Insights and updates
from MinuteBox

The priority of any business is to increase revenue. In order to achieve that objective, it requires a strategic deployment of time, resources, and manpower that can be used to initiate revenue-driven activities that will ultimately help grow the business.

In the legal community, the objective remains the same as any other entity: how do you grow revenue, in this case, Legal Recurring Revenue, to support the interests of the firm? At the same time, diligent recordkeeping of minute book minutes must be preserved with the highest standards of quality assurance.

When the average law firm has only 3 full time employees, it’s even harder to walk that fine line. However, firms can give themselves a competitive advantage over their competitors by investing in sophisticated subsidiary management technology.

What is subsidiary management software?

Subsidiary management software enables legal entities to digitize their minute book record keeping processes. Cloud-based subsidiary software uploads all minute book records into structured, organized digital documents that simplify how legal professionals review and share minute book records with clients.

MinuteBox is one of the leading subsidiary management solutions. It uses biometric & hardware key authentication technology to safely secure all minute book records in the cloud. MinuteBox also integrates with Touch ID, Windows Hello, and FIDO Key support to make it easier for authorized users to access minute book records and corporate documents.

Since it is a cloud-based solution, account holders can access all records with speed, efficiency, and proficiency from anywhere in the world. Records are always at your fingertips, streamlining the entire review process with speedy solutions to uncover crucial information in seconds.

The bottom line is that subsidiary management solutions like MinuteBox make minute book record keeping a lot more fun for legal departments. But they also provide significant business benefits that translate into more opportunities to increase Legal Recurring Revenue for the firm.

More efficient minute book record keeping

To really understand the benefits of subsidiary management solutions, let’s break the benefits down using a few plausible scenarios.

The paper minute book record challenge

In one scenario, a firm has all client minute book records in paper documents. All of those binders are stored within large filing cabinets at the offices of the firm. Labels are attached to the files that, theoretically, makes it easier to find those records in fully stuffed cabinets.

However, let’s say there’s a particular file within that binder that needs to be amended or verified. How much time do legal professionals have to spend combing through the entire binder just to find that one particular page containing the record in question?

This is one of the main reasons why, according to a Legal Trends Report, only 2.5 hours per working day are devoted to billable client hours. Environments that retain outdated manual processes to update minute book records are sacrificing too much of their legal professionals’ time that could otherwise be reinvested into revenue-driven initiatives.

The subsidiary management solution

In the second scenario, a firm has a subsidiary management solution to streamline the entire minute book record keeping process. Instead of binders of files stored in filing cabinets – all of which costs valuable office space – the records are stored digitally in the cloud.

If a client has a question about a particular minute book, the search for that file is significantly more efficient than using the paper record format. With a quick search in the subsidiary management platform, the record can instantly be pulled up for review. All the pages are organized similarly to a PDF document, enabling legal professionals to quickly scroll to the page in question and provide a clear answer to the client’s question.

This entire review process is completed in a matter of minutes. When all minute book reviews are conducted this way, legal talent can spend the majority of their days on billable client activities. They’ll also have the time to actively recruit new potential business for the firm.

Efficient minute book management boosts client satisfaction

Let’s stay with both of those scenarios for another minute. One firm uses the paper minute book review process, and the other firm has a subsidiary management solution in place. In this hypothetical situation, the client asks to clarify information contained in their shareholder ledger. They want to clarify details about a particular share issuance on a specific date.

Both firms rush to uncover the answer to that looming question. One legal team must go through their filing cabinets, uncover the minute book record in question, and then search through the file to find the page that documents the share transaction. The other team does a quick search in their subsidiary management platform and brings up the file in question in a matter of seconds.

Which firm is likely to better satisfy the client? Given that client satisfaction is a critically important factor in boosting client retention, which firm is most likely to retain the client’s business for the foreseeable future?

It’s an obvious answer that emphasizes the main underlying benefit of subsidiary management technology. Companies that can conduct minute book reviews instantly help their employees earn back valuable time that can be used to further the interests of the firm. Additionally, a speedy solution to uncover important information provides clients with instant satisfaction that their concerns are immediately addressed.

This is why all legal entities should embrace the benefits of subsidiary management solutions like MinuteBox and incorporate their time saving attributes into existing minute book record keeping processes.

Any company that intends to incorporate within Canada must abide by the Articles of Incorporation as mandated under Canadian law. Administrative tasks are among the most important steps of the incorporation process, including the rules for corporate governance as well as the parameters to report the transfer and issuance of corporate shares.

When it comes to shareholder rights, there can be no room for error. For the sake of ensuring the business entity is compliant with federal law, it’s crucial that all share transaction records are diligently tracked and reported.

When does a corporation issue new shares?

At the outset of a company’s article of incorporation, shares are issued to the initial round of investors in the business. Their names, home addresses, and positions on the Board of Directors are listed in the official shareholder ledger as the statement of record.

Shares can also be issued at later dates in the lifecycle of the corporation. The company can issue shares from its treasury to new investors who are not current shareholders as well as issue shares to existing shareholders at the discretion of the board. The primary reasons that these shares are issued include any of the following:

• To raise additional capital from new or current shareholders
• To add a new board member whose investment is in the form of knowledge, contacts, or technology to enhance business operations; this is a form of a non-capital investment
• To celebrate higher than expected profits that are shared by all shareholders
• To assist with capital tax or estate planning

A relatively new legal structure is an Employee Ownership Trust (EOT), which allows employees of a corporation to become shareholders without paying directly for the shares. The shares are held in trust, and employees receive payments for their shares as a percentage of corporate profits. The federal government intends to amend legal corporate language with rules and structures for EOTs, which should include details of how to report these types of transactions in shareholder ledgers.

What information belongs in a shareholder ledger?

Whenever shares are issued by the corporation or transferred from shareholder to shareholder, the transaction must be recorded in a detailed shareholder ledger. A shareholder ledger is necessary for corporations to comply with Canadian federal law.

A fully accountable shareholder ledger must contain personal information about the shareholders who invested in the corporation. It must also include the share certificate numbers attached to each issuance or transfer of shares, the total amount of outstanding public shares, as well as the current and projected capital share structures for the corporation.

All of these details must be accurately reported in the shareholder ledger. You can learn more about how to craft the perfect shareholder ledger using our helpful guide to ensure your company is fully compliant with the articles of incorporation.

How to automate share issue and transfer reporting

Maintaining an accurate, up-to-date accounting of all share issues and transfers is vital for corporate compliance. Each time a new share transaction is issued, a record containing the name of the involved shareholders, the date of the transaction, the current value of the shares, and additional details must be inputted into the shareholder ledger.

As you can imagine, this process takes a significant amount of time and resources for corporate counsel to maintain accurate records. The task is all the more time consuming when records are maintained using paper documents, requiring counsel to take time and manually write each and every important note related to the issue or transfer of shares.

How much time do legal professionals spend maintaining these records? Rather than focusing on more revenue-driven actions for the corporation, they spend valuable hours on manual tasks to comply with federal law.

Entity management software streamlines share transaction reporting

Thankfully, this outdated method of corporate recordkeeping no longer has to be the norm for legal professionals. Instead, all records can be maintained electronically using entity management software to maintain a digitized shareholder ledger for corporate compliance.

Unlike traditional methods of reporting share transactions, digital shareholder ledgers can be updated using advanced drag and drop features to input new data. Imagine how much time can be saved by inputting share transaction records into a digitized ledger as opposed to manually writing out all information related to the issue or transfer of shares. That’s valuable working time that can be reallocated towards helping to grow the business in more productive ways.
Reporting on share issues and transfers is a mandatory requirement for corporations to abide by federal laws. But the process can be far more efficient with the right subsidiary or entity management solution, saving valuable time. Having these advanced pieces of software can even help recruit the most talented legal minds to join your company, as they’ll appreciate the advanced technology at their disposal.

Large organizations are demanding more access to cloud-based data storage platforms, according to Netwrix Research Lab. More companies are uploading sensitive data to cloud-based software to reduce costs and improve security, and they’re willing to increase their cybersecurity budgets to support these decisions.

In their 2022 Cloud Data Security Report, Netwrix surveyed 720 professionals all over the world to develop a greater understanding of the global appetite for cloud infrastructure. The results showed that 80% of respondents use cloud-based infrastructure to store sensitive data, and 49% have increased their budgets for cloud security in 2022.

The rise in demand for cloud-based infrastructure

The study was conducted in March 2022 for the first time in nearly two years. Netwrix stated that their purpose was to show the increased adoption of cloud-based platforms since their last report was published in early 2020.

The research was, in part, a response to the COVID-19 pandemic. As companies were forced to adopt remote work, it accelerated the need for cloud-based solutions.

While it may have begun as a practical need in response to a global health crisis, the soaring demand for cloud-based solutions also reflected a growing number of business needs. Companies saw opportunities to lower their costs, and the advanced security features integrated with cloud-based technologies allow companies to fulfill their obligations towards consumer privacy.

According to the findings in the report, the four most cited reasons organizations adopted cloud-based solutions were as follows:

• 61% of business leaders wanted to reduce their operating costs
• 53% said cloud-based solutions increase security around client data
• 45% identified abilities to organize access to secure files for remote workers
• 38% responded that cloud-based software increases their ability to match client needs

Entity management software digitizes and secures client minute book records

One of the best ways for organizations to reduce costs is to modernize their approach to minute book management. To remain compliant with federal, provincial, and state laws, companies are required to maintain accurate corporate records regarding all financial or shareholder transactions. These records allow government regulators and third-party auditors to promote corporate transparency and financial accountability.

Cloud-based entity management software digitizes and innovates upon the traditional corporate documentation process. Records are uploaded into the cloud-based platform, and the files are protected by biometric and hardware key authentication solutions. Access to the platform is restricted to those who have been granted access to the account, ensuring all corporate documents remain securely stored behind advanced firewalls.

A great example of how to implement entity management software is the experience of the company DM Law Clerk Solutions. Their organization uses entity management software to run virtual meetings with clients when reviewing and approving corporate documentation.

This feature allows DM Law Clerk Solutions to provide more flexible service to their own clients. Up to 77% of business owners want the ability to review corporate documents from remote locations as part of a more modern and efficient way to streamline approvals. By utilizing entity management software, DM Law Clerk Solutions is able to match that client expectation and conduct document reviews securely and virtually via the cloud.

Cloud-based entity management is more time efficient

Among the biggest costs facing legal professionals is the time lost to corporate recordkeeping. Studies have shown that, using traditional record keeping processes, it takes up to five minutes to scan, tag, and file a single page in a corporate document. Each corporate file is, at minimum, multiple pages long. Multiply the amount of time spent filing a single page by the number of records your organization maintains. It adds up to a lot of lost time.

DM Law Clerk Solutions improved their ability to service clients at faster rates by implementing these solutions. By uploading minute book records into the platform, their team could use the platform’s intuitive drag and drop features to manoeuver and organize the records in seconds. They successfully earned back hours of valuable working time that were effectively redistributed towards growing the interests of their business.

Cloud-based entity management is more cost-effective

Another major business benefit of cloud-based entity management technology is the direct cost savings for your organization. As you save time managing your corporate documents, the time savings translate into financial savings for the business.

For example, in the legal community, firms hire clerks and paralegals to assist with the corporate record keeping process. The average annual salary for a clerk or paralegal is approximately $54,000 USD ($72,000 CDN). However, up to $20,000 USD ($26,000 CDN) of a clerk’s or paralegal’s salary, or approximately 37%, is spent primarily on managing physical binders of corporate documents.

DM Law Clerk Solutions sought to lower their own operating costs using the software. All of the time they earned back by digitizing their minute book records meant they could devote more working hours toward billable hours with their clients. Additional time devoted to servicing clients through billable hours provides an organic boost to Legal Recurring Revenue that supports the future prospects for DM Law Clerk Solutions.

A career as a legal professional is one of the most sought after and hardest earned professions. As practicing attorneys, trained clerks/paralegals, or in-house corporate counsel representatives, the responsibilities assigned to legal experts are critical to the success of any business entity.

While their roles are of utmost importance, legal professionals also face some of the most recurring challenges in any professional setting. Between pressing deadlines, client expectations, precedent-setting mandates, and other taxing challenges, legal experts always have their work cut out for them.

The stress of managing client expectations

Deadlines, billing pressures, client demands, long hours, changing laws, and other pressures individually cause legal experts to feel stressed out. Collectively, they’re responsible for making the practice of law one of the most stressful professions for all practitioners.

For example, in the UK, a study of over 100 practicing attorneys found that 92 percent of lawyers experienced stress or burnout from their job. Most respondents also admitted to spending up to 10 additional hours of overtime per week, significantly detracting from a healthy work-life balance.

One interesting finding from the study was related to technology. According to the numbers, most lawyers believe entity management technology that automates administrative and clerical work is the most impactful way modern solutions can help reduce stress.

Clients want more value for billable hour rates

When the global economy is firing on all cylinders, companies are willing to spend more on professional legal services. When the economy contracts and approaches recession-level anemic growth, entities are less willing to pay high legal hourly rates.

In 2021, the average billable amount charged by lawyers was $300 per hour. Over the next two years, supply chain management issues and the ongoing political issues triggered economic calamity across the entire globe. Today, economists forecast a very difficult 2023, raising the question of just how many companies are willing to pay high hourly rates.

One option to help legal experts prove their value is through entity management technology. Using these intuitive platforms, the administrative and clerical work can be uploaded into the cloud, where it’s filed, sorted, tagged, and organized in a matter of minutes. With these solutions in place, legal counsel can spend more time consulting with clients and provide demonstrable proof that billed time is for consultation rather than documentation.

Benefits of entity management technology

Entity management technology takes the menial work out of the legal profession and helps experts rediscover the fun in providing their services. Its most valuable benefit is that legal counsel can digitize corporate documents and minute book records.

By uploading all client documentation into the cloud, counsel and their respective clients can view the corporate documents at their own convenience. Instead of arranging time for face-to-face meetings, an entire review can be done electronically, providing a growing number of business leaders the freedom to conduct their legal business from remote locations.

On top of the convenience and flexibility afforded by these platforms, entity management software also provides the following underlying benefits:

• Industry-leading security backed by biometric and hardware key authentication
• Options to quickly generate reports for client reviews and signatory approvals
• Advanced search parameters that make it easy to find and source minute books
• Built-in calendars to track important filing deadlines, transaction dates, shareholder meetings, etc.
• Unlimited seats for the entire legal counsel and chief entity decision makers

Use entity management software to simplify legal workload

Technology helps simplify personal and professional lives. Entity management technology saves legal counsel valuable hours of time, which can minimize the need for overtime.
Since the platforms are intuitive and designed to automate most clerical work, legal experts can allocate their own time towards profitable tasks throughout their days. As more clients demand value from billable hours, your legal team can focus on growing Legal Recurring Revenue with dedicated time and energy towards solving legal challenges that affect clients’ own businesses.

The Canada Business Corporations Act (CBCA) was first introduced in 1975 to replace the previous legislation entitled the Canada Corporations Act. The primary purpose of the CBCA was to:

• Revise and reform the law applicable to business corporations incorporated to carry on business throughout Canada
• Provide uniformity to business law across Canada
• Allow federal corporations incorporated under the CCA to continue under the CBCA

Some of the ways the CBCA reformed how business is conducted in Canada had to do with the transfer and issuance of shares, as well as updated shareholder rights. The new laws are important for businesses to understand should they plan to incorporate in the near future.

How the CBCA specifies the transfer and issuance of shares

Under the CBCA mandate, all corporations that issue shares to shareholders must maintain a securities register to remain in compliance with federal law. A securities register, also known as a shareholder register, lists all the issuances of a corporation’s shares to its registered shareholders. The register contains personal information about the shareholders; additionally, it lists the number of shares held by each shareholder, and the date that shares were issued or transferred to the various shareholders.

The corporation is the issuer of shares. In most jurisdictions across Canada, the issuance of shares verifies shareholder rights and interest in the corporation’s rights or property. Corporations headquartered in Quebec follow a similar mandate by issuing shares that confer rights to the corporation’s property.

Shareholder rights under CBCA provisions

The CBCA also outlines specific shareholder rights that must be upheld by all corporations within Canada. One of the most important provisions within the CBCA is the protection of minority shareholders’ rights. Regardless of whether shareholders hold majority or minority ownership of the corporation, the CBCA states that all shareholder rights must be protected and respected. There are significant and far-reaching financial penalties if those rights are violated.

Additionally, the CBCA states that:

• There is no mandatory requirement for a fixed number of shares
• The idea of “par value” shares is an abolished concept and a prohibited practice
• Recognition that shares can be classified under different share classes
• At least one share class in every corporation must always have unrestricted voting rights
• Shares may not be issued on partly-paid or a subscription basis

There are also laws for “bearers of shares.” Under the CCA, bearers of shares did not have the same rights as registered shareholders. The CBCA states that bearers of shares do have the same rights; however, the “bearer share” is not recognized by name. The bearer share will appear in the shareholder register simply as “bearer.”

Corporations also have authorization to issue fractional shares, and they have the right to issue maximum flexibility, particularly in the case of amalgamations, share exchanges and share splits. Board directors are entitled to fix record dates to determine the shareholders’ rights to receive dividends, receive notices of meetings, or participate in liquidation distributions.

How to protect shareholder rights with entity management technology

The CBCA demands that all corporations maintain up to date shareholder registers to comply with federal laws. Traditionally, corporations have kept records of all shareholders, issued shares, and share classes in a physically binded ledger.

However, think about how this approach looks for a company in the 2020s. Rather than an innovative and accessible solution to document shareholder information, a physical ledger is a handwritten document. It requires tedious amounts of time and energy spent to update new shareholder records, or to record transfers of shares from one shareholder to another.

Innovative corporations use entity management software, like MinuteBox, to create, amend, and verify information in a digital shareholder ledger. Instead of writing notes into a binder, corporate counsel can use entity management platforms to drag and drop new data into the ledger in just a matter of seconds. This is a far more time efficient way to keep track of all important shareholder information.

The best part about this approach is that platforms like MinuteBox are cloud-based solutions. This means that all shareholders can access the ledger from the convenience of their own homes or wherever they may be in the world that can connect to the internet. The system is protected with biometric and hardware key authentication parameters. This ensures only those with shareholder rights have access to the ledger, which is very important to protect shareholder privacy from the prying eyes of the public.

Talent management is arguably the most critical challenge for law firms today. That’s according to the results of a Thomson Reuters Institute report, which identified talent acquisition and retention as the top concerns facing the legal community.

The findings of the report suggest that the COVID-19 pandemic impacted how firms both attract and retain talent. Legal professionals are demanding more flexible working arrangements from their employers to retain their positions. Many of the top paid legal minds increasingly prefer firms that utilize innovative technologies to improve daily work habits.

Salaries aren’t the only talent acquisition tactic for firms

The Thomson Reuters report cites ever-increasing salaries as a prime reason talent acquisition and retention are so competitive in the legal community. Financial pressure placed on firms to retain top legal minds is being felt in all corners of the globe. However, financial compensation isn’t the only incentive for legal talent to accept employment by their chosen firms.

Modern technology has broken down geographic barriers that previously restricted legal professionals from accepting employment outside of their home communities. Technology enables firms to connect with the top legal experts, regardless of location. Practicing legal professionals appreciate the flexibility afforded by firms that utilize this technology.

Attorney burnout impacts talent retention rates

Attracting great talent is half the battle, but retaining your top performers is the other challenge. The Thomson Reuters report cites attorney burnout as one of the driving reasons why firms have higher attrition rates, and the authors of the report recommend implementing solutions that address ongoing issues for legal professionals.

According to the American Bar Association, nearly 60% of all practicing attorneys work over 40 hours per week, and over one in five work more than 50 hours per week. Additionally, 87% of surveyed professionals said their law offices allowed remote or hybrid work. The majority of respondents said remote work did not impact their productivity or the number of billable hours they could charge to clients.

What’s the takeaway here? The data from the ABA study demonstrates that legal professionals are willing and able to put in the hours. The insights from the Thomson Reuters report suggest there are better ways for legal minds to utilize their talents more effectively. Firms would be wise to implement solutions that improve productivity to avoid the risk of burnout and attrition.

Entity management software helps increase time for billable hours

One way to reduce attorney burnout is to provide the resources that allow legal talent to devote more time towards servicing their clients. By providing the means to reduce time and labour attorneys must devote to minute book management, they receive more time and resources to increase billable hours. This is a great tactic to improve talent retention and help your firm work towards the larger objective of increasing Legal Recurring Revenue.

Entity management software is the best resource to modernize minute book management with more efficient workflows. Instead of sorting through binders upon binders of client minute books, professionals can upload all client records into cloud-based platforms.

Once the records are in the platform, they’re automatically organized into documents that resemble standard PDF files. This makes reviews and approvals of minute book records far more streamlined and efficient. If clients have questions about a particular document in their records, you can use entity management software’s advanced search capabilities to find the document in question in a matter of seconds.

Using modern entity management solutions, review processes that once took hours or days of clerical work are completed almost instantaneously. Legal professionals can use these solutions to improve their own productivity, reduce manual clerical work, and dedicate more time towards improving client relationships.

Showcase your modern workforce and attract the best talent

When you adapt your minute book management process to more modern workflows, your firm demonstrates a commitment to innovation. Positioning your firm as an innovative leader is very attractive to legal professionals, and an innovative approach to minute book management can improve your firm’s talent acquisition strategy.

Cloud-based entity management software allows legal talent to work with flexible solutions that improve their productivity. Fewer working hours are necessary for minute book management, which allows lawyers to feel more fulfilled and satisfied with how they spend their days.

The platforms are also beneficial to clients, allowing your legal team to respond to client inquiries with speed and proficiency. When clients feel that their attorneys have their best interests at heart, they’re far more likely to retain your firm for future services. Ultimately, modern approaches to minute book management help attract and retain your most talented legal minds, and they’ll support your efforts to boost Legal Recurring Revenue for the firm.