Risk taxonomy

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A fine occupation for the idle lawyer: Describing, and grouping in relation to each other, the entire catalog of risks that face your undertaking, as if unrealised legal hazards can be ranked, boxed and sorted like the phyla of butterflies, tits or thrush.

This exercise can occupy as little — a breakout session on an away-day — or as much — the permanent task of a dedicated division in the department — of your firm's intellectual capacity as you have going spare: organisations that run to the bureaucratic may become so swooned by this notion that they can find little time to do anything else. For how can one asses the risks of a transaction if one doesn't know from which family of what genus in what species it hails?

The problem with risk taxonomies

Jolly Contrarian has two reservations about risk taxonomies:

The false comfort blanket

Any taxonomy, like a map, can only document the territory you know, have raked over, surveyed and measured. Stables from which the horse has bolted, so to say. This is of a piece with the common lawyer’s usual mode of reasoning, the doctrine of precedent, whose organising principle is to move forward by exclusive reference to what lies behind.

See also

• Black swan
• Doctrine of precedent