An evaluation of the utility of ISO 31022:2020 [risk management — guidelines for the management of legal risk] for use by micro-entities

Abstract

The central thesis of this article is that the International Organization for Standardization (ISO) 31022:2020 [Risk management – Guidelines for the management of legal risk] is not well-suited for micro-entities due to its complexity and the resources required to implement it by such micro-entities. This paper evaluates where ISO 31022:2020 falls short and concludes that a simplified, more accessible micro-entity-specific solution is needed. This article is an outgrowth of the author’s efforts to develop a legal expert system (OLRAS) designed to assist micro-entities to address commercial legal risk in contract clauses. A micro-entity is defined as a small business that must meet at least two of the following conditions: (1) turnover must be not more than £1,000,000; (2) the balance sheet total must be not more than £500,000; and (3) the average number of employees must be not more than ten (10). There is an acute lack of affordable legal risk management (LRM) advice for such micro-entities. This article contributes to the LRM literature in that it offers a firsthand perspective on the efficacy of the ISO 31022:2020 as a tool suitable for micro-entities.