Benefits of Risk

Say “Risk” to many lawyers and their faces contort with panic. Then the professional training kicks in with a visible sense of relief. Risk is what “business people” do: a commercial issue: a NMP (“Not My Problem”).

OK, so perhaps I am being provocative, as I know that many lawyers do not have such a simplistic approach. Many lawyers are more sensitive to the subtleties of risk taking. We know that risks can be managed, mitigated and their impact softened. The thing that many lawyers that I speak to can shake thing, that is that risk has negative consequences.

By approaching risk in a negative way, it creates a perception that the lawyers are negative. So many business colleagues bestow such soubriquets as “Dr No”, “Deal Stoppers” and the “Contracts Prevention Unit on us.

We need to have a fresh approach to understanding risk. Risk can be embraced positively. Profit is the reward for taking risks.

Good risk management is all about having a healthy relationship with risk taking. If you have an informed approach, you will be able to take risks that yield real benefits for you and your organisation.

Without a healthy relationship, you will not succeed in the commercial world. Being successful in unlocking the benefits through good risk taking is a way in which lawyers can prove their value to their organisations.

Being able to use risk management tools such as risk registers, root cause analysis, “near miss” recording in a legal context all add to enhanced corporate value. Understanding the four factors in risk management – appetite, tolerance, incidence and impact are vital for the modern in-house lawyers.

So don’t be the one with the look of panic. Be the one who shows that you understand that there are benefits to be had from risks in a considered way. You never know, you may end up enjoying it.

For Ian’s latest article on risk management, see “InsideOut” the Law Society Magazine for In House Lawyers. To learn more about risk management, you can also attend one of Ian’s seminars.

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