What is Legal Risk Management?

Effective legal risk management involves the development of suitable strategies to proactively control legal risks and opportunities.  Legal risk management has become an ever increasing vital component of every business. The key object of legal risk management is to aid businesses in avoiding operational risks becoming legal liabilities.

Legal risk management is best used when its purpose is to identify, analyse and manage legal risks affecting a specific business in a organized and consistent way. An example of a legal risk is the circumstances which could arise when entering into supply contracts, whereby the business engages services or products to be provided by an external third party.

It has the potential to affect all areas of business and is the concern of every employee, shareholder and stakeholder in an organisation.

Why is it beneficial to a business?

Legal risk management is vital to any business as it can remove any uncertainties in relation to the business operation of an entity, thereby preventing legal liability in the future. An effective legal risk management program will ensure that the business can avoid costs associated with any financial risks.


  • identify legal threats and opportunities;
  • circulate legal knowledge;
  • put into practice legal risk controls; and
  • provide measures of prevention success.

With a strong risk management progress in place, businesses have the capability to decrease their financial and legal exposures and are in a superior position to make clear and well informed business decisions.

Joe Kafrouni, Legal Practitioner Director, Kafrouni Lawyers


The information provided by Kafrouni Lawyers is intended to provide general information and is not legal advice or a substitute for it. Business people should always consult their own legal advisors to discuss their particular circumstances. Kafrouni Lawyers makes no warranties or representations regarding the information and exclude any liability which may arise as a result of the use of this information. This information is the copyright of Kafrouni Lawyers.

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