Companies globally are becoming increasingly focused on managing risk. To succeed, every organisation must determine the level of risk it is willing to tolerate and make its decisions in keeping with that tolerance.

An in-house legal department has an important role to play in managing its organisation's risks. In-house lawyers are often responsible for identifying existing and emerging risks, advising the organisation on which risks it might be willing to take and which risks to avoid, and protecting the organisation from the foreseen and unforeseen consequences of its risk decisions.

In Practice note, Aligning the legal department with company risk tolerance, the importance of aligning an in-house legal department with it's organisational risk tolerance is discussed in addition to the following key issues:

• The definition of risk management and the reasons for its importance.
• The role an in-house legal department can play in managing its organisation's risk.
• The types of risks typically addressed by in-house legal departments.
• The benefits of aligning a legal department's advice with its organisation's risk tolerance.
• Best practices for a legal department to follow.

For a list of resources on Practical Law related to risk and compliance issues, see Toolkit, Risk and compliance.