Although legal risk management cannot be defined using just one umbrella explanation, on a fundamental level it refers to how you can take steps to identify and protect against events that could lead to a legal consequence. The implication of a legal consequence is that it would have a negative impact on a business. In an ever more sophisticated legal business world it is important that business owners take the necessary steps to ensure that they have eliminated any identified potential for risk and have a contingency plan should unidentified risks occur.
Effective Legal Risk Management
Effective legal risk management begins with a proactive approach. Withers Worldwide are a prestigious law firm who offer a wide range of legal services to both businesses and to private clients. Employing the services of one of the world’s best law firms will result in them taking a number of steps to assess your businesses potential for legal risk and then putting into place measures to protect you.
A Legal Audit
The first step towards robust legal risk management is a legal audit. It is important that your law firm get to know your business and how it works. Learning about strategic goals, key activities and stakeholders will allow the firm to put together an overview of the business from which they can proceed. Legal audits are not a one off occurrence and to be effective must be carried out regularly as part of a wider legal risk management strategy. The legal audit will lead to a detailed plan that lays out the legal requirements of the business.
Once the legal requirements of the business have been established, then these requirements need to be communicated throughout the company. A series of training sessions for staff and management is a good way to get the message across and the sessions should make use of a variety of learning methods such as, presentation, discussion and written resources.
Put Into Practice
Compliance and governance of legal risk management policies is crucial in order to positively steer the direction in which business is conducted and to set standards for expected outcomes and protocols. Regular in-house reviews and appraisals should be conducted that examine compliance and governance, the records of which will be key in the on going auditing process.
As all businesses are different the degree to which they need to implement legal risk management will also differ. The underlying facts are, however, that all businesses are exposed to some kind of legal risk and that addressing this upfront is paramount to on going success.