Entity management software plays an important role in corporate governance and corporate entity compliance. Yet, many in-house legal departments are not taking advantage of the corporate legal compliance programs that are currently available. This suggests that many companies are still managing their regulatory entity compliance and corporate governance tasks manually – rather than using automation and technology.
A survey published by Ernst & Young, found that 89% of companies report facing challenges in managing their legal entities. The survey also found that 88% of legal teams are under pressure to reduce cost.
With the lack of adoption to new technology, it is not surprising to hear that legal teams are unhappy with their current entity management software. In fact, two-thirds of the companies surveyed said they used multiple providers. Legal departments are cautious to use one provider because most of the technology available does not meet their business goals.
Why aren’t companies switching to an entity management system that meets all their corporate compliance and business goals?
Legal departments are hesitant to change their entity management provider due to concerns over data quality and lack of employee adoption of the technology. To help ease concerns, follow these three best practices when implementing new entity management technology.
First, identify roles and responsibilities and involve the actual end-users. Make sure you have resources in place to support this growing priority and review workflows to assess where investment would most benefit the legal department. Companies that involve users when picking their new entity management technology are more satisfied with their results.
Tools like employee surveys, focus groups, and brainstorming sessions will help isolate problems and risks. Employee buy-in will also start the process of adapting to new entity management and corporate compliance technology.
Second, consider a test or free trial of the new technology. Once the company has selected a new entity management provider, a test trial is essential. A free trial can help the in-house legal department understand the features and benefits of the software in a real-life setting. A trial run could be based on a certain cause or project, or it could last for a month or two.
When your test is over, the legal team can decide whether the new entity management software will help the business achieve its goals and what changes would need to be made, if any.
Third, consider working with your new entity management provider to help streamline your regulatory compliance tasks and processes. Regulations change frequently, and you need to be aware of all the regulations impacting your business. Using new entity management software often requires legal teams to create standard processes for handling compliance tasks – this takes time.
Prior to implementing a new corporate compliance program into your business, make sure you have completed the following:
1) Provide your new corporate compliance provider a list of entities, signature authorization form, and the signed contract to your Account Executive.
2) Ask your Entity Management provider to perform a detailed Secretary of State audit on your entities in each of the applicable states to ensure they are all up to date and in good standing.
Creating processes for things like SOP routing, user access permissions, and corporate filings would help the team become more efficient over time. Make sure you are providing that context, along with the resources your teams need to achieve compliance. Work with your new entity management technology partner to integrate those processes into your platform.
Reduce stress, increase productivity, and remain in good standing with a robust entity management system that is the trusted foundation for your compliance needs. For more information on how to modernize your in-house legal department, contact us today at 866-757-5850 or schedule a demo.