The business owns legal issues

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The Devil’s Advocate


In which the curmudgeonly old sod puts the world to rights.

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Ignorantia juris non excusat.

A founding, fundamental point, but one lost in our disintermediated, siloed age: the ultimate owner of legal risk is not legal, but the business. Legal simply advises the business on the legal risk.

Some counterintuitive implications of this:

  • The business should make legal calls within normal operating parameters (the “BAU”), as it is responsible should it get them wrong, the same way you are responsible if you accidentally shoplift, or drive on the wrong side of the road. Your lawyer doesn’t go to jail; you do.
  • The business should read the whole contract. Yes, the whole contract. Like, what? Sure. You are taking responsibility for everything in it, after all (see above). Why wouldn’t you read it? Are you just going to take it on faith from the legal eagles? There is room here for an extended essay on “how things have got to this pretty pass, in which a business person with a decent liberal education is yet not not reasonably capable of understanding a legal contract” — and rent-seeking legal eagles do play a role in that story, but we will save it for another day.
  • The business should therefore know not just the known knowns [1] but also the known unknowns and to be aware, and responsible for, the unknown unknowns. Only where you encounter a known unknown should the business get on the phone to legal, but the outcome of that advice is for the business to acquire another known known.

See also

References

  1. And the unknown knowns, but QED it does not know those. Such is the imperfect state of the world, my friends.