Risk is a vast and vitally important topic. We shall return to it periodically, but for now, this series is our primer. Like many hot buttons, the perspective on risk differs according to who you ask. We start with the client view of risk, then we'll examine it from the law firm side, before moving on to support sectors like insurers and funders. Our wrap-up lesson will also discuss the big disrupter — technology. 

In Lean Adviser, when we talk about the importance of specializing in your client, we always stress the need to understand your client's risk appetite. In this lesson, we dig into that a little deeper. There are two elements to this: 1) the organization's view of the risks it faces — often referred to as "enterprise risk tolerance"; and 2) the personal risk appetite of the GC. Whilst these will overlap, they are not the same.

Let's start with enterprise risks and tolerances. These vary significantly from sector-to-sector and even client-to-client. Insurer clients are in the risk business, pharma clients are not. Every client, in its own way, has to balance its risk tolerance with its business objectives. How they do this will depend on a number of very client-specific factors, including their business culture, the organization's goals, their risk management capability and the perceived cost and benefits. Ask the right questions, reflect on what you learn and incorporate it into your advice.

What about the General Counsel? As we have noted in these discussions, the key areas of concern for the GC are generally the same unholy trinity: 1) regulatory risk; 2) litigation risk; and 3) reputational risk. Which is the biggest of these? GCs tell us that it's always regulatory risk, and they have the task of helping the business navigate the risks implicated by ever-evolving regulations. This is the stuff of sleepless nights.

We cannot overstate the importance of understanding the plight of the GC in this predicament, and the value of offering relevant support. This challenge is so difficult, and so unlike the outside counsel view of risk, that many businesses who take in-house lawyers from private practice have to retrain them on how to think about risk.

It's hardly surprising, therefore, that when it comes to the GC's own personal position, there is only one risk that matters — repercussion risk. In every scenario, every GC asks themselves the same question: where does this come back to me? When it comes to repercussion risk, the GC's appetite is always the same. None. Engrave this on your desk; whatever happens in this assignment, this does not come back to the GC.