Assessing the legal risks posed to any
business is no different from any corporate risk management assessment. It
involves identifying, assessing and then developing strategies to manage risks
taken by the company. In this case though, the key factor is the potential
legal consequence that any event may have on the business. In order to manage
this whole process effectively, there are a few steps worth taking.
- Understand the legal responsibility of the company
Conducting a thorough review of the
company’s activities is the most effective starting point. You need to have a
clear idea of what legal responsibilities and obligations exist. The only way
to do this is to truly get to grips with what the company does and how it
operates on a day to day level. An effective lawyer should then be able to
assess exactly what legal risks are entailed in each area of the company’s
operations. For quick reference, reliable resources such as Legal Vision provide a good depository of
legal documents and opinion on all matters.
- Know what each staff member does
Laws are breached by people, not systems.
Therefore, it is crucial to know what each member of staff is responsible for and
what their regular tasks consist of. Meet with each staff member, get to know
them and most importantly understand their work. They are probably unaware of
legal risks involved in what they do, so you may need to tease it out of them.
Consider the worst-case scenarios and brainstorm with them to think of the
legal risks which they might face.
- Develop clear policies
You are now in a position to analyze
the legal risks to the company. A realistic in-house legal counsel will
understand that some risk is inevitable to all businesses. The only real
question is whether the risk is worth taking. Making that judgement call is the
mark of quality in-house counsel. Once this analysis has been made, you should
be able to develop clear and effective policies which ensure that the company’s
operations do not breach the balance of risk. Policies should be easy to
understand and implement.
- Spread the word
Once you have policies in place, it is
vital that they do not remain in a folder or tucked away in a draw. They must
be communicated effectively to all staff or else you may just as well not have
bothered. It is also no good leaving policies in the sole care of in-house
legal teams. All staff must be fully aware of their responsibilities. It is a
good idea to develop and deliver training sessions, including practical
examples of the challenges staff might face. Ultimately, you want to minimize
the work of in-house lawyers. This can be achieved by making sure that your
entire staff is on board.
- Establish a well-oiled legal team
In-house counsel should oversee the
company’s legal risk management on a day to day basis. However, if they are
overworked or under-staffed, then they are more likely to miss a crucial detail
or development. Making sure that you have a legal team which is not only knowledgeable
but vigilant, fresh and attentive will be the best guarantee of legal
health. Even if it means hiring extra staff, it may be worth the investment to
minimize potentially damaging legal action.
