Identification of Legal Risk

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A major component of any Legal Risk Management Program is of course the identification of legal risk.  The “identification phase” as it is called can be conducted by using numerous risk identification tools as varied as the spices in the picture to the left.  Normally however, when  a company first starts the identification phase, it may want to rely on core process tools  such as employee interviews and document review at first.

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The identifcation phase may look something like this:

  1. Risk Identification Phase
      1. Conduct confidential interviews of employees in key departments
      2. Review of processes and procedures
      3. Review of documents
  2. Identify critical risk factors through surveys
  3. Develop Action Plans

Interviews- sometimes people wonder why it is prudent to use confidential interviews as a tool to identify risk.  The reason is that not only do employees need certain risks explained ot them in order to evaluate the probability of risk but confidentiality is needed to allow employees to open up about the risks they see. Remember, when conducting a risk assessment of any department within a company, you are not only trying to identify the risk but figure out why the risk exists.

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A question to ask yourself  during the legal risk identiifcation phase should be:  “What are the major risks in any department that could or would generate legal liability or reputational harm for any part of the company?”

So, it is advised that when conducting the legal risk identification phase you may want to use a number of tools to identify risk but you should at the beginning use core process tools such as interviews, worshops,surveys and document review. Once the legal risk is identified , it is easier to address such risks through mitigation or even risk shifting.

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1 Comment

  • Bryan,

    Thank you for this very smart, direct and clear roadmap to protect and ensure legal risk. For those of us on the front of the business running and building formidable sales, marketing and communication the last thing we need is poor legal risk management potentially ripping apart our heavy lifting and hard work to make a market. We will borrow your identification and review process stated and greatly appreciate you sharing your urbane and highly relevant legal leadership with us all Bryan. Thank you very much!

    Peter Weedfald March 20, 2013