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The legal industry is constantly evolving and with it, so is the technology that supports it. One area that has seen significant advancements in recent years is legal entity management. In this blog post, we will explore how legal entity management is impacting corporate practice and how it can streamline processes and make them more cost-efficient.

Here’s a summary of what we’ll look at in this post:

• Legal entity management is impacting corporate practice in a big way
• It streamlines processes and makes them more cost-efficient
• It allows for easy access to information and documents, even across different time zones
• Legal entity management can connect to other areas of practice and enhance overall efficiency

The move to legal entity management has been a game changer for the corporate practice. Karen Anderson, Corporate Services Manager at Blakes, Cassels & Graydon LLP, highlights the benefits of this technology and how it is impacting the way corporate lawyers work. “It’s exciting because it streamlines the processes and it makes everything more cost efficient. We can do things in a lot less time than we did historically. And other offices can access this information. Vancouver is on a different time than us, but they can access it late in the afternoon if people are no longer available or whatever it may be.”

Watch the full interview, Legal Entity Management: Streamlining Processes and Enhancing Efficiency

The ability to access information and documents quickly and easily has been a huge benefit of legal entity management. This is especially true for corporate practices where there are a lot of documents and information to keep track of. “It also helps on transactional work because all the documents are there and you can share them in a minute. In days gone by you would have been collecting PDFs, copying the minute book, but now it’s all at your fingertips.”

What’s more, legal entity management can connect to other areas of practice and enhance overall efficiency. “Legal entity management can spread into other area’s as well, and that’s exciting to me!”

The legal industry is constantly evolving and with it, so is the technology that supports it. Legal entity management is just one example of how technology is impacting the way lawyers work and making the process more efficient. As this technology continues to evolve, we can expect to see even more improvements in the way the legal industry operates.

In today’s fast-paced business environment, staying on top of the latest technology is crucial for any industry, including the legal sector. One area that is seeing significant growth and innovation is LegalTech, and there are a few specific technologies that are particularly exciting to industry experts.

Here’s a summary of what we explore in this post:

• Legal entity management is a highly important and exciting area in LegalTech.
• Cloud-based solutions are great, but it’s important to work closely with vendors to ensure they understand how to make changes quickly to keep clients in the loop.
• Technology that allows for collaboration with clients and secure document management, is also a highly valuable and innovative area in LegalTech.

One of the most exciting areas of LegalTechis legal entity management. As Karen Tuschak, a legal industry expert, points out, “legal entity management is huge. I often say that corporate touches every aspect of a firm. The litigation lawyers, the real estate lawyers, they’re all looking for information about corporation clients. So legal entity management is huge.” By streamlining and centralizing the management of legal entities, firms can save time and improve efficiency, allowing them to focus on more important matters such as serving their clients.

Watch the full interview, Exploring the Most Exciting Technology in LegalTech: Insights from Industry Experts

Another area of LegalTech that is gaining traction is cloud-based solutions. As Karen notes, “cloud-based solutions are great. Just make sure you really work with your vendors so they understand how making those changes quickly keeps the clients in the loop.” By leveraging cloud technology, firms can enjoy increased scalability, enhanced accessibility and the ability to streamline routine tasks. This can be especially beneficial for firms that are looking to save costs, as well as those that are looking to increase productivity and efficiency.

Finally, closing technology is another area of LegalTech that is seeing significant growth and innovation. As Karen explains, “closing technology allows you to collaborate with your clients in one area securely. You send this stuff out by DocuSign and it comes back and you whip together a closing book. So anything like that really reinvents and invigorates the way you do the work, and that is huge.”

Staying on top of the latest legal technology is extremely important, but particularly so in this environment. There are many areas of legaltech that are heating up and seeing incredible progress. Two of those areas are transaction closing technology and legal entity management. Both are worth checking out and discovering more about in a corporate law pracice.

Adaptation is key to survival in business. Changing circumstances like new regulatory laws, or global uncertainties like cybersecurity issues force businesses to adapt to new predicaments. Faced with these unforeseen challenges, corporate entities must revisit their policies and workflows to appropriately adapt.

When unforeseen challenges threaten the legal security of your corporate entity, the most prudent adaptation lies within your governance, risk management, and compliance policies. Your GRC organizational strategy should include protocols for adapting to unforeseen changes that risk compromising the legal security and integrity of your business entity.

What is the purpose of having GRC policies?

The purpose of GRC policies is to manage data security risks, reduce underlying business costs, and maintain compliance with regulatory laws. Creating a strategy to manage GRC policies makes it easy to pivot processes and workflows when unforeseen challenges arise.

GRC policies also enable more transparent communication of vital business entity information. Data security and privacy protection laws make it vital to protect confidential legal entity data or risk the penalties of non-compliance. Ensure your GRC strategy includes data protection processes that remain up-to-date with the latest regulatory requirements.

Examples of unforeseen challenges that affect GRC policies

It’s natural to face a certain degree of uncertainty while conducting business. After all, there’s no such thing as a sure thing when it comes to business.

Uncertainties can arise both internally and externally that force you to adapt GRC policies and procedures. Here are some common examples of internal and external unforeseen challenges that will force your corporate entity to pivot established workflows.

Unforeseen internal challenges

Unforeseen internal challenges are unexpected events that impact the standing and operating workflows of your corporate entity. Common examples of internal challenges include:

• Lawsuits brought by employees, customers, suppliers, or third-party vendors
• Lower-than-forecast quarterly performances that cause financial issues for the business
• Changes in leadership or ownership that uproot established growth plans and workflows
• Integrations of different company cultures following mergers, takeovers, or acquisitions

Any or all of the preceding examples can throw off your business growth plans. That’s why having a documented GRC strategy is so important to maintain corporate security. Refer to your written policies, and then you can make appropriate changes to your procedures in response to unforeseen challenges.

Unforeseen external challenges

No company exists in a vacuum, and a combination of technological advancements and geopolitical alliances have opened the doors to a truly global economy. For those reasons, your business entity is susceptible to the whims of global turbulence. Examples include:

• Global conflicts such as the war in Ukraine and the worldwide fallout
• Supply chain issues that disrupt the distribution of vital goods and services
• Political extremism that cracks down on open market business operations
• New regulatory laws passed by national, international, or regional governments

When circumstances outside your entity’s control impact business operations, it’s important to remain calm and accept the events that are beyond your control. Instead of overreacting and risk undercutting your growth trajectory, simply refer to your GRC policies to determine the best adaptation method so you can move forward.

Risks of not adapting your corporate GRC policies

The biggest risk of failing to adapt GRC protocols is the risk of non-compliance. Failing to maintain compliance with the laws can result in multimillion dollar penalties issued against your corporate entity. These fines could be subjected to the organization itself, and members of your executive leadership team may also be the targets of non-compliance fines.

In some extreme cases of non-compliance, business leaders face criminal charges and potential jail time. The most recent example of these extreme non-compliance circumstances is the scandal surrounding FTX and the criminal charges lobbied against Sam Bankman-Fried.

Compliance is one of the three pillars of your GRC organizational strategy. Corporate compliance protocols help protect corporate assets, ensure financial transparency, and maintain compliance with the laws to prevent those costly penalties.

Entity management software is your secret weapon to combat unforeseen issues

When unforeseen challenges to GRC policies occur, your business leaders need the resources to make strategic decisions on how to adapt. Visibility into the root causes of those unforeseen challenges; visibility that’s granted through entity data and insights gleaned from that data enables leaders to make those strategic pivots.

Entity management software functions as a single source of truth to help leaders gain insight into the unforeseen challenges. Entity management systems retain all legal entity data in one centralized platform, providing a clear and transparent overview of the issues that affect GRC policies, including corporate compliance.

Detailed minute book records provide valuable legal insights

Records maintained within entity management software prepare your legal team for any unexpected lawsuits brought against the organization. The platform also maintains diligent shareholder records, providing a detailed audit on which investors own x percent of the business entity. You can also use the platform to issue or transfer shares amongst shareholders or to new investors in the business.

Compliance framework guides your team to maintain legal security

Most importantly, entity management software like MinuteBox has a built-in compliance framework. The platform monitors your organizational charts, calendars, workflows, and other templates for any errors, statutory non-compliance, and date-based compliance tasks that could penalize the business.

Efficient entity management workflows help you pivot when needed

Unforeseen circumstances are not predictable, and you need to have resource efficient workflows that allow your business to pivot when these circumstances occur. Entity management software makes it more efficient to document, manage, and report on legal entity data. This allows your team to proactively react (in a very oxymoron manner) when unforeseen challenges force you to change your GRC policies.

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.

Performance driven legal teams have a burning desire to provide exemplary customer service to their clients. Strong interpersonal client relationships are the bedrock of a firm’s profitability, allowing the business to scale growth by expanding Legal Recurring Revenue.

Using technology to implement document automation is one of the best ways to deliver those strong interpersonal client relationships. In an age where people can uncover immediate answers to their questions, clients expect instant responses to their legal queries.

Why document automation enhances client support

Client minute books, corporate records, and other official documents contain most of those pressing answers. Automated workflows to manage those documents speeds up the delivery process to provide those answers, ultimately improving client satisfaction.

Here’s a scenario: suppose you’re a mid-size corporation with pressing legal needs. You have the option to be represented by two different firms.

Scenario #1: paper documentation

At one of those firms, all minute books and corporate records are stored in paper format. Considering it takes 5 minutes to process a single document within minute books, it takes hours to uncover specific answers to your legal questions. It’s very time consuming, and it leaves your own in-house counsel waiting on important information to protect the interests of the business.

Scenario #2: document automation

At the other firm, they use entity management software to automate legal documentation. It’s a much faster workflow compared to the paper trail process, enabling your legal professionals to uncover pertinent information in corporate records within minutes. Your own team receives the immediate confirmation that they need to move forward with strategic decisions to protect the interests of your business.

Which firm has more satisfied clients?

Time is a luxury that very few can afford, especially when it comes to legal decisions that can impact the future of a business. A firm that embraces document automation as a standard operating procedure can provide immediate legal support, enabling clients to utilize hours of their own time more efficiently and effectively. A business that receives this kind of support is far more likely to be satisfied with their legal representation.

Benefits of using document automation technology

Since document automation is the more effective method to satisfy client needs, how do you utilize technology and deliver those support services? Cloud-based subsidiary management software is the best way to centralize all minute book records, manage subsidiaries, and save valuable time on compliance tasks.

No code document assembly

This is one of the greatest benefits of document automation technology. Large law firms may have in-house IT departments, but many small to mid-sized firms don’t have that luxury. With platforms like MinuteBox, there’s no need for in-house development support.

Enterprise grade scanning services are built right into the platform’s capabilities with no coding or technical expertise necessary to complete the process. Your legal professionals can upload minute book records in minutes into carefully organized files that allow for the seamless management of client needs. This further fulfills the need to provide fast and efficient client support, which will generate ongoing revenue for the firm for years to come.

Maintain up to date shareholder and transaction records

Shareholder ledgers keep track of all outstanding shares owned by different investors and record all important dates pertaining to the sale or transfer of shares. It’s a very important record that also includes personal information about the various shareholders within the company.

By digitizing shareholder ledgers into secure cloud-based platforms like MinuteBox, all of that information is stored under the strictest confidentiality. The platform includes built-in biometric and hardware key authorization security measures to protect any information from leaking to the public or from being shared to unauthorized parties. It also organizes and pulls up all corporate records using advanced search filters and parameters, bringing all relevant information to the screen in mere minutes of searches.

Integrated e-signatures double up efficiencies

Routine compliance tasks are some of the most time consuming aspects of corporate recordkeeping. Using platforms like MinuteBox to automate documentation, you can reduce the time it takes to acquire signatures and approvals to a matter of minutes (or even seconds).

Built-in e-signature workflows make the process of securing approvals much faster and easier. The technology also includes date, time, and location stamps that allow you to document all important information related to the approval of minute book records or the sale of new shares to important investors. It’s the ultimate solution to signature and identity verification that accelerates workflows and boosts client satisfaction.

In early March 2023, the US Department of Justice quietly updated its Evaluation of Corporate Compliance Programs (ECCP). The new updates amend previous announcements revealed in the fall of 2022 by Deputy Attorney General Lisa Monaco.

The ECCP guidance outlines how prosecutors evaluate a business entity’s adherence to a corporate compliance program. Corporate counsel representing the interests of large business entities, and their corresponding subsidiaries, can use the ECCP guidance to strengthen the standards of their own corporate compliance policies for their respective organizations.

What are the new ECCP guidelines?

The purpose of the ECCP is to help DOJ prosecutors enforce standardized corporate compliance policies among business entities across the United States. The guidelines help prosecutors determine the effectiveness of an entity’s corporate compliance program, and evaluate how adequately the program is applied.

Strict policies related to compensation and compliance

The most notable updates to the ECCP guidance are in regards to executive compensation and consequence management policies. According to an analysis submitted by Ankura Consulting Group to Lexology, there are four new guidelines related to compensation that prosecutors will consider when evaluating an entity’s corporate compliance policies.

1. How effectively is an entity tracking disciplinary action data for malfeasance?
2. Is compensation ever used as an incentive for adherence to corporate compliance?
3. Are compensation packages recouped as a consequence for compliance violations?
4. Does compliance influence career planning and promotion evaluations?

Corporate communication compliance for all communication channels

The second biggest change to the ECCP guidance relates to how executives and employees of a business entity issue communications. Most businesses have HR policies that offer broad guidance on what is and is not permissible to communicate, which the DOJ reviews if an entity is ever subjected to audits or criminal investigations.

Under the new ECCP guidance, those reviews will now include evaluating corporate policies on communicating via personal messaging applications. The ECCP emphasizes that any and all communications regarding corporate business must be part of a compliance risk management program, including communications issued outside of official company channels.

Entity management software helps enforce compliance

Compensation and communications are two important aspects of a corporate compliance policy. Enforcing the standards of the policy is an important part of the job of any in-house corporate counselor. The question for in-house counsel becomes: what is the best approach to enforce corporate compliance?

Entity management software is one of the best resources for business entities to adhere to their corporate compliance policies. Entity management software is a modernized approach to minute book management, enabling counsel to add new records to corporate documentation in a matter of seconds.

Suppose a round of bonuses is to be issued to various corporate managers and directors. Using entity management software, counsel can provide detailed accounts of the value of the compensation, when it was distributed, how it was distributed, and even into which account it was administered.

All those records are protected in secure cloud storage backed by biometric and hardware key authentication, ensuring all information remains secure and confidential. If federal or state auditors have questions about the compensation packages, your legal team can simply pull up the records in the account and provide a transparent summary of how compensation was issued. This is one of the many perks of secure cloud storage of business entity information.

Expect stricter enforcement of corporate compliance in 2023

The move by the ECCP to provide more guidance around corporate compliance shouldn’t come as a surprise. In recent months, several high profile businesses have been exposed for failing to uphold proper corporate compliance policies that are resulting in significant personal, financial, and criminal penalties.

In November 2022, the collapse of cryptocurrency exchange FTX highlighted the consequences of companies that lack proper organizational structure. Former FTX CEO Sam Bankman-Fried faces multiple charges related to fraud that could result in years of imprisonment for the 31-year-old former executive.

SBF’s misappropriation of customer funds to finance his trading firm, Alameda Research, lies at the heart of charges brought against him. Regulators have identified a lapse in organizational oversight at FTX, including the fact there was no CFO in place to properly manage the flow of cash in and out of the company.
More recently, the collapse and insolvency of Silicon Valley Bank risks exposing another case of financial mismanagement. In the aftermath of federal regulators seizing control of the company, they determined that SVB lacked a Chief Risk Officer to oversee risk management policies. Authorities believe that a Chief Risk Officer would have objected and prevented questionable moves by the CEO and CFO to sell millions of dollars in stock only weeks before the collapse. Those former executives are now being investigated for violating insider trading policies.