operations and tries to become
involved early on in new initiatives,
such as partnerships and acquisitions.
The efforts paid off after the vice
president of finance left, and she took
over insurance buying.
mitigating the damage.
“They’re both a slightly different
approach to similar problems
operationally,” said Laura Peterson,
chief risk officer — and a trained
attorney — at the University of
Wyoming in Laramie, Wyo.
more claims. An attorney, with an
eye on the strength of the legal case,
might choose to settle.
“If I didn’t understand the business,
I wouldn’t know what to say to our
insurance broker about what we need
to be covered,” she said. “Now, I’m the
primary liaison with our broker.”
Stocklin follows what she
calls a balanced approach to risk
management that accounts for
both the risks and rewards of
business. “Legal is often viewed as a
roadblock,” she said. “So I think it’s
important for people to see that I’m
doing this risk-reward analysis on a
day-to-day basis to understand what’s
best for the company.”
Conflict could arise, however,
over issues such as when to press an
insurer for coverage, Peterson said.
A lawyer might want to fight, while
a risk manager may have an eye on
the costs of outside counsel. On the
other hand, she said, a risk manager
may want to contest a claim, to avoid
setting a precedent and inviting even
Friction also can arise if in-house lawyers focus solely on legal
issues, said Scott Goodreau, chief
sales officer for brokerage HUB
International in Chicago. “What’s
important is for general counsel to
ensure that they understand the fact
that it’s not just about the legal risk,”
he said. “It’s also about the total
impact to the company.”
counsel in the legal department at
Dell Inc., based in Canton, Mass. He
has written and spoken about risk
management for legal audiences.
“The friction is between people
who want to or feel that it’s important
to do risk analysis, and the business-development types that don’t want
to hear it because they don’t want
to hear any naysayers,” Esperne
said. “All they care about is creating
opportunities to generate revenue.”
The greater tension, however,
is not between attorneys and
risk managers, said Eric Esperne,
JOEL BERG is a freelance journalist and
college professor. He can be reached at
At Safway, risk management
gradually migrated from finance to
legal over the last decade, said Curt
Paulsen, who joined the company
in 2003 as its first general counsel.
Based in Waukesha, Wis., Safway
is a scaffolding and worker access
company with branches around
the United States and Canada. The
company also provides industrial
painting and insulation.
And leads you through what lies ahead.
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When Paulsen began, he worked
closely with the company’s CFO on
risk management, which still came
under finance. But after a few years,
risk shifted to the legal department.
A lawyer working under Paulsen now
heads the company’s risk management
department, Paulsen said.
The change stemmed, in part,
from the legal aspects of handling
claims, Paulsen said. But it also
seemed to make sense, given the
growing complexity and importance
of risk management. “That doesn’t
mean that, gee, you need a lawyer
to do it,” he said. “But given its
importance for some entities, I
think it can quite easily, for some
companies, just morph into the legal
Where they don’t have direct
oversight, lawyers often join risk
management teams, and take part in
risk management discussions, said
Dan Cahoy, a business law professor
in the Smeal College of Business at
The Pennsylvania State University in
State College, Pa.
“You could argue that we have
some very special additional legal
complexity that hasn’t existed in the
past, and you’re not going to be able
to quantify it unless you get some
specialized legal knowledge at the
table,” Cahoy said.
But lawyers are not always trained
to make business decisions, Cahoy
added. “So, to the extent that you
bring in a counsel whose answer is
‘no’ 99 percent of the time, that may
not help your business.”
Much depends on the personalities
of the people involved, Cahoy and
others said, but risk managers and
in-house attorneys can learn to work
together, given that their expertise
and their concerns often overlap.
Both departments are charged with
identifying what can go wrong and