How can a legal risk audit help Irish SMEs procure funding?
Key stakeholders (e.g. banks, shareholders, investors, potential investors and government granting authorities) are reassured by the fact that a business is confident enough to take ownership of, and proactively deal, with its legal risks by carrying out a legal risk audit and taking steps to deal with the outcomes.
A 2018 big red cloud survey revealed that the biggest worry for Irish start-ups and SMEs was access to funding to grow their businesses. The second biggest issue they had related to regulatory and compliance concerns, a legal risk audit is an essential component in dealing with both of these issues.
Regulatory and compliance concerns are understandable in the current environment, many businesses operate in heavily regulated areas and some are still grappling with GDPR or worried about whether their health and safety and/or employee procedures are up to date and compliant. Stakeholders will have greater faith in a business which tackles its regulatory and compliance issues head on and will be more likely to provide funding to it.
How does a legal risk audit work?
You will need to identify and engage a law firm who understands how businesses work and the challenges they face (preferably one who has lawyers who have previously worked inhouse) and who will partner with you to come up with solutions.
Once you have identified the right law firm to partner with, they will meet with your people onsite (e.g. CEO, Head of Finance, Head of Products, Head of Sales, Head of Procurement, Head of HR etc) to determine the challenges and concerns in each area and to agree the scope of the audit. Working onsite during the audit will allow your law firm get a greater understanding of how the business works and to develop good working relationships with your team.
Once the risks have been identified, your law firm will work with you to develop written strategies to reduce, mitigate and avoid identifiable risks, as well as assist you with implementing those strategies.
On completion of a legal risk audit, your business will be in a position to:
Forewarned is forearmed! Having tackled the legal risks facing your business means that you are much more in control and can make informed decisions to reduce liability and exposure to financial loss as a result.
You will be able to reassure key stakeholders that you have taken control of your business’s legal risks and taken steps to mitigate that risk, allowing your business to focus on achieving its commercial goals.
You will be up to date with current and emerging legal trends and risks associated with your industry.
You will gain valuable insight into best practices for managing risk and identifying issues/threats early on.