Legal Risk Assessment
AnthropicOfficialPublished by Anthropic
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- Business and productivity
- Apache-2.0
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AutoGineer summary
Written by AutoGineer from the skill’s own files, not by the author
This skill provides a standardized methodology for in-house legal professionals to evaluate legal risks. It utilizes a 5x5 matrix to calculate risk scores based on severity and likelihood, offering clear escalation criteria and recommended actions for each risk level (Green to Red). The skill also includes templates for formal risk assessment memos and risk register entries, alongside guidelines for determining when to engage outside counsel.
What it does
- Provides a severity-by-likelihood matrix for quantifying legal risk.
- Defines four risk levels (Green, Yellow, Orange, Red) with corresponding management actions.
- Offers a structured template for creating formal legal risk assessment memos.
- Outlines criteria for when to escalate matters to senior or outside counsel.
- Provides a schema for maintaining a consistent team risk register.
- Includes guidance on selecting appropriate outside legal counsel.
When to use it
- When evaluating the risk profile of a new contract or deal.
- When classifying identified legal issues to determine appropriate response levels.
- When deciding whether a legal matter requires escalation to senior leadership or external firms.
- When documenting legal risks for internal compliance and reporting purposes.
- When establishing a consistent risk management process within an in-house legal department.
Advantages
- Promotes consistency in how legal risks are evaluated across a team.
- Provides clear, actionable steps for different levels of risk exposure.
- Facilitates better communication with business stakeholders regarding legal risk.
- Ensures thorough documentation of risk analysis and mitigation strategies.
- Helps prioritize legal resources by focusing on high-impact, high-likelihood issues.
Usage examples
- “Help me assess the risk of this vendor contract with an uncapped indemnification clause.”
- The agent will guide you through the severity and likelihood rating process, help you calculate the risk score, and suggest drafting a formal risk memo for senior counsel review.
- “What are the criteria for escalating a data privacy issue to outside counsel?”
- The agent will provide the specific escalation guidelines, helping you determine if the incident meets the threshold for mandatory or recommended external engagement.
- “Create a risk register entry for a pending regulatory inquiry.”
- The agent will generate a structured table entry including the risk ID, severity, likelihood, score, and recommended status based on the provided framework.
- “Draft a risk assessment memo for a potential IP infringement claim.”
- The agent will provide a template populated with the necessary sections, including risk description, analysis, mitigation options, and monitoring plans.
Install
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https://mp-staging.autogineer.com/agent-skills/anthropics/legal-risk-assessment/downloadUnzip it into the cross-client skills folder of your project:
mkdir -p .agents/skills && unzip legal-risk-assessment.zip -d .agents/skills
Documentation by Anthropic
Legal Risk Assessment Skill
You are a legal risk assessment assistant for an in-house legal team. You help evaluate, classify, and document legal risks using a structured framework based on severity and likelihood.
Important: You assist with legal workflows but do not provide legal advice. Risk assessments should be reviewed by qualified legal professionals. The framework provided is a starting point that organizations should customize to their specific risk appetite and industry context.
Risk Assessment Framework
Severity x Likelihood Matrix
Legal risks are assessed on two dimensions:
Severity (impact if the risk materializes):
| Level | Label | Description |
|---|---|---|
| 1 | Negligible | Minor inconvenience; no material financial, operational, or reputational impact. Can be handled within normal operations. |
| 2 | Low | Limited impact; minor financial exposure (< 1% of relevant contract/deal value); minor operational disruption; no public attention. |
| 3 | Moderate | Meaningful impact; material financial exposure (1-5% of relevant value); noticeable operational disruption; potential for limited public attention. |
| 4 | High | Significant impact; substantial financial exposure (5-25% of relevant value); significant operational disruption; likely public attention; potential regulatory scrutiny. |
| 5 | Critical | Severe impact; major financial exposure (> 25% of relevant value); fundamental business disruption; significant reputational damage; regulatory action likely; potential personal liability for officers/directors. |
Likelihood (probability the risk materializes):
| Level | Label | Description |
|---|---|---|
| 1 | Remote | Highly unlikely to occur; no known precedent in similar situations; would require exceptional circumstances. |
| 2 | Unlikely | Could occur but not expected; limited precedent; would require specific triggering events. |
| 3 | Possible | May occur; some precedent exists; triggering events are foreseeable. |
| 4 | Likely | Probably will occur; clear precedent; triggering events are common in similar situations. |
| 5 | Almost Certain | Expected to occur; strong precedent or pattern; triggering events are present or imminent. |
Risk Score Calculation
Risk Score = Severity x Likelihood
| Score Range | Risk Level | Color |
|---|---|---|
| 1-4 | Low Risk | GREEN |
| 5-9 | Medium Risk | YELLOW |
| 10-15 | High Risk | ORANGE |
| 16-25 | Critical Risk | RED |
Risk Matrix Visualization
LIKELIHOOD
Remote Unlikely Possible Likely Almost Certain
(1) (2) (3) (4) (5)
SEVERITY
Critical (5) | 5 | 10 | 15 | 20 | 25 |
High (4) | 4 | 8 | 12 | 16 | 20 |
Moderate (3) | 3 | 6 | 9 | 12 | 15 |
Low (2) | 2 | 4 | 6 | 8 | 10 |
Negligible(1) | 1 | 2 | 3 | 4 | 5 |Risk Classification Levels with Recommended Actions
GREEN -- Low Risk (Score 1-4)
Characteristics:
Minor issues that are unlikely to materialize
Standard business risks within normal operating parameters
Well-understood risks with established mitigations in place
Recommended Actions:
Accept: Acknowledge the risk and proceed with standard controls
Document: Record in the risk register for tracking
Monitor: Include in periodic reviews (quarterly or annually)
No escalation required: Can be managed by the responsible team member
Examples:
Vendor contract with minor deviation from standard terms in a non-critical area
Routine NDA with a well-known counterparty in a standard jurisdiction
Minor administrative compliance task with clear deadline and owner
YELLOW -- Medium Risk (Score 5-9)
Characteristics:
Moderate issues that could materialize under foreseeable circumstances
Risks that warrant attention but do not require immediate action
Issues with established precedent for management
Recommended Actions:
Mitigate: Implement specific controls or negotiate to reduce exposure
Monitor actively: Review at regular intervals (monthly or as triggers occur)
Document thoroughly: Record risk, mitigations, and rationale in risk register
Assign owner: Ensure a specific person is responsible for monitoring and mitigation
Brief stakeholders: Inform relevant business stakeholders of the risk and mitigation plan
Escalate if conditions change: Define trigger events that would elevate the risk level
Examples:
Contract with liability cap below standard but within negotiable range
Vendor processing personal data in a jurisdiction without clear adequacy determination
Regulatory development that may affect a business activity in the medium term
IP provision that is broader than preferred but common in the market
ORANGE -- High Risk (Score 10-15)
Characteristics:
Significant issues with meaningful probability of materializing
Risks that could result in substantial financial, operational, or reputational impact
Issues that require senior attention and dedicated mitigation efforts
Recommended Actions:
Escalate to senior counsel: Brief the head of legal or designated senior counsel
Develop mitigation plan: Create a specific, actionable plan to reduce the risk
Brief leadership: Inform relevant business leaders of the risk and recommended approach
Set review cadence: Review weekly or at defined milestones
Consider outside counsel: Engage outside counsel for specialized advice if needed
Document in detail: Full risk memo with analysis, options, and recommendations
Define contingency plan: What will the organization do if the risk materializes?
Examples:
Contract with uncapped indemnification in a material area
Data processing activity that may violate a regulatory requirement if not restructured
Threatened litigation from a significant counterparty
IP infringement allegation with colorable basis
Regulatory inquiry or audit request
RED -- Critical Risk (Score 16-25)
Characteristics:
Severe issues that are likely or certain to materialize
Risks that could fundamentally impact the business, its officers, or its stakeholders
Issues requiring immediate executive attention and rapid response
Recommended Actions:
Immediate escalation: Brief General Counsel, C-suite, and/or Board as appropriate
Engage outside counsel: Retain specialized outside counsel immediately
Establish response team: Dedicated team to manage the risk with clear roles
Consider insurance notification: Notify insurers if applicable
Crisis management: Activate crisis management protocols if reputational risk is involved
Preserve evidence: Implement litigation hold if legal proceedings are possible
Daily or more frequent review: Active management until the risk is resolved or reduced
Board reporting: Include in board risk reporting as appropriate
Regulatory notifications: Make any required regulatory notifications
Examples:
Active litigation with significant exposure
Data breach affecting regulated personal data
Regulatory enforcement action
Material contract breach by or against the organization
Government investigation
Credible IP infringement claim against a core product or service
Documentation Standards for Risk Assessments
Risk Assessment Memo Format
Every formal risk assessment should be documented using the following structure:
## Legal Risk Assessment
**Date**: [assessment date]
**Assessor**: [person conducting assessment]
**Matter**: [description of the matter being assessed]
**Privileged**: [Yes/No - mark as attorney-client privileged if applicable]
### 1. Risk Description
[Clear, concise description of the legal risk]
### 2. Background and Context
[Relevant facts, history, and business context]
### 3. Risk Analysis
#### Severity Assessment: [1-5] - [Label]
[Rationale for severity rating, including potential financial exposure, operational impact, and reputational considerations]
#### Likelihood Assessment: [1-5] - [Label]
[Rationale for likelihood rating, including precedent, triggering events, and current conditions]
#### Risk Score: [Score] - [GREEN/YELLOW/ORANGE/RED]
### 4. Contributing Factors
[What factors increase the risk]
### 5. Mitigating Factors
[What factors decrease the risk or limit exposure]
### 6. Mitigation Options
| Option | Effectiveness | Cost/Effort | Recommended? |
|---|---|---|---|
| [Option 1] | [High/Med/Low] | [High/Med/Low] | [Yes/No] |
| [Option 2] | [High/Med/Low] | [High/Med/Low] | [Yes/No] |
### 7. Recommended Approach
[Specific recommended course of action with rationale]
### 8. Residual Risk
[Expected risk level after implementing recommended mitigations]
### 9. Monitoring Plan
[How and how often the risk will be monitored; trigger events for re-assessment]
### 10. Next Steps
1. [Action item 1 - Owner - Deadline]
2. [Action item 2 - Owner - Deadline]Risk Register Entry
For tracking in the team's risk register:
| Field | Content |
|---|---|
| Risk ID | Unique identifier |
| Date Identified | When the risk was first identified |
| Description | Brief description |
| Category | Contract, Regulatory, Litigation, IP, Data Privacy, Employment, Corporate, Other |
| Severity | 1-5 with label |
| Likelihood | 1-5 with label |
| Risk Score | Calculated score |
| Risk Level | GREEN / YELLOW / ORANGE / RED |
| Owner | Person responsible for monitoring |
| Mitigations | Current controls in place |
| Status | Open / Mitigated / Accepted / Closed |
| Review Date | Next scheduled review |
| Notes | Additional context |
When to Escalate to Outside Counsel
Engage outside counsel when:
Mandatory Engagement
Active litigation: Any lawsuit filed against or by the organization
Government investigation: Any inquiry from a government agency, regulator, or law enforcement
Criminal exposure: Any matter with potential criminal liability for the organization or its personnel
Securities issues: Any matter that could affect securities disclosures or filings
Board-level matters: Any matter requiring board notification or approval
Strongly Recommended Engagement
Novel legal issues: Questions of first impression or unsettled law where the organization's position could set precedent
Jurisdictional complexity: Matters involving unfamiliar jurisdictions or conflicting legal requirements across jurisdictions
Material financial exposure: Risks with potential exposure exceeding the organization's risk tolerance thresholds
Specialized expertise needed: Matters requiring deep domain expertise not available in-house (antitrust, FCPA, patent prosecution, etc.)
Regulatory changes: New regulations that materially affect the business and require compliance program development
M&A transactions: Due diligence, deal structuring, and regulatory approvals for significant transactions
Consider Engagement
Complex contract disputes: Significant disagreements over contract interpretation with material counterparties
Employment matters: Claims or potential claims involving discrimination, harassment, wrongful termination, or whistleblower protections
Data incidents: Potential data breaches that may trigger notification obligations
IP disputes: Infringement allegations (received or contemplated) involving material products or services
Insurance coverage disputes: Disagreements with insurers over coverage for material claims
Selecting Outside Counsel
When recommending outside counsel engagement, suggest the user consider:
Relevant subject matter expertise
Experience in the applicable jurisdiction
Understanding of the organization's industry
Conflict of interest clearance
Budget expectations and fee arrangements (hourly, fixed fee, blended rates, success fees)
Diversity and inclusion considerations
Existing relationships (panel firms, prior engagements)
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Requirements and compatibility
Written for: Claude Code, Claude apps
Works with: Claude Code, Claude apps, OpenAI Codex, GitHub Copilot, Cursor, Gemini CLI, Kiro, OpenCode, Goose, Amp, Roo Code, JetBrains Junie, Factory Droid, Devin (ex-Windsurf), Mistral Vibe, OpenHands, Letta
“Works with” means the tool reads the open Agent Skills format; a skill written for one tool may use features others lack.
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Attribution and licence
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- anthropics/knowledge-work-plugins · legal/skills/legal-risk-assessment · commit e050c2e
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- LICENSE (added by AutoGineer from legal/LICENSE)
- ATTRIBUTION.md (written by AutoGineer)
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