Risk Management and the Legal Field
Risk also involves much more, though. The chance of major impacts ð€“ especially negative impacts ð€“ always exists. The consequences are harsh, says Barnes. Poor risk management jeopardizes the future of a company and as we"ve seen in recent years, can result in major downsizing and loss of shareholder value. Companies are turning the corner and are now hoping to begin the hiring process again and nothing can prevent that from happening faster than poor risk management. Some attorneys spend the lion"s share of their days in an effort of making some of the most educated executives understand that harsh reality. The LawCrossing.com founder says a few of the ways poor risk management can affect a business includes:*Trading loss and stolen assets
*Human error in fund transfers or contract errors ð€“ either accidental or fraudulently
*Brand erosion
*Loss of market share
*Leaks of proprietary information
*Increasing costs of doing business (including climbing insurance premiums as one example)
*Lost opportunities due to antiquated technologies
*Data security and compromises
*Credit risks; and even
*Political risks
While it may seem overwhelming (after all, that"s what your lawyers are there for), A. Harrison Barnes points out that this is a golden opportunity to see those vulnerabilities and make improvements. A proper risk management analysis allows a company to really take a hard look from a different perspective. Gaining a competitive edge is important and if you can do that while also cementing your company in its sector, you"ve created a strong foundation that should weather any recession or economic downturn.
It"s for these reasons choosing the right legal team is so crucial. Many companies are bringing on board chief risk officers, or CROs to serve as a liaison between the company lawyers and the company executives to ensure a smooth flow of information. Many CROs are attorneys and have a unique perspective in that they see both sides.
Finally, another important reason to stay on top of your risk strategies is the ever changing compliance issues. Both state and federal regulations change on a dime. The vast majority of company officials have no idea when these changes occur. A risk management team devised of lawyers who specialize in this area is your best protection against unplanned attacks.