Pre-existing risks should not be ignored by in-house counsel during the pandemic, writes Tim Wilbur
It is head spinning to think how many priorities in-house counsel must balance during the pandemic. Whether they are heading a grocery chain while business is running full steam, are in commercial real estate and have unpaid bills piling up or are retooling from beer to hand sanitizer, the legal and business challenges can seem endless.
Chris Harrs at Spin Master, with whom we spoke for our cover story this month, describes COVID-19 as the greatest single risk factor that’s arisen in his working lifetime. Prior to COVID, his legal department had narrowed Spin Master’s 131 global risks down to 17 key priorities. After COVID hit, its key priorities doubled to 32.
While the pandemic can seem all-consuming, pre-existing risks should also not be ignored by in-house counsel.
Shawn Neylan, a lawyer with Stikeman Elliott LLP, warns companies entering into government agreements to retool their operations to produce health-care supplies that they also need to be aware that they may be subject to greater scrutiny for future foreign investment.
“In-house counsel need to think about this and not sleep-walk into a problem when they take on something, and then realize it’s going cause them a big issue in M&A transactions down the road,” says Neylan in our Industry Spotlight on manufacturing.
Experts in white collar crime also point to the heightened risk when in-house counsel are distracted with crisis management. “The regulatory environment will swing back to more active investigations and you won’t be able to sweep things under the rug because of COVID. Those that try will risk compliance issues,” says Lincoln Caylor at Bennett Jones LLP in our White Collar Crime feature.
And financial disclosure obligations are still ongoing, even if business is booming. “Disclosure obligations don’t go away just because of COVID,” says Nick Henn at Loblaw Companies Ltd. in our GC Profile.
In other words, in-house counsel just started doubling the number of balls they need to juggle. While the new balls are important to address, the ones they were keeping in the air before the pandemic hit cannot be dropped. If they are, in-house counsel risk dropping them all.