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from MinuteBox

Corporations hire experienced legal professionals to oversee legal entity management on behalf of the business. These hires can be either in-house, under the direction of general counsel, or as contracted members of an outside law firm.

In either scenario, legal professionals rely on their team of law clerks or paralegals to help administer entity management best practices. This includes assembling all corporate filings into one centralized database of records to maintain business compliance with regulatory laws.

How corporate entities maintain business compliance

Legal teams follow entity management practices, policies, and procedures to maintain business compliance with regulatory authorities. Entity management is a governance system that organizes the corporate records of a legal entity to improve business compliance and corporate transparency.

Effective entity management organizes records from an array of sources into structured minute book records. Examples of prominent sources to collect entity management data include:

• Organizational charts
• Organizational calendars
• Corporate workflows
• Statutory non-compliance records
• Date-based compliance records
• Clerical and administrative records

Many legal professionals use entity management software to assist with the management of corporate data in support of business compliance. Entity management software is a specialized system built by legal minds for legal minds. It simplifies how law firms and legal departments manage large amounts of corporate data in service of numerous legal entities.

Four tips to help paralegals maintain business compliance

Simplification goes a long way to helping paralegals and law clerks remain on top of the entire business compliance process. Each record of data must be inputted into the master entity management database, which requires diligent recordkeeping skills and vast amounts of time dedicated to this process.

So, how can you make life a little easier for your paralegal team, while still ensuring that business compliance is maintained? Entity management software is one of the best resources to simplify the workload. Here are four helpful ways these platforms will help your paralegal team maintain business compliance, and also preserve their own mental health.

1. No-code document assembly

One of the biggest reasons companies choose not to insert modern technology into their workflows is that platforms require technical expertise to manage. Many legal departments don’t have the staffing or resources to invest in a tech guru. In fact, according to the Association of Corporate Counsel, the median total of legal staff in any given department is just six people.

The chief benefit of entity management software is that it’s built to support the non-technically savvy legal department. The platform includes no-code document generation templates, allowing teams to leverage intuitive software that easily creates and customizes legal documents with no technical requirements. This approach significantly reduces the time it takes to create documents to a few simple minutes.

1. Time to consult with stakeholders

Paralegals and law clerks often wear multiple hats. In addition to managing corporate entity data, their responsibilities include serving as the primary point of contact between the heads of the legal department and the other key stakeholders of the business.

Scheduling time to converse with those stakeholders with fully briefed and informed documentation is a challenge for paralegals. Since the average team has only six functioning staff members, juggling all these responsibilities without sacrificing the requirements for effective business compliance is a tall order.

The simplicity of entity management software streamlines the entire business compliance workflow. Using these systems, legal teams save valuable hours on recordkeeping, enabling more prompt and effective meetings with key entity stakeholders. It’s a workflow that generates value and improves the efficiency of meetings throughout the entire organization.

1. Greater alignment between attorneys and paralegals

Any documentation submitted to regulators will undergo meticulous scrutiny. Business entities provide transparent records to regulators, who then review and make their judgment on whether the entities meet the standards for business compliance.

Sometimes, supportive positioning statements that provide additional context to the records make or break the case for regulators. If there’s misalignment between the legal professionals and paralegals who submit the records to regulators, the argument may become diluted or confusing.

By using a platform that centralizes all records and streamlines the time investment necessary to maintain those records, attorneys and clerks can dedicate more time to making their arguments in clear, concise, and aligned manners. It will also allow any misalignments or disagreements over submissions to be squashed without leaving paralegals feeling threatened or at risk of dismissal.

1. Paralegals will not succumb to burnout

The most consistent benefit of entity management systems is the time saving efficiencies they provide to resource-strapped legal teams. Valuable working time is granted back to legal departments, chiefly, the paralegals, whose primary duties are to maintain those records.
Paralegals are under enormous pressure to maintain business compliance. It’s natural to feel overwhelmed at times, especially if workloads become overwhelming due to rigid time constraints. Using entity management software, the work gets done faster, paralegals feel accomplished, and creeping thoughts of burnout dissipate into the subconscious. It’s a win all around for everyone!

In the legal industry, innovation and technology are playing a bigger role than ever before. From document automation to virtual closing lists, technology is changing the way firms work and operate. In this interview, Karen Tuschak and Karen Anderson, both experts in the field, share their insights on the practice areas where innovation is having the greatest impact within firms right now.

• Corporate practice areas are leading the way in innovation and technology adoption
• Cloud-based technology is replacing traditional software licenses
• Transactional practice areas such as banking and finance, real estate, and litigation are also adopting technology for document automation and e-discovery
• Corporate databases can be utilized by other practice areas for increased efficiency

Karen Anderson, who specializes in corporate practice areas, says that innovation is changing everything in her field. “Clients can access their records, it’s about having cloud-based technology rather than licenses for this and that. I think we will continue to see this level of change for a few years. Everybody is in the midst of change right now in corporate groups.”

Karen Tuschak adds that any transactional practice is also starting to adopt technology for document automation and virtual closing lists. “Banking and finance are adopting document automation and virtual closing lists and checklists. It’s unbelievable when they start to wrap their minds around things that we used to do in corporations with automation. Its particularly effective where they have similar large clients, and using templates. Especially in real estate with things like condo closings, real estate transactions, anything that can be automated is changing the game.”

Watch the full interview, Innovations in Transactional Practice Areas: How Technology is Changing the Game

The use of technology in transactional practice areas such as banking and finance and real estate is allowing for increased efficiency and cost savings for clients. Karen T. also notes that litigation has been utilizing e-discovery for some time, but other transactional practice areas are also starting to adopt these tools.

Furthermore, Karen T. highlights the value of using corporate databases in other practice areas. “Banking and finance is doing things for the firm’s corporate clients. The information is already there. So just finding new ways to incorporate their documents.”

In summary, the practice areas that are seeing the most innovation right now are corporate and transactional practices such as banking and finance, real estate, and litigation. Corporate is undergoing major changes with the implementation of cloud-based technology and client access to records, while transactional practices are using document automation and virtual closing lists to streamline their processes.

Overall, it is clear that technology is playing a major role in shaping the future of these practice areas and firms that are able to embrace and leverage these new tools and processes will be well-positioned for success.

The Canadian government tabled a motion in the House of Commons on April 18, 2023, to begin deliberations on Bill C-42. The proposed legislation seeks to amend the Canada Businesses Corporations Act (CBCA) and other Acts that would improve transparency regarding individuals with significant control (ISCs) of Canadian entities governed by the CBCA.

Bill C-42 has undergone two votes in the House of Commons and will be presented to a committee for further consideration. Among the data that will be submitted to the committee is a Charter Statement issued by the Minister of Justice. The Charter Statement identifies rights and freedoms under the Canadian Charter of Rights that will be engaged by Bill C-42, and it also provides a detailed explanation of why those rights and freedoms will be engaged.

What does Bill C-42 propose?

Bill C-42 authorizes that regulators have authority to acquire certain taxpayer information and present that data to the Department of Industry. The data acquisition is intended solely to verify and validate that certain private corporations, governed by the CBCA, are living up to their responsibilities of corporate beneficial ownership registrations.

The specific contents of the legislation state that taxpayer information refers to shareholdings of individuals with significant control (ISCs) in a private corporate entity. ISCs are identified using corporate ownership structures that are reported to the Canada Revenue Agency.

How does Bill C-42 change shareholder reporting?

As proposed by Bill C-42, certain information in an ISC shareholder registry would be made public to promote greater corporate transparency and accountability. Specifically, Bill C-42 proposes changes, not limited to but including the following:

• The names, addresses for service or residential addresses, and share ownerships of ISCs be made publicly available
• Increasing information reported within an ISC Register, including an individual’s residential address, address for service and citizenship;
• Requirements that corporations submit ISC registers to Corporations Canada on an annual basis, when changes in control occur, and as stated by the laws

Additionally, Bill C-42 proposes modifying the penalties for non-compliance with the laws. If passed as tabled, Bill C-42 would enforce fines up to $200,000 and/or 6 months of criminal imprisonment for ISCs who fail to remain in compliance.

Who qualifies as an ISC?

An ISC is a shareholder with a significant controlling interest in a corporate entity. In most situations, an ISC is a shareholder with at least 25% of the voting rights for all issued corporate shares. In other cases, an ISC is anyone whose influence could exert a controlling influence over executive decisions issued by the corporation.

Canadian regulators have enacted multiple pieces of legislation at the federal and provincial levels in recent months to enforce greater ISC transparency and accountability. The purpose of each piece of legislation is to be part of a nationwide effort to crack down on white collar crimes, specifically fraud and malfeasance, that prove costly to innocent Canadian citizens.

In Ontario, for example, amendments to the Ontario Business Corporations Act (OBCA) were passed that require corporations to create ISC registers that are submitted to provincial regulators on an annual basis. In Quebec, provincial Bill 78 proposes similar legislation for ISC reporting. However, under Quebec law, ISCs are also classified as any shareholders who can elect, appoint, or remove corporate directors and executives from their positions.

Use entity management software to create ISC registers

Platforms like entity management software are one of the best resources for maintaining accurate ISC registers. These solutions have built-in shareholder register templates that simplify how your legal and compliance officers build ISC registers. The templates feature modules that help your team include any required shareholder information for individuals who fit the ISC profile.

Once you’re on the platform, access the Capital Section feature to input all authorized information about shareholders and corporate transactions in the open fields. This is where you can document names, addresses (residential and commercial), dates of birth, and jurisdictions where your ISCs operate.
All these features will help your corporate entity remain in compliance with the laws, including the new proposals in Bill C-42, should it pass final reading at the House of Commons. You can also use entity management software like MinuteBox to build a detailed compliance program, creating more organizational structure and accountability to protect your corporate entity from the significant risks and penalties of non-compliance.

Adopting new technology in a legal department can be challenging, particularly when there is resistance to change. In this blog post, we will explore strategies for overcoming resistance to change and ensuring successful adoption of new technology. Key points include connecting with successful peers, providing positive feedback and resources, and promoting a culture of learning and discovery. Here’s what we’ll cover in this post:

• Connecting with successful peers can help others understand the benefits of change
• Providing positive feedback and resources can encourage adoption
• Promoting a culture of learning and discovery can help people understand the need for change

Change is hard and people may challenge it. Adopting new technology in a legal department can be particularly challenging when there is resistance to change. However, with the right strategies in place, it’s possible to overcome resistance and ensure successful adoption of new technology.

One strategy for overcoming resistance to change is connecting people with successful peers. As Karen Anderson, Corporate Services Manager at Blakes Cassels & Graydon LLP, explains, “rather than me just saying, oh, no you just have to do this because this is what we’re doing. I would prefer to connect them with the folks that have been more successful, and so they can work together and say, talk to this person because they’re having the same issue, or they had the same issue.” By connecting people with others who have been successful with the change, they can learn from each other and understand the benefits of the new technology.

Watch the full interview, Overcoming Resistance to Change in Legal Departments

Another strategy is providing positive feedback and resources. Karen highlights that, “we’ve also just started sending emails amongst the groups with little tips, Hey, did you know you could do this? And sometimes people will know you can do that, but just a little off. Other times people will say hey, I never knew I could do this in this product in MinuteBox. Just sharing it and then people can keep all these emails for quick reference and it’s really helpful and encouraging.”

Promoting a culture of learning and discovery can also help overcome resistance to change. As Karen states, “I think having peer support is really helpful rather. People don’t just wanna be told we’re changing and this is what you’re doing.” By promoting a culture of learning and discovery, people can understand the need for change and make the transition smoother.

In conclusion, change is hard and resistance to change is a common challenge when adopting new technology in a legal department. However, by connecting with successful peers, providing positive feedback and resources, and promoting a culture of learning and discovery, it’s possible to overcome resistance and ensure successful adoption of new technology.

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.

The legal industry is constantly evolving, and the use of technology by paraprofessionals is no exception. The pandemic has brought about new challenges and changes in the way law firms operate, including an increased reliance on remote work and virtual connections. In this interview, Tiffany Pereira, an expert in legal technology, shares her insights on how technology is being used by paraprofessionals and how it is evolving in response to these changes. From the rise of the self-service delivery model to the importance of ease of delivery in technology products, this post explores the ways in which technology is being utilized by paraprofessionals to better serve their clients and improve their workflow.

What we’ll cover in this blog post:

1. The rise of the self-service delivery model
2. The values of ease of delivery in the product
3. The use of recordings and a knowledge base
4. The shift towards a self-service delivery model

The use of technology by paraprofessionals is evolving in response to the changes brought about by the pandemic. As Tiffany Pereira notes, “with some of the lockdowns it forced some law firms, of course, to temporarily close their offices and really rely on those virtual connections, whether through Zoom or through phone. And clients turn to their devices instead of stopping by the firm’s office to read or sign documents or have those connections.”

This shift to remote work has led to an increase in the use of the self-service delivery model. As Pereira explains, “What can we look at if we have a question? What are our options? Are there resources? Is there a knowledge base? Are there webinars like this? Are there articles that we can utilize? How can we learn without sitting in a boardroom together?”

Watch the full interview, Evolving Technology for Paraprofessionals

Additionally, ease of delivery in the product has become more important. Pereira states, “So what we also saw was a lot of cancellations for training sessions, and that wasa bit of a shift from what we were used to. But then relying on recordings, relying on how I can get the most information and having basically a knowledge base or one-stop shop to everything I need to know about this product.”

To adapt to these changes, firms are utilizing recordings and knowledge bases to provide training and resources for paraprofessionals. This allows them to learn and access information at their own pace and convenience, rather than relying on traditional in-person training sessions.

Overall, the pandemic has accelerated the shift towards a self-service delivery model for technology used by paraprofessionals. This allows them to access the resources they need to effectively use the technology and provide service to clients in a more flexible and efficient manner.