By Rebekah Henderson, Director – Legal Network, Velocity Investments

In today’s compliance-driven legal servicing environment, it’s not enough to say your firm values data security—you have to show it. That’s a theme I recently explored on the Receivables Podcast, and it’s one we put into practice every day at Velocity Investments.

As a purchaser and manager of consumer debt portfolios, Velocity Investments works with a wide network of law firms. These firms play a critical role in protecting not just our reputation—but also the data of thousands of consumers. And that responsibility doesn’t start and stop with policy documents. Our legal partners must demonstrate that security and compliance protocols are being followed consistently, not just written down.

Written Policy vs. Active Compliance

Let’s start with what we consider the bare minimum: documented policies outlining your firm’s approach to network security, employee data access, third-party service providers, and secure data disposal. Every law firm in the Velocity Investments network must have these in place.

But here’s the truth: a written policy that no one follows is worse than no policy at all.

We expect firms to operationalize those policies. That means:

• Conducting and logging routine security checks
• Tracking failed security controls and incident resolution timelines
• Logging employee data access changes in real time
• Creating audit trails that can be reviewed at any point
• Monitoring third-party vendors to ensure they meet similar standards
• Reviewing and updating policies regularly to reflect regulatory changes

Firms should also be asking themselves: When was the last time we tested our policies? What evidence do we have to show they’re working? How quickly can we provide documentation if requested?

The Auditable Standard

We conduct regular audits—and not just on a surface level. During a recent audit, we asked a firm to provide evidence of their daily server security checks. They had the policy in writing, but couldn’t provide the logs. That’s a red flag.

Another firm impressed us by presenting a clean, timestamped history of every access permission granted, revoked, and modified. It didn’t just meet our standard—it raised it.

We’re not trying to catch firms doing something wrong. We’re verifying that they’re doing things right. Because in this industry, we all share in the risk—and the responsibility.

That’s why we believe in the philosophy of “trust, but verify.” This approach not only promotes transparency—it fosters a culture of accountability that serves all parties involved: clients, consumers, and our legal partners.

What Counts as Evidence?

Firms often ask us what we mean by “proof.” Here’s what we look for:

• System logs of nightly/weekly/monthly checks
• Change management records related to data access
• Employee training records and documented acknowledgements
• Exception logs that explain when policies weren’t followed—and what was done about it
• Screen captures of completed control activities
• Vendor risk assessments and results of due diligence reviews

One of the most powerful things a firm can do is maintain a security control dashboard—a central source where management can see what’s working and what needs attention.

Tracking policy exceptions isn’t a bad thing. It’s a signal that your internal controls are actually being used. It’s not about perfection—it’s about process.

Why the Risk Is Higher Than Ever

The pace of cyber threats, data breaches, and enforcement actions continues to rise. As compliance standards evolve and regulatory scrutiny increases, firms must be ready to not only comply—but to demonstrate that compliance proactively.

That includes being prepared for:

• Client-driven audits (like those conducted by Velocity Investments)
• Third-party risk assessments from creditors or buyers
• State-level enforcement actions tied to consumer data handling

Firms who are caught off-guard—without records, logs, or evidence—are left vulnerable. It’s not a question of if your firm will be asked to prove compliance. It’s when.

Best Practices for Legal Partners

If you’re a law firm looking to strengthen your compliance framework or partner with Velocity Investments, here are six best practices we recommend:

1. Document with Discipline

Use systems that automatically log security tasks. Relying on verbal confirmation or memory invites gaps.

2. Train Beyond the Checkbox

Make sure your team understands not just what the policies are—but how they affect daily operations. Reinforce with training and testing.

3. Audit Yourself First

Run your own internal audits quarterly. If you find something, fix it—and document that too.

4. Keep Policies Current

Outdated procedures can create risk. Review them annually or whenever regulations shift.

5. Strengthen Your Vendor Oversight

Your compliance is only as strong as your weakest partner. Assess vendors just as you would internal departments.

6. Create a Centralized Compliance Hub

This could be a shared drive, dashboard, or GRC platform—whatever enables real-time access to logs, policies, and records.

Compliance as a Competitive Advantage

Law firms that treat compliance like a partnership—not a checklist—are the ones that thrive. They don’t just retain placements—they earn more of them. Because for us at Velocity Investments, we don’t just want to work with secure firms—we want to work with firms that can prove they’re secure.

And when Velocity Investments evaluates a legal partner’s performance, it’s not just about numbers—it’s about the integrity of how that partner handles data, risk, and operational controls. Strong compliance frameworks are a direct reflection of a firm’s readiness to grow with us long term.

We’ve seen firsthand how firms that take compliance seriously gain a competitive edge. Not only do they build stronger reputations, but they also get priority placement opportunities. Why? Because trust is earned—not assumed.

Looking Ahead: Continuous Compliance

Operationalizing compliance isn’t a one-time task—it’s an ongoing commitment. With regulations like the CFPB’s supervision of third-party service providers and the increasing complexity of multistate requirements, law firms must view compliance as a strategic function—not an administrative burden.

Velocity Investments remains committed to helping our law firm partners stay ahead of the curve. Whether it’s through quarterly reviews, updated audit templates, or joint training sessions, we want our entire legal network to operate with integrity and confidence.

If your firm is looking to improve its compliance posture or better understand what institutional partners like Velocity Investments expect, we’re happy to share guidance. Because in our world, security isn’t what you say—it’s what you do, and what you can prove.

Learn more about our standards and legal servicing network at VelocityInvestments.com.

Rebekah Henderson leads Velocity Investments’ legal network. She brings over 20 years of experience in bridging law firm performance with receivables management strategy.