The compliance seat: what great legal and compliance culture actually looks like

Most funds say compliance is a priority. Fewer have built a function that deal teams actually want to work with. The difference is not process or technology. It is culture - and culture, it turns out, is a design decision.

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 marginalised 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.

Following months of conversations with Legal and Compliance leaders, this is the first in a four-part series on what it takes to build a legal and compliance function that genuinely earns its place in a firm - not just on the org chart, but in the conversations that matter. We start with the destination: what great actually looks like, and what the firms that have got there did differently.

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 & 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 behaviour, not through a single initiative or a new operating model.

Proximity is not optional at scale

At smaller funds, proximity tends to happen naturally. The GC or Deal Counsel is in most conversations by default because everyone is. Legal and deal teams share context informally, problems surface early, and the relationship between commercial ambition and legal caution is managed through conversation rather than process.

Scale breaks this. As AUM grows, teams expand across jurisdictions, deal flow accelerates, and the informal channels that kept legal close to the business start to thin. The GC who was in every conversation at $5bn is now leading a team of eight across three geographies, and deals are moving without them until something comes up that requires a legal view. By the time legal or compliance is involved, the commercial framing has hardened. The question is no longer ‘how do we structure this?’ but ‘can you clear this?’ - and the answer to that question, however carefully delivered, is experienced as obstruction or approval. There is no longer room for the kind of early, shaping input that makes legal genuinely valuable.

This is why the firms that maintain strong compliance cultures at scale make deliberate choices about proximity. Not just who attends which meetings, but how legal and compliance are woven into the standing rhythm of the business: deal pipeline reviews, investment committee preparation, onboarding processes for new counterparties. Presence in those forums is not about oversight. It is about staying close enough to the commercial reality that legal input remains useful rather than procedural.

The technology question

No conversation about legal and compliance culture in 2026 avoids AI and technology. The market is full of tools that promise to make legal or compliance faster, cheaper, and more consistent. Some of them deliver on parts of that promise. Many of them add a different kind of friction: a new platform to learn, a new workflow to embed, a new set of outputs that still require a senior lawyer to review before anything can move.

The adoption paradox is real. Legal and compliance teams that are already stretched do not have the bandwidth to train new systems, curate internal data, and manage iterative improvement cycles on top of their existing workload. Tools that require significant upfront investment to become useful tend to stall at the pilot stage: used by the enthusiasts, ignored by everyone else, and quietly retired when the contract comes up for renewal.

The more important question is not which tools to adopt but what problem technology is actually solving.

If the underlying culture is one where legal and compliance is brought in late, seen as a blocker, and disconnected from the commercial teams it serves, technology will not fix that. It will make the existing dysfunction faster.

The firms that are getting the most from legal AI, or partnering with solution providers that have it embedded, are those that already have strong operating models, clear playbooks, and a culture where compliance is embedded into how work gets done. Technology in those environments compounds what already works. Everywhere else, it adds complexity before it reduces it.

“Bolting it on because everybody else is doing it is not going to be the answer. But doing it well is really hard - all change is hard. The firms that succeed are those that take the time to understand their workflows, get people involved, and only embed something where it genuinely makes people more efficient.”

- Hannah Thompson, COO, Avantia

What the best functions have in common

Across the funds where legal and compliance genuinely works - where deal teams trust the function, problems surface early, and the GC is a voice in strategic decisions rather than a reviewer of concluded ones - a handful of things tend to be true.

1) Compliance is introduced to deal teams, not deployed against them. New hires on deal teams are briefed on how the legal and compliance function works with them, what it needs from them, and why early involvement makes transactions move faster. The relationship is established before it is tested.

“If you understand and communicate the first principles rather than a list of rules, you can almost deputise more people across the firm to say: this feels like it doesn’t fit in - can you help me with that?”

- Haris Vrahliotis, Principal Compliance Director & Counsel, TowerBrook Capital Partners

2) Legal and compliance teams attend the forums where commercial decisions are shaped, not just the ones where they need to sign off. This is a structural choice, and often a physical one. Teams that sit with deal teams, attend deal review calls, and are present in investment committee preparation develop a commercial instinct that is impossible to build from a distance.

3) Problems are surfaced early because the culture makes it safe to do so. Deal teams that trust the legal and compliance function raise issues when they are small and manageable, not when they have become embedded in a transaction structure that is hard to unwind. That trust is built over time, through consistent behaviour: legal that engages constructively, communicates clearly, and does not treat every concern as a reason to pause.

4) The standard is set from the top. In every firm where compliance culture is strong, it is because senior leadership - not just the GC, but the CEO and investment leadership - treats compliance as a reflection of the firm’s values rather than a regulatory obligation. That tone shapes how deal teams experience the function, and whether they treat it as a partner or a hurdle.

“Policies and procedures are never enough alone - they’re not going to be perfect for every single scenario. You need those underlying qualities that can drive you when you’re off script.”

- Haris Vrahliotis, Principal Compliance Director & Counsel, TowerBrook Capital Partners

The gap most funds are living with

The honest reality for most funds at scale is that the compliance seat is partially occupied. Legal and compliance are involved in major decisions, trusted on significant risk calls, and respected as a function. But it is not yet embedded in the daily rhythm of the business in the way the best functions are. It is called rather than present. It reviews rather than shapes. And deal teams, while they would not describe it this way, have learned to manage around it.

That gap does not close on its own. It closes through deliberate choices: about where compliance sits in the business, how it is resourced, what partners it works with, and what the operating model looks like at the next stage of growth.

In the next article in this series, we look at why that gap exists in the first place - the structural tensions that keep compliance at arm’s length even when everyone in the firm agrees it should be closer. 

For our clients, the right legal and compliance partner is a key step in building a scalable culture of compliance - get in touch to see how we can help.

Talk to us →  avantialaw.com/get-started

Watch our full conversation on Compliance by Design, with Haris Vrahliotis here.