In a recent report from Berwin Leighton Paisner LLP about Legal Risk Management, which is a discipline to be further developed, we can read about the findings made. There are three broad conclusions about legal risk from the results (excerpt from the report).
- There is broad agreement on what are the top 3 legal risk priorities.
- Legal risk is poorly understood outside the Office of the General Counsel (OGC). To improve understanding, General Counsel should report clearly how legal risk materially impacts their organisation.
- Respondents lack confidence in the organisation’s ability to manage emerging and business-as-usual legal risks. The legal department’s role in the 3-lines of defence is a particular weakness
Contractual risk was rated as a very high priority.The report concludes that at the contractual estate represents the value of the business and the sum of an organisation’s sales and supply agreements goes a long way to establishing that organisation’s commercial viability. But many institutions, if asked, would be unable to serve up their entire suite of contracts. Even fewer would have analysed the risks those contracts expose them to; or checked whether they are compliant with latest company policy. It seems that contractual risk analysis and policy compliance are at the top of the agenda for a lot of the companies.
These findings are very much in line with my own understanding – legal risk management and structural work with legal departments is set back to day to day fire fighting. Companies need to get on top of their agreements and obligations.
As a seperate note – I still find it amazing that so few law firms actually trying to address the most wanted service – KEEP US OUT OF TROUBLE! My respect to Matt’s groundbreaking work in this area.