Final answer:
The Legal and Compliance departments must be separate within a firm to prevent conflicts of interest, ensuring unbiased legal advice and independent compliance monitoring.
Step-by-step explanation:
To avoid conflicts of interest within a member firm, it is crucial to maintain separation between the Legal and Compliance departments. This separation ensures that legal advice remains unbiased and that compliance with policies and regulations is independently monitored and enforced.
The Legal department focuses on giving legal counsel and managing litigation risks, while the Compliance department concentrates on adherence to laws, regulations, and internal policies. This division avoids any potential for one department to unduly influence the other, thus mitigating conflicts of interest.