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Unformatted text preview: C HAPTER 3 M ANAGING L EGAL R ISKS Objectives After studying this chapter, you should have an understanding of: methods of managing the legal environment of business the development of a legal risk management plan the importance of anticipating and reacting to developments in the legal environment methods of managing legal services Learning Outcomes Understand how a business can manage its interaction with the law and legal issues (page 62) Understand the impact of changes in the legal environment on the business (page 50) Develop and implement a legal risk management plan for a business (page 50) Understand how a business can manage legal services (page 63) Chapter Summary A business must manage the present and plan for the future in all areas of its activities, including the legal environment. Legal problems that have not been anticipated can be costly, distracting and harmful. Legal risk management involves the identification and evaluation of legal risks. To limit exposure to such risks, a business can choose to avoid certain risks, reduce some risks, accept particular risks, and transfer some risks to other parties through contracts. The implementation of all of these decisions should be clearly explained in a legal risk management plan. Even the best advance planning cannot prevent all legal problems. A comprehensive plan should provide an effective method of dealing with unexpected events. The decision to obtain legal services must be made in a timely fashion. Managing legal services involves the identification of required legal services and the best method of obtaining those services. Study Outline Use this outline to prepare a complete set of notes for this chapter. Assessing the Legal Environment page 49 ______________________________________________________________________ ______________________________________________________________________ Legal risk management plan ______________________________________________ ______________________________________________________________________ 2008 BY NELSON, A DIVISION OF THOMSON NELSON LTD. .PART 1: THE LEGAL ENVIRONMENT OF BUSINESS Applying the Four-Step Process 1. Identify the Legal Risks page 51 ______________________________________________________________________ ______________________________________________________________________ Assess functional areas ___________________________________________________ Accounting _________________________________________________________ ______________________________________________________________________ Finance __________________________________________________________ ______________________________________________________________________ Marketing __________________________________________________________ ______________________________________________________________________ Production __________________________________________________________ ______________________________________________________________________...
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