Canadian Lawyer InHouse

Law Department Management Assessing risk in-house General counsel find they are increasingly on the front lines of mitigating potential risks to their organizations. By Charlotte Santry The Lac-Mégantic train derailment provides a worst-case example of the business risks, not to mention catastrophic human cost, that can stem from unforeseen events. Nearly 50 people were killed, and the Montreal, Maine and Atlantic Railway Ltd. faces a raft of class action lawsuits. Can disasters be predicted? Not always, but in-house counsel can play an important role in mitigating some of the potential legal, financial, regulatory, and reputational perils faced by their companies. Take the Alberta floods in June, estimated to have cost the province up to $2 billion due to problems such as infrastructure damage and pipeline shutdowns. The scale of the flooding was unprecedented, but even uncontrollable business risks can be mitigated, says Janice Odegaard, senior vice president and general counsel of Canada's largest energy firm Suncor Energy Inc., based in Calgary. "Suncor can't prevent a river from overflowing, but can identify there may be a business continuity risk if there were a disaster that prevented us from accessing premises, or compromised security systems," she says. Equally, companies at the mercy of commodities prices can work through different scenarios, such as a sudden pricing drop, and integrate these into their business plans. Is it an in-house lawyer's role to focus on financial risks? "A lot of risks are very interlinked," Odegaard argues. An operational incident can easily have legal implications. For example, an oil leak could precipitate an environmental, or health and safety, hazard. Being aware of a company's broader business environment is all part of the evolving role of general counsel, she argues. Odegaard monitors potential risks associated with new policies or legislation on the horizon by looking at data provided by industry bodies and speaking with general counsel in other companies. She also has regular discussions with people working across the business, in order to assess the severity of various risks. "Different people may bring their own perspectives to bear and it's really important you have an overall [company] approach," she says. Mary Martin, vice president, general counsel and corporate secretary at Metrolinx, agrees tackling risk in a proactive way that addresses operational issues requires regular discussions with a range of people, including key decision-makers. "Look at it as a team initiative which w w w. c a n a d i a n law y er m a g . c o m / i n h o u s E october 2013 • 35

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