stage conversations feel provisional, and the instinct is to involve legal when there is something concrete to show. By the time that happens, the commercial logic may have already formed and the window for genuine shaping has narrowed.

The firms that have shifted this tend to have made involvement structural rather than discretionary. Legal and compliance are part of deal pipeline conversations from the start—not because every early-stage opportunity needs legal input, but because the relationship and context that enables genuine value-additive contributions as the opportunity progresses are built during those earlier stages.

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