The Compliance Boom

When it comes to insuring compliance with government regulations, business is booming.


There's a great scene in the 1967 movie The Graduate when an older man takes a recent graduate aside and says, "I just want to say one word to you, just one word…Are you listening?…Plastics."

If that movie were being remade today, and if the career advice were to be aimed at the class of 2013, the one word would be this: "compliance."

That is to say, the business that is booming is the business of making sure that American companies obey — or comply with — the ever-increasing number of laws and regulations that are being heaped upon them. This is the fault not only of the Obama administration but of the Bush administration before it, which did its part with, among other things, the post-Enron Sarbanes-Oxley Act.

Indeed, if there is a single fact that sums up the state of American political economy at the present moment, it is this: the Boston office building once home to Inc. Magazine and Fast Company, which chronicled and celebrated small and fast-growing businesses, is now the headquarters of a publication called Compliance Week.

The Wall Street Journal, which used to advertise itself as "The Daily Diary of the American Dream," this month launched its own "Risk & Compliance Journal."

And The New York Times, which usually devotes its "30-Minute Interview" feature to a real estate developer, last week featured the co-founder of SiteCompli, Jason Griffith. Founded in 2009, the company has 20 employees and plans to double that by the end of the year. Its business, the Times reports, is helping building owners "comply with the myriad rules and regulations within various New York City agencies."

"We are growing very fast," Griffith told the Times. "Our revenues have been up 1,200 percent."

At a time when companies are still reluctant to hire, the online job site Careerbuilder.com carries 2,588 job listings for compliance officers, the people who make sure companies follow all the rules, and who read Compliance Week (one year individual subscription, $1,199) and attend its conferences.

It's great to see that there's some sector of the economy out there that is "growing very fast." The businesses that are helping other businesses with their compliance seem to be providing something of value. And if some compliance officer helps to prevent a bank from ripping off its customers, or a chemical company from polluting a river, God bless them.

But for all that, the growth of this culture of "compliance" can seem jarring in a nation whose history is full of rule-breaking troublemakers. This week marks the 238th anniversary of the battles of Lexington and Concord, which Massachusetts recalls by making Monday a holiday, Patriots Day. When the Americans rebelled against Britain, they weren't being compliant. They were being noncompliant.

This year would also have been the 100th birthday of the civil rights heroine Rosa Parks, which the Post Office has marked with a stamp honoring her. There's also a new biography, The Rebellious Life of Mrs. Rosa Parks. She wasn't compliant, either.

The compliance officers will point out that being a compliance officer may sometimes mean rebelling against a corporate culture of noncompliance. Maybe so. But even the greatest conservative figures realize that rules are sometimes made to be broken, a point that was brought home to me last week in Washington at, of all places, a celebration of the life of, of all people, Judge Robert Heron Bork, who died last year.

A speaker at the event recalled that upon arriving at some event, Bork arrived at the bar only to find the bartender refusing to serve him. The bar had been ordered closed, because the cocktail hour was ending, and the crowd was supposed to make its way to be seated for dinner. Bork was insistent, telling the bartender that the "Nuremberg defense" wouldn't work with him.

I'm all for the rule of law, as was Judge Bork, who details as much in the new posthumously published book Saving Justice. But if America is to become a nation of compliance officers — and let's hope it does not — let's hope that they have the wisdom to realize that sometimes rules are there to be rebelled against. If we aren't careful, it may yet get to the point where Congress has to mandate that for every compliance officer a firm hires, it needs to hire a creativity officer as a counterweight.