casemark/risk-assessment

Legal Risk Assessment

Produces executive-ready risk reports evaluating likelihood, impact, and mitigation across legal risk categories for business scenarios, transactions, or operational decisions.

Prerequisites

Gather before starting:

• Scenario description — transaction summary, venture details, or decision under review
• Source documents — contracts, term sheets, regulatory filings, corporate records
• Organizational context — industry, jurisdiction(s), risk tolerance, strategic objectives
• Known constraints — timeline, budget, regulatory environment, stakeholder concerns

Workflow

1. Document Review

Extract from all provided materials:

| Element | Look For | |---|---| | Obligations & duties | Performance requirements, deadlines, conditions precedent | | Representations & warranties | Scope, survival periods, indemnification triggers | | Financial exposure | Stated amounts, penalties, liquidated damages | | Jurisdictional issues | Choice of law, forum selection, regulatory bodies | | Notice & cure provisions | Timelines, methods, non-compliance consequences | | Ambiguous or silent terms | Missing definitions, unclear risk allocation, gaps |

2. Risk Identification

Categorize all material risks:

| Category | Key Inquiry | |---|---| | Regulatory compliance | Licensing, permits, reporting, pending rule changes | | Contractual liability | Breach exposure, indemnification chains, liability gaps | | Litigation probability | Dispute history, enforceability, venue risk | | IP vulnerability | Ownership disputes, licensing gaps, infringement exposure | | Employment & labor | Classification, non-competes, WARN Act, benefits | | Tax implications | Structure-dependent exposure, transfer pricing, nexus | | Reputational & governance | Fiduciary duties, disclosure obligations, ESG |

3. Risk Scoring

Rate each risk on a 5x5 matrix. Rating = Likelihood x Impact.

Likelihood: 1 Remote — 2 Unlikely — 3 Possible — 4 Likely — 5 Near certain

Impact: 1 Negligible (<$50K) — 2 Minor ($50K–$500K) — 3 Moderate ($500K–$5M) — 4 Major ($5M–$50M) — 5 Severe (>$50M)

Thresholds: Low (1–6), Medium (7–12), High (13–19), Critical (20–25)

4. Mitigation Strategies

For each Medium/High/Critical risk, propose mitigations and assess feasibility, cost, and residual risk:

| Strategy | Examples | |---|---| | Eliminate | Restructure transaction, remove problematic terms | | Transfer | Insurance, indemnification, contractual risk allocation | | Reduce | Compliance protocols, enhanced due diligence, reps & warranties | | Accept | Document rationale, establish reserves, monitor triggers |

5. Gap Analysis

Flag explicitly:

• Missing documents or facts affecting risk precision
• Unsettled legal standards or pending regulatory changes
• Recommended due diligence steps or expert consultations

Output Structure

## Executive Summary
- 3–5 sentence risk posture overview
- Top 3 risks with ratings
- Go / No-Go / Conditional recommendation

## Risk Matrix
[Table: Risk | Category | Likelihood | Impact | Rating | Key Driver]

## Detailed Risk Analysis
### [Risk Category]
#### [Specific Risk]
- **Exposure**: factual basis with document references
- **Legal basis**: applicable statute or case law
- **Likelihood rationale**: enforcement trends, precedent
- **Impact quantification**: dollar range, operational consequences
- **Mitigation options**: ranked by effectiveness

## Information Gaps & Limitations
[Bulleted list with recommended next steps]

## Recommendations
- Numbered, actionable items tied to specific risks
- Prioritized by risk rating and feasibility
- Decision framework: proceed / modify / decline

Checks

• Reference specific contract sections, statutes, and facts — no generic risk language
• Quantify exposure with dollar ranges; acknowledge uncertainty explicitly
• Calibrate recommendations to the organization's stated risk tolerance
• Distinguish deal-breakers from commercially acceptable risks
• Mark unverifiable authority with [VERIFY]
• Do not minimize risks to favor a preferred outcome
• Note jurisdiction-specific variations where U.S. state law divergence is material
• Keep the executive summary accessible to non-lawyers