Often when people picture a legal audit they imagine teams of lawyers in suits marching around with boxes of documents. But, a legal audit isn’t a raid. The best legal audits are unobtrusive. They do not interfere with the day-to-day management of your company.
Companies in heavily regulated industries will need legal audits that go into greater depth than lightly regulated industries. By the same token, a company that has grown quickly or has merged with another company will also need a more in-depth legal audit. Additionally, the scope of a legal audit will also depend on the size and complexity of the company.
Smaller Less Complex Companies
For smaller to mid-sized companies whose structure and business operations are fairly straight forward our attorneys will conduct a detailed legal evaluation of:
- Organizational structure
- Company assets
- Human resource policies, employee handbooks, applications
- Contracts: employment, vendor, sales; as-well-as any other contracts or legal agreements and documentation
- Non-disclosure and non-compete agreements
- Review of trademark and copyright registrations as-well-as licensing agreements
- Shareholder, operating and joint-venture agreements
- Review commercial property and equipment leases
- Review current and past litigation
- Types of insurance and coverage
- Compliance with industry specific regulations
Larger More Complex Companies
For larger, more complex, companies, the first step is determining what area or areas of your operations should be audited. During this step the scope and goals of the audit are identified. The scope of the audit will be based on your industry, past legal issues, and the length of time since your last legal audit.
After the goals and scope of the audit have been agreed upon, the attorney in charge of the audit team will submit an audit plan for your company to review, comment on, and approve. The audit plan will provide a framework that helps you know what to expect and helps focus the efforts of the audit team.
After the plan is approved, the actual legal audit will commence. The audit team will submit questionnaires and Requests for Information (RFI) to specific departments and individuals identified in the plan that may have specific, relevant knowledge or access to key documents. The audit team will also interview some members of the organization.
After collecting all of the requested information, the audit team reviews the documents, questionnaires, and interview responses. Next, the audit team prepares a preliminary report of its findings and presents these to the company.
Sometimes the initial findings will trigger additional questions and may lead to another round of information gathering. This second round is narrower and focused on specific issues.
Lastly, the audit team will present its final report complete with any recommendations for action.