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Linklaters

Risk Advisory

 

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Our Global Risk Advisory practice supports clients in managing and mitigating legal and compliance risks from end to end. Our blended team of lawyers and risk, compliance and operational experts work closely to help clients not only to understand what the law requires, but also how to implement the law into their business operations.

This integrated approach helps ensure policies, procedures and controls are regulatory compliant, operationally effective and address gaps where compliance processes might lack sound legal input. It also reduces the risk of compliance failures which may have arisen from the siloed nature of legal and consulting advice and provides a “safe space” to discuss weaknesses in existing processes under legal protection, where appropriate.

Our services

An increasingly complex and uncertain risk and regulation landscape requires a proactive, holistic approach to governance, risk and compliance. Our solutions play into four key pillars of risk - all of which are interconnected.

Challenges

Complex regulations and unprecedented regulatory disharmony significantly increase the challenge of aligning regulatory compliance across jurisdictions. A proactive and coordinated cross-border approach to managing legal and regulatory risk is therefore critical.

The scale and complexity of financial crime (including money laundering / terrorist financing, bribery and corruption, fraud, sanctions breaches, tax evasion and market abuse) continues to increase. Effectively managing financial crime risk remains a key priority area for all sectors.

Risk Advisory solutions

We collaborate with other Linklaters practices, in particular the Financial Regulation Group and Litigation Arbitration and Investigation team to help our clients:

  • Implement and enhance robust governance, compliance and risk management frameworks with clear tone from the top, accountability, and oversight.
  • Evaluate, manage and mitigate multiple existing and emerging risks in relation to financial regulatory compliance and financial crime, and identify dependencies across business teams and jurisdictions e.g. definition of materiality.
  • Differentiate between jurisdictional and global requirements and implement regulatory changes into operational controls consistently and proportionately.

Challenges

Digital transformation involves significant change and gives rise to multiple risks.

AI regulation is developing quickly and the wide range of use cases from supply chain to internal functions to customer facing activities means that AI engages a broad spectrum of compliance areas.

The UK Operational Resilience Framework and EU DORA requirements place an increasing burden on the financial sector’s operational risk controls. With the increasing reliance on digital technologies, cybersecurity becomes an even more critical concern. Data breaches, hacking, and other cyber threats can lead to significant losses, legal liabilities, and erosion of trust among customers and stakeholders.

Risk Advisory solutions

We collaborate with other Linklaters practices, in particular the Fintech, Technology and Artificial Intelligence teams to help our clients:

  • Establish and maintain robust governance, compliance and risk management frameworks.
  • Evaluate and manage multiple existing and emerging risks in relation to operational resilience, data and cyber security, and the use of AI on a global, supranational, and national level.
  • Design and implement risk-based controls to meet regulatory requirements and mitigate risks.
  • Test controls to identify gaps in areas which require enhancement and uplift to meet regulatory requirements.

Challenges

The market is undergoing rapid change, with carbon reduction, renewable energy sources, security of supply, ESG and energy nationalism taking centre stage. Clients are under increasing scrutiny and competitive pressure as energy transition gathers momentum.

ESG and energy related regulation globally has undergone significant change in the past few years. Environmental reporting requirements are expanding due to adoption of new legislation not just at the national level, but also at provincial or state levels.

Risk Advisory solutions

We collaborate with other Linklaters practices, in particular the Environment Social and Governance team to help our clients:

  • Evaluate, manage and mitigate their existing and emerging risks in relation to ESG, including supply chain management, sustainable and ethical sourcing, and other human rights.
  • Develop and enhance ESG governance, compliance and controls frameworks, policies and processes.
  • Test the efficacy and quality of their ESG controls to assess whether they are fulfilling their regulatory obligations e.g. in relation to greenwashing, transition to net zero, product marketing, reporting requirements, EU CSDR, DEI, Human Rights and Modern Slavery.
  • Measure and provide meaningful data / MI to give assurance to Boards that goals and obligations are being met.

Challenges

The current global geopolitical environment is one of uncertainty, flux, and heightened risk. Constant change in supply chain triggered by tariffs and sanctions has a significant impact on companies, e.g. an additional compliance burden, increasing direct and indirect costs of doing business, and disruptions to supply chains in sourcing and delivery operations.

Regulator, investor, and consumer scrutiny of the way firms manage their business relationships, third party risks and supply chains, has never been higher. This is driving a trend towards more active supply chain management across a range of risk areas.

There is greater focus on corporate reporting and newer regimes starting to require more formal risk assessment and due diligence.

Firms are expected to understand their exposure to geopolitical risk and be ready to respond to and mitigate the risk, including with scenario planning and crisis management preparedness.

Risk Advisory solutions

We collaborate with other Linklaters practices, in particular the Environment, Social and Governance team to help clients:

  • Evaluate and mitigate their existing and emerging risks in relation to geopolitics, including supply chain management and crisis management.
  • Improve the resilience of their supply chain (vendor and procurement), particularly at a global level, by managing risks on a continuous basis.
  • Prepare for and respond to unexpected geopolitical crises and events e.g. political unrest or conflict in one of the countries in which they operate.
  • Understand and comply with their regulatory obligations, as part of their current and prospective operations e.g. setting up in a new jurisdiction.
Financial regulation and financial crime
Digital transformation and operational resilience
ESG
Geopolitics
Our risk advisory solutions

Solutions

Risk Advisory helps clients to identify and assess risks, design, and implement controls to mitigate those risks, and test the effectiveness of those controls with recommendations for proportionate uplifts. Our support may be required at any stage of a “lifecycle”, for example operating in a new jurisdiction, post-transaction integration, responding to regulatory updates, addressing compliance failures, or as part of Business as Usual operations. We tailor our advice and services to our clients’ business and their specific issues.

Learn more about how we can support you by clicking through our client service offering.

Risk appetites/risk assessments

We help businesses develop or enhance their enterprise-wide risk assessments with user-friendly formats, methodologies and reporting structures. Our expertise helps clients find a practicable way of understanding and assessing their risks across all aspects of their organisation, including new areas of the business. This in turn enables them to implement controls to mitigate these risks. Clients might also need us to conduct a thematic risk assessment, e.g. for bribery & corruption/sanctions and we would base our assessment on the legal analysis provided by our legal experts.

Governance and People

We help clients design and implement governance and oversight structures with clear lines of defence, roles and responsibilities and processes for reporting, e.g. management information which is easy to understand, prioritises key risks and data, and provides Boards with an early warning mechanism for emerging risks. We can also support with generic or role-specific training at all levels.

Compliance / Controls frameworks

We support clients in the development of compliance management systems and risk-based operational policies, procedures and processes which meet legal and regulatory requirements and are in line with their risk appetite. By conducting current state assessments, gap analyses and thematic reviews, we provide practicable recommendations for controls uplifts. We are very experienced in leveraging clients’ existing resources to help them optimise their controls frameworks in a cost-effective way.

Controls testing

We can test the operational effectiveness of compliance, risk management and controls frameworks and provide practicable recommendations for enhancements. These may be particularly important for rapidly expanding businesses whose risk management and compliance frameworks are no longer fit for purpose, or for new corporate structures resulting from a merger/acquisition.

Compliance monitoring, QA and testing

We can support in the development and enhancement of compliance monitoring frameworks and internal audit processes, including compliance plans, testing templates and reporting mechanisms and to enable clients to fulfil their second and third line of defence obligations.

Transaction due diligence and post-deal integration

We enhance the legal work undertaken on deals by offering due diligence and post-transaction controls reviews, including assessment of the effectiveness of risk management and controls frameworks. We can also support in the implementation of controls post-deal including for joint ventures.

Redress and remediation

Where an issue has been identified in an organisation, we carry out look-back analyses and wider redress exercises. We also develop remediation plans and execute remediation projects, e.g. for KYC deficiencies or review of supplier and other third-party contracts, or areas with a risk of regulatory censure. Close collaboration with lawyers ensures redress and remediation is embedded within a legal framework.

Third party risk management

Against the backdrop of an increase in geopolitical risks, tariff and other supply chain issues, we provide vendor and supply chain due diligence and reviews of specific aspects of the supply chain, as well as controls design and testing. We can also assess joint venture risks, e.g. a breach or inconsistency with a Joint Venture partner’s ABC or sanctions policies.

Contentious issues

We support our investigation team on controls-related reviews / remediation in relation to potential regulatory breaches, including assessing and defining data related to the issue, developing a methodology and performing data analysis in line with the agreed legal parameters.

Solutions

Risk Advisory helps clients to identify and assess risks, design, and implement controls to mitigate those risks, and test the effectiveness of those controls with recommendations for proportionate uplifts. Our support may be required at any stage of a “lifecycle”, for example operating in a new jurisdiction, post-transaction integration, responding to regulatory updates, addressing compliance failures, or as part of Business as Usual operations. We tailor our advice and services to our clients’ business and their specific issues.

Learn more about how we can support you by clicking through our client service offering.

Risk appetites / Risk assessments

Risk appetites/risk assessments

We help businesses develop or enhance their enterprise-wide risk assessments with user-friendly formats, methodologies and reporting structures. Our expertise helps clients find a practicable way of understanding and assessing their risks across all aspects of their organisation, including new areas of the business. This in turn enables them to implement controls to mitigate these risks. Clients might also need us to conduct a thematic risk assessment, e.g. for bribery & corruption/sanctions and we would base our assessment on the legal analysis provided by our legal experts.

Governance and People

Governance and People

We help clients design and implement governance and oversight structures with clear lines of defence, roles and responsibilities and processes for reporting, e.g. management information which is easy to understand, prioritises key risks and data, and provides Boards with an early warning mechanism for emerging risks. We can also support with generic or role-specific training at all levels.

Controls frameworks

Compliance / Controls frameworks

We support clients in the development of compliance management systems and risk-based operational policies, procedures and processes which meet legal and regulatory requirements and are in line with their risk appetite. By conducting current state assessments, gap analyses and thematic reviews, we provide practicable recommendations for controls uplifts. We are very experienced in leveraging clients’ existing resources to help them optimise their controls frameworks in a cost-effective way.

Controls testing

Controls testing

We can test the operational effectiveness of compliance, risk management and controls frameworks and provide practicable recommendations for enhancements. These may be particularly important for rapidly expanding businesses whose risk management and compliance frameworks are no longer fit for purpose, or for new corporate structures resulting from a merger/acquisition.

Compliance monitoring, QA and testing

Compliance monitoring, QA and testing

We can support in the development and enhancement of compliance monitoring frameworks and internal audit processes, including compliance plans, testing templates and reporting mechanisms and to enable clients to fulfil their second and third line of defence obligations.

Transaction due diligence and post-deal integration

Transaction due diligence and post-deal integration

We enhance the legal work undertaken on deals by offering due diligence and post-transaction controls reviews, including assessment of the effectiveness of risk management and controls frameworks. We can also support in the implementation of controls post-deal including for joint ventures.

Redress and remediation

Redress and remediation

Where an issue has been identified in an organisation, we carry out look-back analyses and wider redress exercises. We also develop remediation plans and execute remediation projects, e.g. for KYC deficiencies or review of supplier and other third-party contracts, or areas with a risk of regulatory censure. Close collaboration with lawyers ensures redress and remediation is embedded within a legal framework.

Third party risk management

Third party risk management

Against the backdrop of an increase in geopolitical risks, tariff and other supply chain issues, we provide vendor and supply chain due diligence and reviews of specific aspects of the supply chain, as well as controls design and testing. We can also assess joint venture risks, e.g. a breach or inconsistency with a Joint Venture partner’s ABC or sanctions policies.

Contentious issues

Contentious issues

We support our investigation team on controls-related reviews / remediation in relation to potential regulatory breaches, including assessing and defining data related to the issue, developing a methodology and performing data analysis in line with the agreed legal parameters.

Additional resources

Key contacts

Our risk and compliance consultants have significant experience in advising firms on regulatory compliance and risk-related matters, and extensive industry and sectoral expertise. Please see the team's profiles for further details.
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Our broader Risk Advisory team includes legal, investigations, data, technology and project management experts with whom we work closely to provide a proactive and integrated approach to the diverse risks clients face. We tailor solutions to clients’ business goals, commercial strategy, risk appetite, and cross border operations.

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