The Legal Audit Process

The goal of a legal audit is to assess the legal exposure of an organization and to prepare a blueprint for minimizing the organization’s legal risk going forward. The first step in a legal audit is for Trinity Law Group lawyers and the leadership of the organization to determine the scope and focus of the undertaking and to confirm what the product of the audit will be. This discussion will usually entail information sharing on the structure of the organization, its current operating status, areas of concern to management and a look back on how the entity has used legal services historically. 

Once the scope and product is agreed upon, the next step will be for management to complete a questionnaire prepared by Trinity Law Group lawyers that will inquire about a broad range of issues within the context of the audit’s scope and request access to company records.  Trinity Law Group lawyers then reviews and analyzes the questionnaire responses and documents, confers with management and, possibly, staff, identifies current and projected legal needs of the company and provides a report to executive leadership or the board of directors.

The legal audit also serves as a tool for management to identify the potential issues that may arise in the course of implementing future business strategies to allow for addressing those legal issues prospectively. Finally, the legal audit lays the groundwork for the establishment of a proactive and preventive legal compliance program which is intended to ensure that the company's structure and ongoing operations are in harmony with the latest developments in applicable law.

Scope of the Legal Audit. Based on conversations with the organization’s principals, recent work pe​rformed after a review of available information, Trinity Law Group attorneys perform  a legal audit which may address the following areas:

Corporate Structure and Status

• Trinity Law Group lawyers will analyze whether the company and its affiliates are operating under the most appropriate type of corporate entities for their current and future business objectives;
• Trinity Law Group lawyers will confirm that the business entity is operating to protect its corporate status, maintain the "corporate veil" and shield the principals’ personal assets from exposure.  For example, does the company (i) document shareholder and board of director meetings at least annually; (ii) prepare minutes of those meetings; (iii) file annual reports with the Secretary of State in its state of organization and where it does business; and (iv) segregate corporate and personal bank accounts?

Current and Future Stockholder, Management and Operating Agreements

• If the entity is owned by more than one individual, Trinity Law Group lawyers will review the applicable agreement to ensure that it appropriately addresses continued operation of the entity, including:  (i) provisions for the continued operation in the case of an owner’s death or disability; (iii) a succession plan in case of death or disability of current management.
• Trinity Law Group lawyers will also review provisions for any right of first refusal for other owners to acquire the company's stock or ownership interest prior to allowing a third party to acquire an ownership interest.
• Trinity Law Group lawyers will also ascertain whether there are provisions for resolving disputes between or among owners, assess their effectiveness and recommend revisions, if necessary.

Major Contract Review

• Trinity Law Group lawyers will provide recommendations on contract preparation, review, analysis and negotiation procedures to streamline the legal, operational and sales process.
• Trinity Law Group lawyers will review all major existing agreements including supply, distribution, license, NDA  and service contracts and, if appropriate, recommend standardized revisions customize to meet company objectives and industry best practices.​

Business Assets

• Trinity Law Group lawyers will evaluate the status of all property used in the  conduct of the business, both real and personal, which will require a review of all documents pertaining to such property, including deeds, leases, rental agreements, financing agreements, licenses, etc.
• Trinity Law Group lawyers will review existing loan agreements and determine whether the company is in compliance with all terms and covenants.

Regulatory Compliance

• Trinity Law Group lawyers will examine business operations and confirm what permits, licenses, approvals and consents are legally required. 
• Trinity Law Group lawyers will review existing permits, licenses, etc., and determine the company is in conformance with all applicable requirements for each.      
• Trinity Law Group lawyers will determine what regulatory requirements apply to the business and its operations and make an initial determination of the entity’s compliance with all applicable legal requirements.        
• Trinity Law Group lawyers will propose, to the extent necessary, a remedial compliance program in any areas where regulatory compliance may be at issue.

Employee Matters

• Trinity Law Group lawyers will review and evaluate the company’s existing policies on employment practices and make recommendation for any adjustments or improvements to conform to recent legal developments.
• Trinity Law Group lawyers will review all past actions by regulatory agencies regarding employment practices and propose revisions to current policies and practices.
• Trinity Law Group lawyers will also ascertain whether there is a policy of having key employees sign employment agreements that include legally enforceable non-competition and non-solicitation provisions that prohibit “poaching” customers and employees?

Intellectual Property

• Trinity Law Group lawyers will review current procedures to ensure confidentiality of proprietary information, including trade secrets.  For example, do employees and contractors sign non-disclosure agreements (NDAs) and assignments of inventions relating to business operations, inventions and information?   
• Trinity Law Group lawyers will help determine whether there are any trade secrets related to the operation of the business or its products and services that require special protection.
• Trinity Law Group lawyers will also confirm that any trademarks and service marks are properly registered in order to protect the names and logos of the business and its products.
• Trinity Law Group lawyers will perform a similar review to determine if any copyright registrations are necessary to protect written materials and software.
• ​Trinity Law Group attorneys will review technology license agreements and purchase agreements important to the business operations and plans of the company.
• Trinity Law Group lawyers will review the company's internet presence and policies, including privacy policy, terms of use, ecommerce practices and content development to conformity with ever-changing standards and legal requirements.​