The Power of Corporate Compliance Through Ownership Charts

Entity management refers to a governance system that compiles, organizes, and manages the corporate records of a business entity. Business entities include anything from multinational corporations to partnerships, limited liability partnerships, trusts, LLCs, and other organizational structures.

Legal entity management establishes a consistent framework for how a business entity and any subsidiaries conduct themselves. It aligns department leaders from an organization’s legal, accounting, taxation, and compliance divisions to establish a set of rules and principles that allow the company to operate in a legally responsible manner.

What is the purpose of legal entity management?

The purpose of entity management is to install a structured system that promotes effective corporate compliance and responsible organizational governance. Entity management policies and procedures ensure companies respect the interests of owners, shareholders, managers, employees, regulators, and the public at large.

Entity management is a central piece of an organization’s environmental, social, and governance (ESG) policies and procedures. ESG goals are broad commitments by legal entities to introduce greater diversity, sustainability, and environmental awareness into their operations. Legal entity management respects the objectives of those goals while maintaining strict policies and procedures to respect regulatory compliance.

What information belongs in entity management platforms?

Many companies use legal entity management software to remain in compliance with jurisdictional laws. These platforms function as secure centralized databases for all information pertaining to the organization.

Some of the most common information that can be found within entity management documents include:

• The legal name of the entity (or subsidiary)
• Organization classification (corporation, partnership, LLC, trust, etc.)
• Registered legal addresses for the company
• The official date of incorporation (for corporate entities)
• Jurisdictional certifications to legally conduct business
• Names of registry agents

How is a legal entity management system maintained?

There are a number of business assets that organizations use to maintain proper legal entity management. These assets include, but are not limited to, any of the following:

• Organizational charts
• Capital tables
• Tax reports
• Shareholder ledgers
• Minute book records
• Other corporate documents

Records from each of these documents give executive managers, directors, and shareholders keen insight into the inner workings and operations of the organization. Law firms and general and corporate counsel representing the organization can share the corporate documentation data with the proper regulators whenever necessary. Transparent recordkeeping keeps your organization in compliance, avoiding any disruptions to business growth and operations.

What are the penalties for non-compliance?

Regulators across North America have dedicated years to cracking down on white collar crimes to protect the public from the real consequences of those offenses. Organizations and business leaders that follow the letter of entity management avoid legal pitfalls that compromise the growth and security of their respective businesses.

Those leaders that fail to abide by the responsibilities of legal entity management risk subjugation of criminal indictments. One needs to look no further than charges laid against one former president and head of a namesake corporation as a cautionary tale of falsifying business records for personal gain.

In some cases, failures to uphold proper legal entity management practices can tarnish an entire entity’s future. Case in point: FTX founder and former CEO Sam Bankman-Fried faces multiple charges of fraud for the misappropriation of client funds. The collapse of FTX under SBF resulted in the company filing for Chapter 11 bankruptcy as new CEO John Ray III establishes proper corporate controls.

How can firms and general counsel use entity management platforms

The greatest benefit of legal entity management software is that it allows legal teams to digitize corporate documents and minute book records. By transferring corporate records into secure cloud-based servers, entity management workflows become more streamlined and time efficient.

Since the data is stored in the cloud, it eliminates the need to schedule in-person meetings with key stakeholders to certify the corporate documents. Anyone with biometric and hardware key authentication can access the records at their own convenience from any location. This makes it easier for legal departments to acquire approvals and signatory sign-offs on corporate data.

The platform is very intuitive and includes advanced search capabilities to find and review important minute book records in a matter of seconds. This is a more efficient way to conduct review sessions with stakeholders. If any executive has questions about a particular record, immediately pull up the minute book in question and present the answer. It’s a more efficient workflow for everyone involved!

Licensed attorneys charge the highest percentage of billable hours to legal clients. Paralegals also have opportunities to increase billable hours for a firm. The most common ways for paralegals to increase volumes of billable hours are through the following:

• Discovery work
• Legal document preparation
• Research and analysis
• Client communications

The last point is critical for billing more time to paying clients. ParalegalEDU is a resource that educates legal professionals on how to build a sustainable career. According to their research, the most important personality trait that aspiring paralegals require is people skills.

Why do paralegals need people skills?

Paralegals are on the front lines, handling client communications. They often act as a buffer between clients and practicing attorneys. They receive client messages over the phone or in their inbox, and they’re responsible for relaying those communications to the attorneys.

In small law firms, paralegals often function as office managers in addition to their clerical duties. In these positions, they act as the voice of the firm when clients call to discuss their cases. They’re also the first point of contact when clients arrive at the firm for an in-person meeting with their attorney.

In any scenario, there’s a great deal of client interaction that paralegals must manage. People skills allow paralegals to respond to clients in calm, reassuring ways. It’s not uncommon for clients in the midst of personal setbacks or corporate litigation to unleash their frustrations on paralegals.

How paralegals can service clients more effectively

Paralegals must maintain their professionalism regardless of how unprofessional a client may behave. It takes patience and discipline to maintain those skills.

However, there are ways that paralegals can improve the way they interact with clients. These approaches allow paralegals to provide faster, more helpful service to clients, which provides a number of business benefits to the entire firm.

Use entity management technology to expedite clerical work

There have been many statistics gathered on the typical law firm experience. According to the findings, only 2.5 hours in a standard eight hour workday are billable hours charged to clients. That means legal teams, and paralegals in particular, are spending nearly 70 percent of their working days on clerical and document work.

Instead of allowing your paralegals to fall into the documentation trap, invest in entity management technology to help streamline the clerical workload. By uploading all minute book records and corporate documents to cloud-based servers, your firm modernizes minute book management.

Paralegals can use advanced search parameters to find the documents in question in a matter of minutes. If clients are already in bad moods, your paralegals can calm those feelings by providing quick, efficient answers to their pressing legal questions. It improves the quality of service, boosts client satisfaction, and enhances the reputation of the firm.

Entity management software supports remote client meetings

At a time when more people want options for remote work, it enhances the client experience if you can accommodate those desires. Entity management software allows your firm to conduct all client meetings and document reviews at their convenience.

Since entity management platforms are cloud-based solutions, they’re accessible from anywhere. Simply have your paralegals share administrative access with your client’s main point of contact. Once they have access, they can view the records from the convenience of their own homes, their offices, or any destination with an internet connection.

Providing clients with the option to conduct meetings remotely makes things easier for them. An easier experience is a more enjoyable experience that increases the probability they’ll retain your firm’s services for future business.

Paralegals convert saved clerical time into client-facing service

Finally, since entity management software streamlines clerical and administrative tasks, paralegals will earn back large portions of their working calendars. They can use this saved time to provide more direct service to clients, including strategic discussions that take some of the workload off the practicing attorneys who will argue the merits of the case.

This is a perfect example of a win-win-win scenario. The client has an extra voice counseling them on how to best persevere through the case. The paralegal gets to spend more time helping build Legal Recurring Revenue for the firm, and they get to expand their responsibilities beyond the standard clerical and documentation work. The attorney also earns back more time to polish their arguments when negotiating cases.

Paralegals have great people skills; help them use those skills wisely

Managing client relationships is a difficult task in any environment. When those relationships are built around legal cases that risk hampering the client’s future, the clients are prone to be in bad moods when interacting with legal teams.
Paralegals have the skills to support clients, but the right legal technology gives them an added edge to deliver quality client service. Introduce entity management technology to your own legal community and convert those benefits into opportunities to improve client satisfaction.