Don’t minimize legal risk, identify, size, and match it

A European law department survey in 2003 found that most law departments considered among their primary roles to be to “minimize legal risk.” [www.practicallaw.com/A28843, pg. 2]. That goal can’t be legitimate, for to achieve it business would have to cease and lawyers would have to be anti-matter. Making a profit means taking risks; minimizing risk means the end of entrepreneurship.

In-house lawyers need to identify the legal risks a proposed business action raises, size the likelihood of the legal risks erupting and the damage that would result, and match the combination of those – the net present likelihood of loss – to the company’s likely benefits from the proposed action.