Business managers need to take primary responsibility for managing legal risk, but are often tempted to abdicate that responsibility to the legal team.
As head of a team you should work towards restoring that responsibility through the strategy you are pursuing and orchestrating the efforts of the team to achieve it. At the outset is the need to conduct a collaborative assessment of legal risk with business functions / areas, which in an ideal world will mean:
- The head of the business function, senior managers and a member of the in-house legal team have identified the legal risks associated with their activities in terms of:
- Regulatory compliance
- Contractual obligations and rights
- Third party exposure
- They have incorporated into business plans how the legal dimension affects implementation and taken into consideration developments which may heighten legal risk.
- They have reached a consensus on how risks should normally be managed and what triggers the need for escalation before acceptance (independently of corporate approval levels).
- Primary responsibility for managing the relationships which give rise to legal risk is accepted by function managers.
A strategy for legal services which does not include what others in the organisation should be doing is likely to be flawed.
As a team member you need to be responsive and constructive but not accept any task which a business colleague seeks to ‘entrust’ to you. You also need to avoid falling into the trap of ‘confiscating’ responsibility in the interests of expediency.
This webinar for the C&I Group on 23 May will provide guidance on how to approach this important subject at the strategic and day to day levels: