Legal risk assessment

Legal Risk Assessment — Risk Assessor

"Flag legal risk"

Turns "this feels risky" into a scored, sorted register with owners and tripwires. Works from a description of the situation plus any documents provided.

When to use

• "What's our exposure if we sign this?" — deal downside read
• "How risky is operating without a signed DPA for a quarter?"
• "Rank the legal risks of this expansion plan"
• Before an exec or board commit on a contested move
• Clause-level contract surgery belongs to review-contract; this skill scores the whole situation

Workflow

1. Frame the situation: the decision at stake, timeline, jurisdictions, counterparties, and what "bad" concretely looks like for the business.
2. Enumerate risks across the standard surfaces — contractual, regulatory, IP, privacy and data, employment, litigation, reputational-with-legal-consequence. Each risk is a concrete event ("residuals clause lets the vendor reuse our roadmap"), never a category name ("IP risk").
3. Score each risk: impact 1-5 (1 = nuisance cost … 5 = company-changing) × likelihood 1-5 (1 = remote … 5 = expected). Score = impact × likelihood, with a one-line rationale per score — unexplained numbers are guesses.
4. Render the heat map sorted by score, descending.
5. Attach a mitigation to every risk at or above threshold (default: score ≥ 8, overridable): the action, its owner, and the residual score once done.
6. Define escalation criteria — observable conditions that send this to human counsel immediately (e.g., any impact-5 risk, regulator contact, a litigation threat received, press involvement).
7. Set monitoring triggers: events that reopen the assessment ("counterparty misses a payment", "new guidance published on X"), each with a named watcher.
8. Deliver the dated register and a one-sentence bottom line: proceed, proceed with mitigations, or do not proceed.

Output format

LEGAL RISK REGISTER — <matter> — <date>
Decision at stake: <one line>   Mitigation threshold: score ≥ 8

HEAT MAP (sorted by score)
| # | Risk (concrete event) | Impact (1-5) | Likelihood (1-5) | Score | Rationale  |
|---|-----------------------|--------------|------------------|-------|------------|
| 1 | <risk>                | 4            | 4                | 16    | <one line> |
| 2 | <risk>                | 5            | 2                | 10    | <one line> |
| 3 | <risk>                | 2            | 3                | 6     | <one line> |

MITIGATIONS (score ≥ threshold)
| Risk # | Mitigation action | Owner | Residual score |
|--------|-------------------|-------|----------------|
| 1      | <action>          | <who> | <I × L after>  |

ESCALATE TO HUMAN COUNSEL IMMEDIATELY IF
- <observable condition>
- <observable condition>

MONITORING TRIGGERS
- <event> → reassess risk #<n> — watcher: <who>

BOTTOM LINE: <proceed / proceed with mitigations / do not proceed> — <one sentence why>

*Issue-spotting support, not legal advice — engage counsel for binding decisions.*

Quality bar

• Every risk is a concrete event, not a category label
• Every score carries a one-line rationale — no bare numbers
• Every risk at or above threshold has a mitigation, an owner, and a residual score
• Escalation criteria are observable conditions, not judgment calls
• Register is dated and every monitoring trigger names a watcher
• Bottom line commits to one recommendation

Example

Invocation: "We're about to sign a 3-year exclusive distribution deal in a market we've never operated in. Exposure?"

Produces: A register of seven risks. Top score 16: exclusivity lock-in with no minimum-performance exit (impact 4 × likelihood 4), mitigated by a termination-for-underperformance clause (residual 8). Escalation fires if the counterparty demands a non-compete covering existing markets; monitoring trigger on quarterly sales versus floor, watched by the deal owner. Bottom line: proceed with mitigations.

Issue-spotting support, not legal advice — engage counsel for binding decisions.