In-House Counsel

Deeper knowledge of the law and its possible effect on risk aversion

By Rees Morrison

Frank Furedi, Where Have All the Intellectuals Gone: Confronting 21st Century Philistinism (Continuum 2004) at 57, cites to two sociologists who "forcefully argue the case for the close association between the sense of risk and the increase of knowledge." As lawyers gain experience and legal knowledge, they read about and bump into examples of risks. They become more and more aware of all the things that can go wrong. To protect against what they know some become risk averse.

In other words, their agreements grow longer because each risk they encounter gets baked in and they never simplify or drop a protective paragraph lest they be blamed for not taking precautions against the adverse potentiality. The more law you know, the more legal risks loom in the shadows.

Perhaps. Yet knowledge can build confidence. Increased expertise and experience prepare a lawyer to assess the likelihood of a risk happening and the magnitude of its consequences. Knowledge begets judgment and you can shrug off the possibility of a meteorite destroying the shipment. Bigger law departments can sustain more specialization and more knowledge, yet their costs go down. They are not paralyzed by the panoply of imaginable risks but with their accumulated legal experience deal realistically with what may reasonably happen.

Full post as published by Law Department Management on October 11, 2008 (boomark / email).