4 Major Compliance Trends to Support with Legal Technology

Regulators say that effective corporate compliance begins at the top. They encourage company executives and directors to set an example in terms of a responsible culture built around ethics, morals, values, and a willingness to do the right thing.

There are overlaps between compliance and ethics that influence corporate cultures. When stakeholders demonstrate their capacity to operate in ethically responsible manners, the message is received by the rest of the corporation. Employees in the organizational hierarchy abide by the same ethical principles and, therefore, create a culture that upholds compliance.

What is the culture of compliance?

A culture of compliance is a set of attitudes, behaviours, and values that guide corporate workers to align with policies, procedures, and regulations. Essentially, a culture of compliance uses ethical principles to enforce legally binding protocols.

Some companies create diligent compliance culture programs that are shared with their employees. The Starbucks Standards of Business Conduct is one prime example, in which the corporation describes a series of ethics, values, and principles that all employees must adhere to as they conduct their day-to-day responsibilities.

Why is culture important in compliance?

Companies with strong organizational cultures empower employees to operate under both legal and ethical best practices. According to Gartner, strong compliance cultures produce both financial and non-financial benefits for the corporation. Specifically, they found that:

• Employees in strong cultures are 90% less likely to passively observe misconduct
• Employees in strong cultures are 1.5 times more likely to report misconduct
• Employees in strong cultures are 2 times as likely to be engaged with their companies
• Employees in strong cultures are 2.5 times more likely to voluntarily report misconduct

The commonality is a sense of trust. When people trust the corporate values; that they can safely live by those values, and that they can report misconduct without fear of reproach; they’re more likely to abide by those principles. As a result, any behaviour that could compromise compliance is dealt with before it becomes an issue for the business.

6 steps to achieve a culture of compliance

Creating an effective corporate compliance culture isn’t something that happens overnight. It takes time, patience, vigilance, and resources to implement the proper cultural protocols.

Here are six key steps recommended by Thomson Reuters that your compliance team should follow. Use these recommendations to achieve an effective culture of compliance.

Create an internal awareness initiative

Regulators are constantly changing compliance protocols, and employees won’t know how to abide by the proper protocols if they don’t know about them. Ensure your compliance managers have the resources to remain on top of these changes. Your compliance team is your first line of defence to uphold corporate compliance cultures.

Set the tone that the C-suite will communicate changes

Culture is set right from the top, and the C-suite executive team must communicate the cultural expectations to the rest of the organization. Expectations, policies, and procedures must be set by leadership, and there must be transparent communication of those expectations to shape the culture that develops from those guidelines.

Disseminate cultural protocols to employees

As your compliance team learns about changes that could impact corporate culture, they need the means to educate the rest of the company. Give your team the resources to produce educational content that can be disseminated to the rest of the company. Education is the best weapon against non-compliance activities.

Use the right technology to enforce compliance

Part of the educational effort is through the use of technology. Create e-learning programs like videos, modules, and quizzes that test employee awareness of compliance culture protocols.

You should also use technology like entity management software to create structured compliance programs. Entity management platforms have built-in compliance frameworks that are easy to use. Plus, they provide prompt updates to your team if any data is missing, filings are late, or anything that could trigger non-compliance.

Develop a rewards program for positive cultural behaviour

Incentives are the best motivator to prompt responsible actions. Leadership can use suitable compliance incentives as rewards for abiding by the compliance culture. Employees are far more likely to live by cultural values when they understand how they benefit from doing so.

Establish whistleblower programs that protect case reporting

Employees must feel safe coming forward when they witness unethical behaviour that amounts to misconduct. By creating a whistleblower program that protects employees, people will find the courage to report misconduct so that the compliance culture remains in effect.

Since the beginning of 2020, working professionals across a multitude of industries have aspired to achieve a healthy work-life balance. The legal industry is no exception as law firm employees must keep up with growing demands in an increasingly competitive marketplace for professional legal services.

One of the most interesting trends to emerge in the past few years is how legal talent uses technology to support healthier work-life balances. It’s not just the personal lives of your firm employees that benefit from work-life balance, but the firm as a whole also reaps the rewards.

There are practical business benefits for your firm by creating healthy work environments. You can both attract and retain top legal talent by supporting a healthy balance between professional and personal responsibilities of your workers.

How does work-life balance for employees help the firm?

As a managing partner at a law firm, you have three primary concerns for your business:

• Satisfying your legal talent
• Satisfying your legal clients
• Increasing Legal Recurring Revenue for the firm

Some legal experts believe the only priority is the third point on the list. However, the most successful firms prioritize all three, and they do so in the listed order that they appear on this page. Successful law firm managers understand a simple logic: Legal Recurring Revenue can only expand if clients are happy, and clients can only be happy if the legal talent servicing them are happy.

Give your firm a competitive advantage by investing in resources that help your employees achieve a healthy work-life balance. Legal technology is one such resource that automates many clerical and administrative workflows. It allows your employees to save valuable time on necessary clerical tasks, and that time can be reallocated into billable hours to service clients.

Increased casework is expanding demand for legal services

Over the past three years, there’s been a growing demand for legal services provided by law firms. The Clio 2022 Legal Trends Report identifies this increasing trend by comparing the past three years to the average amount of national retained legal business in 2019, the final full year uninterrupted by a global pandemic.

Following a slight decline in legal business throughout 2020, the following two years saw a rebound in retained legal services across the United States. According to the findings, firms opened new cases at an average of 10% above the amount of legal retained business in 2019.

Increased caseloads are also translating into expanded billable hours that are invoiced to clients. Compared to the baseline in 2019, the number of billable hours that are invoiced to clients is up by an average of 28% between March 2021 and August 2022. Collected revenue is also up by an average of 31% compared to inbound revenue from 2019.

Entity management software fosters gainful client relationships

Renewed demand for legal services and the boost in Legal Recurring Revenue for law firms indicates that the legal industry will continue to thrive for years to come. Part of the fuel for this trend is that a growing number of firms are incorporating legal technology like entity management software to support healthier client relationships.

Entity management software is a legal technology solution built by legal experts for legal experts. Its purpose is to automate and streamline traditional entity management workflows to help law firms maintain diligent minute book records at accelerated rates.

Time saved on clerical and administrative work translates into more opportunities to service clients. Entity management software functions as a single source of truth for any questions that clients have about their legal and compliance matters. Your clerks can simply open the platform, use the advanced search features to find the record in question, and provide immediate answers in only a few seconds.

Compare this approach to client relationships with the traditional method. Lawyers and clerks would take client feedback and scramble through boxes and binders of physical documents to find the specific minute book record in question. It’s a process that could take hours or several days to complete.

Which approach do you believe will support more fulfilling client relationships? Subsequently, which clients do you believe will be the most satisfied, and therefore more likely to renew their business interests with your firm?

Legal technology simplifies clerks’ lives and clients benefit

Your firm can make your legal talent happier, healthier, and live a more fulfilling work-life balance. Simply invest in entity management software and other modern legal technologies to create efficient workflows for your employees.

When people work smarter, not harder, they become more productive. Improved productivity at your firm means more time is available to increase billable hours and time dedicated to servicing clients. Greater service is far more likely to improve client satisfaction, which translates into expanded Legal Recurring Revenue for your firm.

Remember that you should focus on three main priorities to support your firm’s future growth:

• Satisfy your legal talent
• Satisfy your paying clients
• Increase Legal Recurring Revenue

Investing in solutions that prioritize all three responsibilities — and in that order — result in more profitable business to grow your firm. Get on the legal technology bandwagon and invest in an intuitive entity management platform like MinuteBox today.

People don’t like change. That is a humanistic trait that resonates with professionals all over the world. You’ve done things a certain way for five, ten, maybe twenty years, and you’ve been very successful with your established workflow. You don’t want to be told that you have to change.

This is a common roadblock when companies attempt to introduce automated technology to their teams. In industries like the legal community, which have traditionally been very resistant to modernized workflows, resistance to change is particularly strong.

What are the common reasons for resistance to change?

There are two major reasons why companies, including law firms, resist adopting changes to their collective workflows.

The first major reason is a human trait as old as time itself. People get set in their ways and don’t want to adapt to anything new. If you’ve been doing something successfully for a long time, your natural instinct is to push back against new workflows with the question, ‘why should I change what I’m doing? If it ain’t broke, don’t fix it.’

The second major reason is a similar human characteristic. People don’t like being told that they have to do something a certain way. Most people who are hired to do jobs prefer to be onboarded and then left to their own devices to get the work done.

Nearly 70% of professional workers have considered leaving their jobs altogether because of their frustrations with micromanagement. Forced adoption of new workflows is considered by many workers to be an aggressive form of micromanagement that can lead to resignations.

Tips to break down resistance to automated technology

Let’s look at two possible scenarios when addressing this objective. The first scenario will present the objective from the point of view of a named partner at a law firm. The second scenario will present the objective from the point of view of a paralegal at a law firm.

How named partners introduce automated legal technology to their firms

As a named partner at a law firm, it’s your job to ensure that business continues to grow. Your concern is acquiring new clients and servicing existing clients to the best of your firm’s ability. All these priorities are part of a broad effort to increase Legal Recurring Revenue for the firm.

Automated technology is designed to help your team of legal talent operate more efficiently. Solutions like entity management software streamline how your team completes routine clerical and administrative tasks. Streamlined workflows allow all legal talent to dedicate more time to servicing clients, increasing billable hours for the firm.

Therefore, as a named partner, you want your team to reap the benefits of entity management software. You can introduce a mandate for the whole firm to onboard onto the platform, or you can host a firm town hall to introduce the software and address any questions skeptical peers may have. Your position gives you the authority and influence to make this transition happen.

How paralegals introduce automated legal technology to their firms

As a paralegal, you’ll be the primary user of legal technology like entity management software. You have much less authority and influence than a named partner in the firm. Therefore, you’re faced with the much grander task of convincing the partners to purchase the software.

To complete your objective, make the case similar to presenting a legal argument in court. Conduct your research and lay out the facts to the chief decision makers at the firm. Reference statistics showing that most legal professionals devote fewer than three hours of their days to client billable hours because of the abundance of clerical work to complete.

Entity management software and similar automated legal technology drastically reduce the time spent on repetitive clerical tasks. Show the partners that a small investment in such a solution will pay itself back in more time that can be spent growing Legal Recurring Revenue for the firm.

How to overcome resistance to automated legal technology

Regardless of your title and level of authority, there will be challenges convincing your entire legal team to adopt automated legal technology. So what’s the best way to overcome that resistance and break through the barriers?

Sticking with the theme of dual approaches, there are two great ways to overcome internal resistance to legal technology. The first is to be as open, transparent, and inclusive about the new workflows.

Suggest the possibility of acquiring a new piece of software in a firm-wide memo, email thread, or slack channel (if you use slack at your firm). Open a forum for a robust discussion about the pros and cons of acquiring new legal technology so that you can address people’s concerns. This has proven to be a very effective method to break down resistance to new solutions.

The second approach is to encourage your legal talent to review testimonials from fellow legal professionals in other firms or corporate settings. Gain an outside perspective on how automated legal technology like entity management software changed the lives of the professionals in those other settings.

If it worked for them, it can work just as well for you. Take that feedback into consideration, and you may become very excited to change your approach to legal entity management with a more modern innovative solution.

Interested in learning more about the automated benefits of legal entity management technology? Wait no longer and join the MinuteBox revolution to transform your workflows into more efficient and more productive processes.