The Correct Order to Complete a Legal Impact Assessment (LIA) for Your Business

If you’re building or growing a business in the UK, you might have heard the term “Legal Impact Assessment” (LIA) come up-especially when expanding, launching new products, or changing how you handle data. But knowing exactly where to start (and what happens next) can feel overwhelming. And if you’re searching for what is the correct order to do an LIA, you’re not alone!

Getting the order right matters because missing a step can lead to compliance headaches, fines, or costly disputes down the track. The good news? With the right roadmap and support, tackling an LIA is straightforward-and it can seriously future-proof your business.

In this guide, we’ll break down what a Legal Impact Assessment actually is, why it’s crucial, and the essential steps you’ll need to follow in the right order. Whether you’re brand new to LIAs or looking to tighten up your compliance, keep reading to get clarity and peace of mind.

What Is a Legal Impact Assessment (LIA) and Who Needs One?

Let’s start with basics: an LIA is a structured process that helps you identify, evaluate, and manage the legal risks and obligations involved in a specific business activity or project.

The most common triggers for an LIA include:

• Launching a new product or service
• Expanding into new markets or regions (including international growth)
• Handling personal data in a new way (which can overlap with a Data Protection Impact Assessment or DPIA for GDPR compliance)
• Restructuring your business or changing how you employ staff
• Introducing new technology, partnerships, or business models

In short: if you’re making a change and want to avoid regulatory fines, lawsuits, or reputational harm, an LIA is your early warning system.

Why Is Doing an LIA in the Correct Order So Important?

It’s easy to assume you can just tick off a few legal boxes when you need them. But even experienced business owners can trip up if the LIA isn’t approached logically.

Skipping or muddling steps can result in:

• Overlooking critical risks (like new data laws or contract gaps)
• Wasting time and money on unnecessary reviews
• Having to re-do compliance steps last minute or under ICO scrutiny
• Delays to launch or legal exposure (e.g. under the Consumer Rights Act 2015, Data Protection Act 2018, or employment law)

That’s why understanding what is the correct order to do an LIA-and sticking to it-is essential for getting robust, actionable outcomes.

Step-by-Step Guide: The Correct Order to Complete a Legal Impact Assessment

So, how should a business tackle an LIA in the right sequence? Here’s a practical order you should follow:

1. Define the Project Scope and Objectives

Before you think “legal,” you need a crystal clear understanding of exactly what’s changing or being launched. This means defining:

• The purpose of your project or activity
• Which parts of your business (or third parties) are involved
• Who your stakeholders are (e.g. customers, staff, suppliers, regulators…)

Tip: Put this in writing. It keeps your LIA focused and makes sure everyone’s on the same page.

2. Identify Relevant Legal and Regulatory Areas

Next, pinpoint all possible legal areas your project touches. This will vary, but common UK business law areas include:

• Data protection and GDPR
• Consumer protection (like the Consumer Rights Act 2015 if you sell goods/services to individuals)
• Employment law (especially if hiring or restructuring)
• Intellectual property (are you creating or using new IP?)
• Sectors with special regulation (e.g. financial services, healthcare, online platforms)

Don’t skip this brainstorming stage-it ensures you review all the risks, not just the obvious ones.

3. Gather All Relevant Information and Documentation

You can’t assess risks if you don’t know the details. Collect:

• Project plans and business process documents
• Current contracts, terms, policies (such as your Privacy Policy or supply agreements)
• Any data flow maps (if you’re dealing with customer/staff data)
• Existing registrations or licences
• Records of past incidents or complaints

This groundwork stops you missing hidden risks (e.g. a legacy supplier contract with automatic renewal, or out-of-date GDPR consents).

4. Conduct the Legal Assessment

Now you’re ready to properly assess risk. This stage usually includes:

• Reviewing how your plans interact with each relevant law or regulation
• Pinpointing all gaps or non-compliance issues
• Flagging any high-risk issues (such as international data transfers, or terms that could be deemed “unfair contracts”)

If you’re not a legal expert, this is where getting professional help adds serious value-a legal team or specialist can rapidly spot blind spots and help you prioritise what matters most.

5. Evaluate Risks and Recommend Actions

For each legal risk, you’ll need to:

• Rate the likelihood and impact (e.g. low/medium/high risk)
• Propose realistic actions (such as updating a privacy notice, drafting a new service agreement, or getting further regulatory guidance)
• Identify who is responsible for each action and set deadlines

This turns your LIA findings into a practical action plan.

6. Document the LIA Findings and Actions

It’s essential to record your entire process, findings, and rationales. A thorough LIA record demonstrates your business acted responsibly (which can be vital if regulators or courts ever ask, especially under GDPR or consumer law).

Typically, this includes:

• LIA summary and scope
• Legal risks identified
• Proposed actions and who owns them
• Sign-off/who reviewed the LIA

This document will also help guide future reviews if your business or laws change.

7. Implement the Stated Actions

Assessment isn’t enough-you need to do the things you’ve identified. This might mean:

• Changing contracts and updating supplier agreements
• Rolling out new policies or training for staff
• Adapting product design or data flows to meet compliance
• Registering for required licences or certifications

Follow through is key: regulators give no credit for great paperwork unless actions are real.

8. Review, Monitor and Update as Needed

An LIA isn’t a one-off. After implementing your action plan, put in place a schedule for regular review-especially if laws or your business model changes.

• Monitor compliance (e.g. data breaches, complaints, contract renewals)
• Update your LIA if you make further changes (like expanding or launching a new product line)

Think of your LIA as a living document, not a box to be ticked once.

Which Laws Should You Consider in Your LIA?

The “correct order” is important, but so is knowing which UK laws matter for your LIA. Here are several you may need to review, depending on your project:

• Data Protection: The Data Protection Act 2018 and UK GDPR require detailed consideration if you process personal data. You may need a Data Protection Impact Assessment (DPIA) as part of your LIA.
• Consumer Rights: If you supply goods or services, ensure compliance with the Consumer Rights Act 2015 and e-commerce laws for returns, refunds, and transparency.
• Employment Law: Hiring or restructuring? Get familiar with employment contracts, redundancy rules, and discrimination laws.
• Intellectual Property: Register vital IP and review issues involving third-party content-mistakes here can be expensive (see our complete guide on IP rights).
• Sector Regulations: For finance, education, medical, and other regulated industries, check for industry-specific requirements (e.g., FCA for financial services, Ofcom for communications).

If you’re not sure which apply, this is exactly the moment to ask a legal advisor for tailored advice.

Should Your LIA Be Done In-House, Or With Legal Support?

For low-risk or routine changes, your team might run the basics themselves using checklists. But for complex, high-stakes projects (such as handling sensitive personal data, entering new markets, or launching innovative products), professional legal input is highly recommended.

• Lawyers can help map out all relevant legal risks
• They spot issues that templates or non-lawyers might miss
• Getting it right at this stage can save substantial costs if things later go wrong

A good legal advisor will also make sure your LIA isn’t just a compliance exercise, but a useful business tool-helping with contract reviews, updating contractual terms, and proactive guidance for growth.

How Does an LIA Relate to Other Compliance Assessments?

It’s common to confuse an LIA with other types of impact assessments, especially when data is involved. Here’s a quick comparison:

• LIA (Legal Impact Assessment): Broad; covers all legal/regulatory risks for a particular project or change.
• DPIA (Data Protection Impact Assessment): Required for certain personal data processing under GDPR; focuses on privacy risks.
• Risk Assessments: Often focused on operational safety or cyber security, not just legal.

You may need to do a DPIA as one component of your LIA-for example, if launching a new app that collects sensitive data.

What Are the Risks of Not Completing an LIA Properly?

It’s tempting to rush or skip steps, but this can expose you to:

• Regulatory investigations (from the ICO, Trading Standards, FCA…)
• Customer, supplier or staff disputes-costing time and reputation
• Financial penalties for non-compliance (such as under GDPR, which can impose fines in the millions)
• Difficulties with future investment, partnership, or sale due diligence

No one sets out to get caught out-but many businesses do because LIAs are left too late or done in the wrong order.

Key Takeaways

• A Legal Impact Assessment (LIA) helps you systematically spot and manage business legal risks for new projects or major changes.
• Completing an LIA in the correct order-starting with scoping, then identifying legal areas, gathering documents, assessing, recommending, implementing, and reviewing-is critical to real, practical compliance.
• Review all laws and regulations relevant to your project, including GDPR, consumer law, employment law, and sector rules.
• Document your findings and actions thoroughly-showing a clear chain of reasoning and accountability.
• If your changes touch on data or other regulated areas, seek legal advice to ensure you don’t miss hidden risks.
• Think of your LIA as a living document: review and update as your business evolves or laws change.

If you’d like help with your LIA, or want to make sure you’re following the right steps for your business, reach out for a free, no-obligations chat with our friendly team at 08081347754 or team@sprintlaw.co.uk. With specialist legal support, you can focus on growing your business-confident you’re protected from day one.